Child Care Project

Funding Inclusive Child Care

State Legislative Report--Vol. 24, No. 1--January 1999

By Terry Whitney, Senior Policy Specialist
Scott Groginsky, Senior Policy Specialist
Julie Poppe, Research Analyst

Introduction

Most working parents with young children at one time or another have had to consider the following question--Who will take care of the children while we work or attend school full time? Because more Americans with young children are working than ever before, child care has become a critical issue across the country. Policymakers nationwide have focused on expanding the availability of child care, while trying to ensure quality for parents who increasingly depend on child care. Parents of children with disabilities face even greater challenges. State, federal and local leaders are exploring funding approaches to expand the services available and to include children with disabilities into community settings with other children.

Definitions

"Child with a disability" is defined by federal law as a child with mental retardation, hearing impairments, speech or language impairments, visual impairments, serious emotional disturbance, orthopedic impairments, autism, traumatic brain injury, other health impairments, or specific learning disabilities, who therefore needs special education and related services. State and local education agencies can also define a child aged 3 to 9 with a disability as a child experiencing developmental delays, as defined by the state and measured by appropriate diagnostic instruments and procedures, in one or more of the following areas: physical, cognitive, communication, social or emotional, or adaptive development (1, p. 9).

"Child care" includes all types of education and care for young children from birth to age 5, and programs for school-aged children before and after school and during vacations. It refers to a wide range of programs located in different types of facilities, under a variety of auspices, and with different hours of operation, from part day to full day.

"Inclusive child care" ensures that children from birth through age 12 with disabilities will have access to child care in settings that include typically developing sibling and peers. Inclusive practices encompass programs, materials, equipment, curriculum, schedules, environments, family involvement and program evaluation that ensure that each child's capabilities and needs are met (2; 3, p.19).

Legislators are becoming increasingly interested in including children with special needs in child care settings for several reasons. By bringing together children with disabilities and children who do not have disabilities in child care settings, states have less need for costly special child care and early education placements. Legislators also are recognizing that these programs can help meet the needs of all children and their families. With the passage of the federal Americans with Disabilities Act almost a decade ago, policymakers at every level are exploring ways to ensure that people with disabilities have the rights to live and be educated in their homes and communities (4, p. 6). Inclusive child care programs support these rights and provide children with disabilities with the opportunity to be part of the larger community, including interacting with children and adults of various backgrounds. The policy also allows typically developing children to learn in an environment that includes children from diverse backgrounds and helps them better understand issues relating to disabilities. Good early childhood services have the potential to create communities of learning where all children learn in ways that are responsible to individual, cultural and family differences (3, pp. 14, 19). As legislators work to improve the quality of child care programs, states that have strong inclusive child care systems can offer children with disabilities these quality services.

Policymakers who are considering inclusive child care face several challenges, including development of supportive services, training of child care teachers and providers, cost, quality, and availability. Part of the problem is that there is no one location to coordinate local, state and federal efforts. Whether large or small, advanced or just beginning to deal with inclusive child care, the majority of states have not developed cogent strategies for directing investments in this area.

There are several reasons why state legislators are concerned about child care. Good early care and education programs can have a significant, positive effect on state economies, families' self-sufficiency and the successful implementation of welfare reform. In the long-term, such programs provide children with a solid foundation for later success in school, at work and in the community. Good child care and early education programs can significantly enhance children's educational attainment, level of socialization and long-term earning potential by acting as a buffer between children and a variety of risk factors (5, pp. 2-3).

In the late 1980s, state and federal approaches to welfare reform also brought more attention to child care as a critical link to long-term reform efforts. Many former welfare recipients identified the problem of finding and paying for child care as a barrier to their individual efforts to enter the work force. Accordingly, states and many counties, backed by larger state and federal reform initiatives, addressed child care issues, including supply, quality and funding. The result was a patchwork of programs across states with little state coordination.

Financing

Beginning in the early 1990s, several state legislatures led efforts to better coordinate child care programs that had different funding sources. These sources included child care for welfare recipients, families that are making the transition from welfare, and other low-income families. The 1996 federal welfare act consolidated these funding streams into one Child Care and Development Block Grant (CCDBG), also referred to as the Child Care and Development Fund (CCDF). During the past decade, legislators in many states have demonstrated a strong commitment to child care funding for low-income families.

