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Child Care Newsletter

September 2003
Vol. 2, No. 4

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NCSL Publications and Meetings
Child Care Project Update
Federal Update
Current Research Resources
Upcoming Events

State legislatures have faced difficult choices in the last several years due to the fact that budget shortfalls have compounded the complexity of funding choices for child care and early childhood education programs. Some states have considered options such as reducing income eligibility limits, instituting waiting lists, increasing parent copayments, or reducing provider payments. This article profiles three states-Connecticut, Illinois and North Carolina-that have elected to reduce funding in some areas of child care and early childhood education while maintaining spending in other areas.

Connecticut started the year with a projected budget gap for 2003 of $650 million and a projected budget gap for 2004 of more than $900 million. Proposals to balance the budget included Governor Rowland's (R) call for cuts to K-12 and higher education and reduction of state employees including layoffs and early retirement. In the child care arena, Connecticut's spending on child care subsidies for FY 2004 totals $90.3 million. The subsidy program was closed to new applicants in July 2002, but remains open to families who receive Temporary Assistance to Needy Families (TANF) benefits. Funding for the subsidy program was previously $110 million. Policy changes in the last year have included closing applications, increased copayments for families, and a reduction in income eligibility. The Connecticut Child Care Subsidy Agency reported that the reduction reflects the projected caseload of families eligible for services. The state agency reports that 8,000 families currently are on the waiting list for child care subsidies; the list was implemented in January 2003.

As in past years, Connecticut did not transfer funds from TANF for child care nor did it earmark funds within TANF for child care. In January 2002, the state began requiring TANF families that have earnings to make child care copayments. The copayment is 2 percent of monthly gross income, and this requirement continues in FY 2004. Connecticut has maintained funding for the state's prekindergarten program at $40.2 million, while the state's Head Start investment has decreased from $5.1 million to $4.5 million.

Illinois also faced difficult fiscal issues, with a significant shortfall in revenue and a projected 2004 budget gap of $3.6 billion. State spending for child care increased by $50 million for FY 2004. Governor Blagojevich (D) signed into law House Bill 294, which changes eligibility for child care assistance to 50 percent of each year's current state median income (SMI). Prior to the bill's passage, eligibility was set at 50 percent of the 1997 SMI. The bill also provides that copayments for child care services shall not be increased due solely to a change of methodology for counting family income.

The state did not transfer any funds from TANF to the Child Care and Development Block Grant, but maintained spending for Teacher Education and Compensation Helps (T.E.A.C.H.) Ò and Great START, a wage supplement program for child care practitioners who work in licensed centers and homes. Funds previously were increased for both these programs, from $2.4 million to $2.8 million for T.E.A.C.H. Ò , and from $5 million to $7.2 million for Great Start. A Tiered Reimbursement Committee was created in Illinois in 2002, and recommendations for tiered reimbursement currently are being finalized. The committee plans to meet in October 2003.

During the 2003 legislative session, an early learning council was created to coordinate early childhood services. Illinois State Senator Steven Rauschenberger, assistant minority leader, commented on the state's child care system and attributed its consistent success to the fact that the public views it as a general benefit, not simply as a welfare benefit.

In North Carolina, the effects of revenue shortfalls were projected to be felt in 2004 with a budget gap of $2 billion. North Carolina maintained most of its child care spending for FY 2004, with no reductions to child care subsidies and no changes to eligibility requirements or payment policies. No changes were made to quality activities currently funded by the Child Care and Development Block Grant. The state increased the TANF transfer to child care from $72.8 million to $79.6 million, according to the North Carolina Child Care Subsidy Agency. In May 2003, about 6,200 families were on the child care subsidy waiting list, reduced from 11,000 in January 2003.

The state reduced funding for local Smart Start partnerships, North Carolina's community-based early childhood education program, by $7.7 million. In 2002, legislators decreased funding for Smart Start by $59 million. For FY 2004, the state increased funding for More at Four, a prekindergarten program for at-risk 4-year-old children, by $8.6 million. In FY 2002, North Carolina eliminated state funding for Early Head Start centers for children under age 3 and decreased funds available for Head Start by $600,000.

Fiscal Affairs Program, State Budget Update: April 2000, (Denver, Colorado: National Conference of State Legislatures, 2003).

