Brief Highlights Need for Increased Investment in Affordable, Accessible Child Care


April 27, 2015
For More Information Contact:
Stephanie Hogenson 651-855-1175 or 612-978-7365 shogenson@childrensdefense.org

Increasing access and affordability of child care increases family economic security, improves children’s cognitive and social development, and ensures businesses can find and keep the employees they need, according to Child Care: A Two Generational Approach to Economic Security, a policy brief released today by Children’s Defense Fund-Minnesota (CDF-MN).

As an expense that is often necessary for parents to work, affordable child care is essential for most Minnesota families. Sixty-five percent of Minnesota children under age 12 are in non-parental care each week, according to the 2009 Wilder Statewide Household Child Care Survey. The cost of center-based infant care in Minnesota is more than a year’s tuition at the University of Minnesota and is the 4th highest in the country, according to the brief. The average cost of center-based care consumes 19 percent of the annual median household income for families raising children in Minnesota ($73,900).

The brief cites three solutions to increasing access and affordability of child care: Fund the Basic Sliding Fee (BSF) Child Care Assistance Program[1] so that all eligible families, including the 5,800 families on the waiting list, can afford the child care that meets their needs; raise the state’s reimbursement rates to child care providers so that providers can afford to accept families using the Child Care Assistance Program; and increase and expand the state’s Child and Dependent Care Tax Credit to help more low and moderate-income families afford the high cost of care.

“Low and moderate income families simply can’t afford the cost of safe, consistent child care that parents need to go to work and children need to thrive,” said Stephanie Hogenson, CDF-MN Research and Policy Director. “For many Minnesota families, child care is the single greatest expense in their budget and the high cost impedes their ability to meet other basic needs like food, housing, health care and transportation. Increasing accessibility and affordability of child care is critical to the state’s prosperity because it increases workforce productivity, improves child outcomes in school and later in life, and increases family economic stability.”

The report notes that there have been no significant new investments in BSF since 2006, and those investments didn’t fully restore the $200 million in cuts made during the 2003 and 2005 legislative sessions. Since 2003, BSF funding decreased by 44 percent (adjusted for inflation) and the program now serves 4,500 fewer families. As of  February 2015, nearly 5,800 families across the state are on a waitlist for BSF. Moreover, the state’s reimbursement rates to child care providers that accept child care assistance have eroded over the past decade from nearly 60 percent of provider rates being fully covered by the state’s maximum reimbursement rate to only 30 percent. The Minnesota Senate Health and Human Services committee allocated $19 million for the 2016-17 budget cycle and $24 million for 2018-19 budget cycle to increase access to BSF. This increase would expand the program to serve 700 more families, or 12 percent of the waitlist. The Minnesota House tax omnibus bill included an expansion and increase of the Minnesota Child and Dependent Care Credit.

“Children can’t wait, working parents can’t wait and businesses can’t wait any longer for affordable, accessible child care,” said Peggy Flanagan, CDF-MN Executive Director. “The time is now to fully fund Basic Sliding Fee Child Care Assistance, increase provider reimbursement rates and expand the Minnesota Child and Dependent Care Tax Credit.”

The full report can be found online at http://www.cdf-mn.org/search/child-care-a-two-1.pdf.

The Children’s Defense Fund Leave No Child Behind® mission is to ensure every child a Healthy Start, a Head Start, a Fair Start, a Safe Start and a Moral Start in life and successful passage to adulthood with the help of caring families and communities.

Children’s Defense Fund-Minnesota is part of the Kids Can’t Wait coalition comprised of organizations and child care providers across the state that are working together to advocate for affordable, accessible child care for all Minnesota families.

 

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[1] Basic Sliding Fee is one of three programs included in the Minnesota Child Care Assistance Program, a federal block grant program. The other programs are for families accessing the Minnesota Family Investment Program (MFIP) or families transitioning off of MFIP.