As states implement new work requirements and other welfare-related child care policies, policymakers also face the challenge of coordinating the CCDBG with other funds to better support inclusion for children with disabilities. With enactment of the federal Individuals with Disabilities Education Act (IDEA) in 1990, state policymakers began to focus more attention on working with child care providers to increase the availability of services to children with disabilities and special needs. In addition to IDEA and CCDBG funds, states are using an array of other federal funding opportunities for child care for children with special needs. According to the U.S. Department of Health and Human Services (HHS) report, Passages to Inclusion: Creating Systems of Care for All Children, potential funding sources for inclusive child care programs include:

Child Care and Development Block Grant (CCDBG)

Provides states with child care subsidies to low-income working families to improve affordability, quality, availability and accessibility of child care services.

The Individuals with Disabilities in Education Act (IDEA)

Two parts of IDEA relate most to children with special needs. Part C (formerly Part H) authorizes financial assistance to states to develop and implement a statewide, comprehensive coordinated program of early intervention services for all infants and toddlers with disabilities and their families. Part B authorizes these services for children preschoolage and older.

Medicaid

A health insurance program for certain low-income and needy people, including children, the aged, the blind and people with disabilities. It covers roughly 36 million people.

Supplemental Security Income (SSI) Benefits

Provides monthly payments to financially needy people with a disability or who are older than age 65.

Family Support/Family Preservation

These services provide state child welfare agencies and eligible Indian tribes with funds to establish and operate integrated, preventive family preservation services and community-based family support services for families that are at-risk or in crisis.

Other potential sources are:

Child Health Insurance Program (CHIP)

Enables states to initiate and expand child health assistance to uninsured, low-income children. The program expands health insurance coverage requirements to the amount, duration, and scope of benefits and eligibility for children under states' Medicaid programs.

Maternal and Child Health Block Grant (MCHBG)

Provide support for children who have actual or suspected developmental disabilities or chronic illnesses through such services as prenatal care; child health services, including immunizations, well-child examinations, and treatment or referral; school health services and education programs; and specialized health services.

Social Services Block Grant (SSBG)

Provides funds to states to support a wide range of social services, including child care, child protective services, transportation, counseling, and employment services.

Head Start

Provides early childhood education services to children between the ages of 3 and 5 who live in poverty or who have a disability. A recently established Early Head Start program provides comprehensive family support services for infants and toddlers.

State Innovations for Funding Inclusive Child Care

This report focuses on funding inclusive child care. It provides examples of three states3/4North Carolina, Nevada and Illinois3/4that have varying degrees of comprehensiveness and coordination. Because of space limitations, detailed discussions are included of these states which have developed various funding approaches. By presenting the experiences from these states, the authors by no means intend to diminish the innovations adopted by other states. This report also discusses the recent federal effort to develop state teams of stakeholders who are working to improve their state systems of child care for children with special needs.

North Carolina

North Carolina lawmakers, administrators and other stakeholders have established a system of funding inclusive child care that draws on a multitude of sources. By creatively using both federal and state funds, officials from several state agencies have coordinated a wide array of services for children with special needs. Because counties in North Carolina deliver social services, county stakeholders have some degree of authority in making key decisions about including children with disabilities in child care programs.

In regard to federal funding, legislators and other state decision makers have identified a variety of sources. Like many states, much of North Carolina's federal funding for inclusive child care comes from IDEA and the CCDBG. State policymakers have, however, gained access to funds from Head Start, Early Head Start, CHIP, Medicaid and the Maternal and Child Health Block Grant.

Several years ago, North Carolina rule required counties to set aside a minimum of 4.5 percent of their federal CCDBG allocation for child care for children with special needs. In 1997, administrators eliminated the set-aside, but required that counties maintain previous levels of funding for inclusive child care. Some counties have since increased these budgets. To further the level of support, state administrators also increased the reimbursement rate for special needs child care services.

Federal CCDBG rules require a state to spend at least 4 percent of its allocation on quality child care activities. In 1997, HHS required that states undertake activities to increase the quality and capacity of infant and toddler care and, as allowed under this regulation, North Carolina spends part of this set-aside for including children with special needs in child care programs (6, p. 1).