Sharon Parrott and Nina Wu, States Are Cutting TANF and Child Care Programs: Supports for Low-Income Working Families and Welfare-to-Work Programs Are Particularly Hard Hit (Washington, D.C.: Center on Budget and Policy Priorities, 2003).

Danielle Ewen and Katherine Hart, State Developments in Child Care, Early Education, and School-Age Care (Washington, D.C.: Children's Defense Fund, 2003).

NCSL PUBLICATIONS AND MEETINGS

The Child Care and Early Childhood Education project held a session at NCSL's Annual Meeting in San Francisco in July 2003 that addressed child care in the context of difficult fiscal times. The session, "Child Care: Hard Choices, No Easy Answers" specifically focused on the challenging decisions that states are making about allocating funds to effectively manage their early childhood systems in terms of eligibility, copayments, provider reimbursement rates and improved child care quality. The session also provided an update on the child care and welfare reauthorization debate in Congress. Session speakers included Oklahoma state Senator Penny Williams; Ohio state Representative Merle Grace Kearns; Steffanie Clothier, program manager with NCSL's Child Care and Early Childhood Education project; and Lee Posey, NCSL's senior policy specialist in Washington, D.C. Nia Wilson, staff vice-chair of NCSL's Human Services and Welfare Committee, moderated the panel.

In her opening presentation, Steffanie Clothier provided an overview of recent child care fiscal and policy changes across the country. During the past several years, legislatures have responded to the growing need for child care for working families and families leaving welfare by investing in expansions of eligibility, increasing reimbursements to providers, and focusing on improving the quality of child care. The opportunity to expand child care programs resulted from several investments. including dramatically increased federal funds in the Child Care Development Fund and the use of TANF funds for child care, as well as increased state spending. She commented that the changing economy and the peaking of TANF spending, combined with state budget shortfalls, has meant reductions in child care spending. These reductions have occurred through a variety of policy choices, including states considering income and other eligibility factors, copayments, reimbursement to providers and quality initiatives. Since 2001, 32 states made reductions or proposed reductions. According to Clothier, although child care has been on the budget cut list in many states, those cuts often were not as severe as proposed or funds were reinstated when they became available. She also mentioned that, in some of the states NCSL contacted, the cuts this year were the first after several expansions. States reported increasing provider rates and making improvements to quality, such as implementing child-to-teacher ratios and caregiver training for infants and toddlers.

Representative Kearns outlined Ohio's strategy during the last several years regarding child care legislative and policy responses to budget constraints. Her presentation also reflected on Ohio's experience this year with difficult decisions to reduce child care assistance through reducing eligibility, increasing copayments and freezing reimbursement rates. Senator Williams provided the history of Oklahoma's funding efforts for early childhood, some of the key factors in maintaining momentum with the issue, and information about a recent bill to create a partnership for school readiness. Lee Posey discussed the debate in Congress regarding the Child Care Development Fund in the context of TANF Reauthorization, both still unresolved issues facing a September 30, 2003, deadline.

The session prompted a variety of questions to the panel concerning how states made choices between eligibility changes and reductions in quality and what to expect from decisions at the federal level. For more information or to request a copy of any written materials, please contact Mari Lucero at (303) 364-7700, or e-mail her at mari.lucero@ncsl.org.

As human services budgets continue to be reduced to deal with the rising fiscal crisis in states, legislatures may wish to look for alternatives to help provide services to children and families. "Partnering With Faith-Based Organizations to Serve Youth," a session at NCSL's Annual Meeting in San Francisco on July 23, 2003, attempted to address various ways that state legislatures might do this. The session aimed to help legislators understand how the faith community has contracted with state departments of justice and human services to offer services to children and youth.

The faith community has long been a provider of child care services for children and families. Currently, it is estimated that one in six child care providers is housed in a faith-based organization. During the last three years, actions by President Bush and Congress have made it easier for faith-based organizations to pursue federal funds for their programs. In 2001, President Bush signed an executive order creating the White House Office of Faith-Based and Community Initiatives and five cabinet offices. In addition, at least 17 states have established a local office or appointed a liaison to the faith community. For more information about this annual meeting session or about the delivery of services by faith-based organizations, contact Courtney Jarchow or Amber Minogue at (303) 364-7700.

