HomeMy WebLinkAboutAgenda - 03-19-1996 - X-D e
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ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item No. �
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 19, 1996
SUBJECT: Child Care Subsidy in Orange County
DEPARTMENT: Social Services PUBLIC HEARINGXES NO x
ATTACHMENTS INFORMATION CONTACT
1. Status Report: Child Care Subsidy in Orange Marti Pryor-Cook,Ext 2802
County TELEPHONE NUMBERS
Hillsborough 732-8181
Chapel Hill 967-9251
Mebane 227-2031
Durham 688-7331
PURPOSE: To inform the Commissioners about the current status of the various child care
subsidy resources available to low-income families, and the unmet need for this program.
BACKGROUND: Child care is the essential ingredient for families to be able to work, pursue
an education, or get job training. Without affordable child care, many families find it necessary to
quit their jobs and turn to public assistance. Other parents continue to work, but may leave their
children alone or in unsafe conditions. Quality child care ensures that young children get the
developmental support they need to thrive and grow. Studies have shown that high quality child
care leads to improved intellectual, social, and emotional development.
In Orange County, two agencies - the Department of Social Services and Day Care Services
Association - administer the various child care subsidies and scholarships that are available for
low-income families. The majority of child care subsidy resources are directed toward assisting
working poor families.
Despite recent investments by Smart Start, the total pool of available child care subsidies is
inadequate to meet the needs of families. A waiting list of more than 300 eligible children exists
now. The need for this program is expected to grow as federal and state resources shrink, and
welfare reform requires more families to work.
RECOMMENDATION: The Manager recommends that the Board receives the report as
information.
2 L
IP FOR YOUNG CHILDREN -- , 1 _
ORpNGE
COUSTV Pp'RTNERSH -
President:Anita Daniels
Vice President:Rev.J.Brovold
Treasurer:Marti Pryor-Cook
Secretary:Sue Russell
Past Resident:John A.Walker
President-Elect:Dick Edwards
CHILD CARE SUBSIDIES: Anita Daniels
United Way ofOrange Co.
Jacqueline Brovold
Church of Reconciliation
Marti Pryor-Cook
Orange Co.Dept Social Serv.
Sue Russell
Day Care Services Assoc
John A.Walker
MAKING A DIFFERENCE FOR ackEdwa Management,Iris
UNCSchool ofSocial Work
CHILDREN AND FAMILIES
Sherry Bell
Brenda Breeze
Par
IN ORANGE COUNTY ma`
Jay Bryan
Carrboro Board ofAldermen
Bill Crowther
Orange Co.Commissioner
Ruth Edwards
Edwards Day Care
Pam Evans
Orange-Person-Chatham
Mental Health Authority
Sharon Freeland
Orange Congregations
in Mission
Ann Hart
Prepared for: Chapel Hill-Carrboro Schools
Beckie Hermann
The Orange County Board of Commissioners Orange County Preschool
Interagency Council
Kathy Hicks
Orange County Schools
Jacob Lohr
UNCCommunity Pediatrics
March 12, 19% Mike lHill rs
� Chapel Hill Training Outreach
Amy Rabb
Child Care Networks
Dan Reimer
Orange County Health Dept
Kate Sanford
Chapel Hill Cooperative Preschool
Michele Rivest
Executive Director
CARRMILL
SUITE C-8
CARR80RO,NC 27510
PHONE:919 967-9091
FAX:919 933-1008
3
CHILD CARE SUBSIDIES:
MAKING A DIFFERENCE FOR FAMILIES IN ORANGE COUNTY
Why is child care important for children and families?
Child care is the essential ingredient for families to be able to work, pursue an education, or get job
training. Without affordable child care, many low-income families find it necessary to quit their jobs and
turn to public assistance. Other parents continue to work, but may leave their children alone or in
unsafe conditions. Quality child care ensures that young children get the developmental support they
need to thrive and grow. Studies have shown that high quality child care leads to improved intellectual,
social, and emotional development. Unfortunately, the reverse is also true: poor child care, especially
in the first few years of a child's life,can impair a child's development.
What does child care cost in Orange County?
Child care is one of the largest items on the family budget,following housing, food, and taxes. In
Orange County, the average cost for child care is nearly$500 per month per child. A typical family
pays nearly$6,000 a year for child care--three times more than one year's tuition at UNC. Without
child care assistance,a family making$15,000 a year will pay 40% of their gross earnings for child care.
Why is the cost of child care so high?
Because Orange County has a very high proportion of quality child care programs, it has the highest
child care costs in the state. Quality child care is expensive to provide: quality means there are a small
number of children for each teacher, and that the environment is stimulating and child-oriented. Child
care costs are also high because child care is a labor intensive industry, and all labor costs more in
Orange County. Finally,child care is expensive because families in Orange County are well-educated
and well off, and want high quality care programs. Orange County Families have the third highest
median family income in the state,and thus the means to pay for the costs of quality care, which drives
up the market costs of care for all families.
What are child care subsidies? Who pays?
The responsibility for paying for child care generally Child Can Subsidy Purchasing Partners
falls on parents. Child care subsidies or scholarships i3.5 million annually
are financial assistance programs that help families
afford the cost of child care. Low-income parents
who qualify for help may also pay a portion of the
total child care costs based on a sliding fee scale.