North Carolina's use of federal IDEA funds covers children of a range of ages. By combining Part C and Part B funds with federal Maternal and Child Health Block Grant funds, state leaders contracted with the Frank Porter Graham Child Development Center at the University of North Carolina to recruit and train inclusive child care providers. In addition, state administrators planned and implemented a request for proposals for collaborative approaches to inclusion by establishing partnerships of the local Part C system and the state's child care resource and referral office. The state committed $480,000 to this process.

State policymakers also use Part C and Part B funds for assistive technology services (which are devices that help a child interact with his or her environment), such as wheelchairs, computer talking boards, adaptive toys and equipment. In 1992, the legislature appropriated $250,000 in state funds and state administrators used $750,000 in Part H funds for this program. In 1994, state administrators expanded the program to include an older population by directing Part B funds for these services. State leaders are using $2.42 million in state and federal funds in FY 1999 for assistive technology services. Officials from the state's maternal and child health, mental health, developmental disabilities and substance abuse agencies collaborate on this program.

As part of its match for Medicaid expansion grants, the North Carolina legislature appropriated a $6 million increase for Medicaid reimbursement for case management that includes specialized occupational, physical and speech therapy. These funds support other activities, including developmental day centers that serve typically developing children in settings that include children with special needs, reduction in waiting lists for inclusive child care services and consultation and support for child care providers of Part C-eligible children. The legislature established a permanent line item of $450,000 to serve typically developing children in developmental day centers (7, pp.82-88). The 1998 legislature also coordinated the new state Child Health Insurance Program (CHIP) with Medicaid by including the same package of services for children with special needs in CHIP as is included in Medicaid. These benefits include dental coverage; hearing, vision and speech screening; and medical equipment for children in child care.

North Carolina's system of care for children with disabilities also draws on several other federal funding sources. State policymakers coordinate Head Start funds with child care services under the CCDBG for full-day coverage that supports working families' needs. In addition, state decision makers direct more than $600,000 in state Early Head Start funds for young children with special needs to participate in Early Head Start. State administrators also use the Title XX Social Services Block Grant for inclusive child care and draw on the Maternal and Child Health Block Grant for activities that promote health care services in child care settings.

During the past six years, the North Carolina legislature has increased the state's funding commitment to Smart Start, the primary state early childhood initiative. This nationally recognized initiative authorizes county partnerships to develop child care services that are based on community needs. In its orientation of local Smart Start partnerships, the state division of child development provides policy guidance to counties to assist them in using some of their Smart Start allocation for inclusive child care. Counties used $4 million in Smart Start funds FY 1998 and plan to use an estimated $6 million in Smart Start funds on early intervention services for children between birth and age 5.

The legislature has established several other funding opportunities to include children with disabilities in child care settings. Legislators appropriated $2.8 million in FY 1998 and $5 million in FY 1999 to speed up the establishment of an individual plan for a child from birth to age 3 with a disability. Legislators appropriated the funds after learning that North Carolina was identifying children with special needs too slowly so the children lacked access to needed services. The increased funds, which now are automatically placed in the state's annual budget, have allowed state officials to develop the plan within 45 days of a referral, which is required under IDEA. Because of the expedited plans, state officials are identifying children with special needs sooner3/4 at an average age of 6 to 8 months3/4 instead of age 2.

Nevada

Nevada demonstrates its commitment to providing quality child care to all children by using several strategies. State administrators currently are developing a strategic child care plan to improve the quality of child care in the state, including providing child care to children with special needs. To support training of child care providers, offer resource and referral to parents of children with special needs and provide support services to families that have children with special needs, state decision makers have used a variety of federal funds, including the CCDBG, Part C of IDEA, and Head Start/State Collaboration. In addition, they have invested state funds.

As do many states, Nevada uses CCDBG funds to provide child care to children with special needs. The state currently uses more than $600,000 of CCDBG funds for several purposes. One use is to provide educational information about the ADA and inclusion programs to child care providers who are working with children with special needs. These funds also support training for child care providers who serve typically developing children so they can be prepared to serve children with special needs for inclusion in their programs. These funds are targeted to child care professionals in both rural and urban settings. In addition, state administrators use these funds to provide resource and referral services and subsidies to families with special needs children.

Nevada policymakers supplement other federally funded programs with state funds that address child care inclusion issues. Project Exceptional is a three-year training and project development grant using $50,000 in Head Start/State Collaboration funds. This project established interagency and community-based teams, comprised of at least one parent of a child with a disability, a special educator or early interventionist, and a caregiver. Based on a training of trainers model, teams recruit local child care and education providers and train them in providing care and education for special needs children in inclusive community settings. The program has developed training materials for child care and education providers and designed training workshops for college instructors of early childhood courses and local interagency training teams. Project staff trained 10 teams in 1997 and five additional teams in 1998. Current federal funding will end in February 1999. The state is examining potential state funding and proposing to pool money from three state agencies--special education, early intervention and child care (8, pp. 6-7).

Nevada also provides inclusive services in a family support environment through a combination of state and federal funds. The state Early Childhood Services Program provides early childhood mental health and family support developmental services from several agencies to families with special needs children from birth to age 6. During the 1997-98 fiscal biennium, the state used approximately $2 million for this program. More than half the money came from the state general fund; and the remainder came from federal funding sources, including Part C of IDEA. The Early Intervention Partners Program, in collaboration with the University of Nevada, provides early intervention training to family and center-based child care providers. With this funding, at least 80 child care providers have received training and at least 29 children have received services (9, p. 142).

The Nevada Legislature has invested state funds to provide family support services to all families with children under the age of 1. In 1997, legislators appropriated $8 million in the fiscal biennium to the Family to Family Connection Program, which provides these family support services. The money provides block grants to community organizations within 13 infant support districts (ISD) for voluntary services to families that have infants from birth to age 1. This program also provides early intervention services for infants and toddlers who have developmental delays and special needs at four ISD sites throughout Nevada. In order to train ISD providers, the state also used $800,000 from the CCDBG for training statewide. Since July 1998, when the program became fully operational, more than 400 people who provide services to children have been trained, including child care providers (10, p. 10).

Legislators adopted several children's initiatives in the 1997 legislative session, including a resolution that designated October as Nevada's month for children with special needs. The resolution, ACR5, urged state government agencies, in coordination with the Early Intervention Interagency Coordinating Council, to emphasize and support public awareness programs on the importance of serving children with special needs (7, pp. 68-70).

Illinois

The state of Illinois has a long history of providing for early childhood education (ECE) programs, dating to the 1800s when Hull House had a day nursery in Chicago. More recently, in 1983, the Illinois State Board of Education directed its staff to conduct an early childhood education policy study. In 1997, the state legislature adopted a landmark policy decision that assures child care services to a defined population of the state's poor families. However, the state has just begun to pursue strategies for the establishment of inclusive child care settings.

The state currently is maintaining an 11-site pilot program that grew out of responses to a state-issued request for proposals for $41 million in child care expansion and quality enhancement throughout the state in 1997. Accordingly, the state is negotiating special rates for local programs that serve children with special needs to induce child care providers to open more child care slots for such children. Interestingly, although Illinois is a large state, this serves as the lone state-directed initiative to address quality child care for children who have special needs.

Illinois has identified a host of different projects in Illinois that are simultaneously attempting to address inclusive child care issues. These efforts include the following:

The PIECE Project, a five-year University of Illinois based project focused on preparing teachers to meet the diverse needs of children with disabilities and who are served in integrated preschool settings.
Project Early Choices, funded by the Illinois State board of Education since 1990, is a "least restrictive environment" initiative that assists school personnel to develop an array of typical preschool and day care settings in which children ages 3 through 5 can be educated with services and supports available. Additionally, the Early Choices project provides technical assistance and on-site consultation to school districts for including children with disabilities into typical preschool settings. In FY 1997-98, this program was funded at $430,866.
The STARNET Regional Early Childhood Technical Assistance Project, which also is funded through the Illinois State Board of Education, provides training and technical assistance to the early childhood community in the area of inclusive child care. Recipients of STARNET technical assistance may include families and all providers of services to young children with and without disabilities. This program was funded at $2,100,000 in FY 1997-98; $350,000 was allocated to each of six regional centers.

One innovative approach the state has taken to provide additional child care slots is the use of the Illinois Facilities Fund (IFF). The IFF is a community development financial institution that makes loans to Illinois human services agencies that rely on government contracts and are unable to obtain other financing. The IFF promotes inclusive child care by working directly with child care centers to provide placements in the centers it finances for children who have special needs. By borrowing funds through tax-exempt bonds, the IFF has constructed eight child care centers and is in the process of renovating two other centers. The total project will cost $16.8 million. Tax exempt bonds were used to finance approximately $13 million, with the balance provided by equity from IFF and donations or other sources. This unique partnership between private, nonprofit corporations, government agencies, foundations and the public capital markets is the first of its kind in the country (7, pp. 26-32).