These programs are typically funded with federal and
state dollars, although Orange County is fortunate in
having other contributors. In Orange County, UWW
$3,470,650 is available annually to subsidized children E] UAW WW,GRA-
through the various purchasing partners, as indicated
■
in the table on the right. These combined resources ■ Mcm
serve both preschool and school-age children, and ® GM
include parent fees and provider in-kind contributions.
Eighty-five percent is direct subsidies.
Who is eligible?
Family eligibility for child care subsidies is set by the various partners who fund these programs. In
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general, subsidy assistance is limited to those families who are working, in education or job training
programs, or for the child's benefit. There is usually a maximum family income guideline that limits these
funds to low-income families.
In Orange County, 86% of the families receiving child care subsidies are working; 84% are single-
parent, and have a median income of$14,872 annually, with an average of three persons per family.
The average family receives about$300 per month, or$3600 per year in child care subsidy support.
In Orange County, two agencies - the Department of Social Services (DSS) and Day Care Services
(DCSA) Association - administer the child care subsidies and scholarships that are available for
families. The major difference between the two subsidy programs operated is the family income criteria.
DSS is restricted to the poorest families in the community, whereas DCSA is able to serve the working
poor, up to a maximum family income of$27,455 for a family of three.
DSS administers the child care subsidies for all families participating in the Aid to Families with
Dependent Children (AFDC) program, the JOBS/Work First Program, child welfare related child care,
and children with special needs who may also need transportation. DCSA administers three child care
subsidy programs, one using UNC funds, one using Smart Start funds, and one that combines a variety
of community funds including United Way.
What is the need for this program
It is difficult to estimate the total need for child care subsidies because of eligibility changes occurring at
the federal and state levels. For example,the Work First Program that Governor Hunt has implemented
in North Carolina now emphasizes the importance of work for parents of school-age children, as
opposed to the JOBS program which encourages education, training, and work for parents of preschool
and school-age children. It is also expected that federal reductions in Human Services proposed by
Congress will have adverse affects on the existing programs,reducing resources and driving up the need
for child care assistance for low-income families.
However,we can make some general assumptions using population and income census data of families
with children under age six residing in Orange County. Over 1600 preschool children with either both
or their sole parents working need some level of child
care subsidy, even when federal and state child and
dependent care tax credits are taken into consideration. Preschool Children
Currently about 480 preschool-age children receive child Needing Subsidy
care subsidies. This means that approximately two-
thirds of the eligible children or approximately 1000
preschool children are in need of services but are not
currently served by any available resource. +�
(See chart on the right)
in subsidies
direct
1 cost over
$5 million annually
to s erve a
o f these preschool-age
children at current
rates. Currently, DCSA and DSS are spending about
ct.r.a.ws ww.s.w..
$168,270 to serve about 480 preschool children per
month, or more than $2 million annually. Another 644
children are served monthly, which costs about$2.3 million annually. Orange County is about$3
million short in funding the current need for child care subsidies for preschool-age children alone.
5
Why is there a waiting list for services?
Simply,a waiting list for child care subsidies exists because family need for this program far outstrips
the available supply of resources. This program has never been fully funded, although at times it
appears that the community has met the need because the waiting list has disappeared. The waiting list
is not static,but changes in response to new eligibility criteria or economic conditions. Despite new
investment in the last two years by Smart Start, the need continues to grow and change.
Profile of families on the waiting list
As of March 8, 1996, there are 273 eligible children waiting for child care subsidy assistance who
remain unserved by any resource.
Child's age: 101 (37%)children are age two or younger; 103 children (38%) are preschoolers
between the ages of three and five; and 66 children (24%) are school-age.
Residence: The majority of families live in Chapel Hill or Carrboro (60%); 38% live in
Hillsborough or other parts of Orange County.
Family Income: Nearly two-thirds (65%) are families with an annual income below $15,000 per
year. Another 14% are current AFDC recipients. The majority of these families
are single parents (74%)
The following table profiles the reasons why these families need child care assistance:
: :: ±€ c €:
::.:::.::..:::::.:::::.::::::::::::.:.:::::::::::::::::::.........::.:.::
[[: d� .
Working, unemployed, seeking work 176 65%
Complete High School or Technical College 27 10%
Four Year College 17 6%
Child welfare (protective services, foster care, other) 6 3%
Special Needs 1 0%
Unknown 44 16%
The Waiting List Consequences: Lost Opportunities
When children of low-income families cannot be enrolled in child care programs the child's opportunities
for healthy development and socialization, and the family's opportunity for economic self-sufficiency are
severely restricted. For the parents of these children,economic hardships prevail and family options are
reduced. Many families will remain unemployed or leave they current positions because they can't
afford the high cost of care. Other parents will make patchwork child care arrangements that fall apart,
or leave children in unsafe or unsupervised situations.
The community loses as well. Child care is part of the economic health of the county, and an important
economic development strategy. Day Care Services Association estimates that child care subsidies offer
a 9 to 1 return on investment. When parents work, they advance the well-being of the total
community by their ability to be economic contributors. Children also benefit from high quality child
care programs. Quality child care research documents that every dollar spent saves$7.00 in future
costs for welfare dependency,school failure,crime, and unemployment.
6
1
ORANGE COUNTY DEPARTMENT OF
SOCIAL SERVICES
CHILD CARE SUBSIDY PROGRAM
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