Federal Efforts to Spur Inclusive Child Care

In 1997 the U.S. Department of Health and Human Services, through its Child Care Bureau, began funding a national project to increase awareness about inclusive child care. The Map to Inclusive Child Care project offers an important opportunity to ensure that children from birth through age 12 with disabilities will have access to child care alongside their more typically developing siblings and peers. Fueling the project is the premise that efforts to support child care providers to accommodate the individual needs of children with disabilities can go hand in hand with improvements in the quality of care for children (2).

In its first year the Map project began working intensively with 10 states3/4 California, Indiana, Iowa, Maryland, New Jersey, New Mexico, Oregon, Tennessee, Utah and Vermont. These states3/4 and 10 others in 19993/4 will receive technical assistance to address multiple, interrelated aspects of their child care delivery systems. Each state has team of key stakeholders who are involved in child care in both the public and private sectors, together with special education, early intervention and child care administrators. The Map project engages participating state team members in a strategic planning process, through which they target priorities and create work plans relevant to the particular issues of individual states.

Although each state Map project has unique goals and strategies, state team representatives developed plans in 1998 that included common ideas. First, many of the state teams suggested coordinating the various public funding sources that are available to them for inclusive child care. State team leaders identified several approaches, including making funding more flexible, blending pots of funds, and instituting more systemic planning across agencies, specifically among health, human services, education and disability agencies. Another common team strategy included strengthening training and education for child care providers to improve their abilities to work with special needs children. Many team leaders also proposed to focus more on involving parents of children with disabilities in key decisions about child care programs. In addition, most state teams expressed an interest in creating public awareness campaigns to educate people about the importance of inclusive child care services for children with special needs. As part of this effort, some team representatives recommended using these public awareness efforts to expand legislative support (11).

The Map project is enhanced through the collaboration of five expert organizations, including the National Conference of State Legislatures, Zero to Three-The National Center for Infants, Toddlers and Families, the National School-Age Care Alliance, the National Child Care Association and the Federation for Children with Special Needs.

Julie Preston, student intern, provided research assistance for this report and Children and Families Program Director Jack Tweedie edited the report. The report was made possible by the Child Care Bureau, Administration for Children and Families, U.S. Department of Health and Human Services, through a contract to the United Cerebral Palsy Associations Inc. The authors wish to thank state contacts in Illinois, Nevada and North Carolina who provided information and reviewed sections. We also thank Anne Goldstein of the National Child Care Information Center and Anne Mitchell of Early Childhood Policy Research, who reviewed the publication.

Notes

1. IDEA Amendments of 1997, 105^th Cong., HR 5.

2. Map to Inclusive Child Care: A Federal Initiative to Promote Inclusive Child Care, Project Description, 1998.

3. National Child Care Information Center, Passages to Inclusion: Creating Systems of Care for All Children, Monograph for State, Territorial and Tribal Child Care Administrators (Vienna, Va.: NCCIC, 1997).

4. Bea Gold, Child Care Bulletin, "Caring for Our Children," (Washington, D.C., U.S. Child Care Bureau, Sept./Oct. 1995).

5. Mary L. Culkin, Scott Groginsky and Steve Christian. Building Blocks: A Legislator's Guide to Child Care Policy (Denver, Colo.: National Conference of State Legislatures, 1997).

6. "Innovative Programs in Infant/Toddler Child Care," U.S. Child Care Bureau web page, www.acf.dhhs.gov/programs/ccb/policy/newmoa~2.htm.

7. National Child Care Information Center, "State MAP Plan Summaries," (Washington, D.C.: NCCIC, 1997).

8. Wendy Whipple, "Project Exceptional: Inclusion for Young Children with Disabilities," The Silver Link Newsletter (Reno, Nev.: Nevada Department of Human Resources, 1998).

9. Jane Knitzer and Stephen Page, Map and Track: State Initiatives for Young Children and Families, 1998 Edition (New York, N.Y.: National Center for Children in Poverty, 1998).

10. State of Nevada Family to Family Connection Program, "Report to Budget Division and Interim Finance Committee", November 1998.

11. Presentations of state teams, National Institute of Map to Inclusive Child Care Project, August 1998.

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