The Child Care and Early Childhood Education Project is putting the finishing touches on four policy briefs due out this fall. Funded by the John D. and Catherine T. MacArthur Foundation, the briefs are designed to provide policymakers with a comprehensive research background combined with policy options for addressing key issues in child care and early childhood education. As state policymakers consider approaches to improving early learning for young children, research can provide a sound basis for policy and investment decisions. Numerous studies have been conducted that evaluate how policies work and how they affect children's early learning and development.

This series is part of a collaboration between NCSL; Sharon Lynn Kagan, Teacher's College, Columbia University; and Bruce Fuller, University of California at Berkeley. The series is made possible due to the efforts of numerous national experts, including guidance from a national advisory committee comprised of early childhood researchers, state policymakers, and staff from national organizations. Specialty-specific research teams also were consulted for guidance and feedback in the writing of each individual policy brief. A comprehensive research synthesis of early childhood studies, state initiatives, and policy options states could consider are included in the policy briefs. The four briefs in the series are:

• Effective Investments in Early Care and Education: What Can We Learn From the Research?
• The Effects of Professional Development Efforts and Compensation on Quality Early Care and Education Services
• The Effects of Regulation on the Quality of Early Care and Education
• Infant and Toddler Care: Meeting the Needs of Families with Options That Work

NCSL report on child care and early childhood systems coordination-three states' efforts

A forthcoming NCSL report, funded by a grant from the Foundation for Child Development, will discuss the efforts of three states-Colorado, South Carolina and Washington-to coordinate their child care systems with their early childhood systems, including preschool and Head Start. NCSL's Child Care and Early Childhood Education Project staff conducted the three-state interviews with legislators, legislative staff, state agency representatives and other key stakeholders about early childhood coordination and state processes and outcomes of legislative coordination efforts. The report highlights successes and challenges of coordinating these two systems and also will provide recommendations for legislators to consider. This report follows a national survey conducted by NCSL project staff in 2002, which found that 36 states have statutes that require or encourage coordination between child care and early childhood programs.

CHILD CARE PROJECT UPDATE

The Packard, Ford and Kauffman foundations have collaborated to fund an initiative to help states measure and improve school readiness in children. Seventeen states-Arizona, Arkansas, California, Colorado, Connecticut, Kansas, Kentucky, Maine, Massachusetts, Missouri, New Hampshire, New Jersey, Ohio, Rhode Island, Vermont, Virginia and Wisconsin-currently are participating in the initiative. NCSL is working with other national partners and the state indicator teams to connect with state policymakers.

Since May, the states have come together for their fourth national meeting. Representatives from each state met in Kansas City, Missouri, in May 2003 to report on progress in developing indicators and to explore policy strategies for early childhood programs and systems. Topics of discussion included the use of Medicaid to improve health and child development and strategies to support the transition to kindergarten. The meeting also included presentations from several states regarding recent projects and successes. States highlighted included Colorado, which recently passed school readiness legislation to improve early childhood education in neighborhoods with "low-performing" elementary schools, and Ohio, which reported on the state's work in developing a comprehensive early care system through the BUILD initiative.

In the fall, NCSL will publish a short introduction to the indicators project and a policy brief highlighting the progress of the 17 indicator states and policy implications for state legislatures and governments. The next national meeting will be held in Denver, Colorado, October 8 and 9, 2003. For more information on the NCSL School Readiness Project, contact Amber Minogue at (303) 364-7700, or e-mail her at amber.minogue@ncsl.org.

FEDERAL UPDATE

The House-passed version of Head Start reauthorization legislation will face an uphill battle this fall in the Senate, where it has been criticized by both Republican and Democratic senators. Senator Gregg (R-N.H.), who chairs the Health, Education, Labor and Pensions (HELP) Committee in the Senate, and Senator Alexander (R-Tenn.) both have expressed their concern about the House bill. Senator Alexander has introduced S. 1474, which would create 200 nationwide "centers of excellence" that could demonstrate best practices and identify ways to coordinate programs. (This is a separate measure, not a reauthorization bill.) Senate Democrats are strongly opposed to the House bill and have introduced their own reauthorization bill-S. 1483.

The most publicized part of the House bill is a controversial option to allow eight states to oversee the Head Start program and coordinate it with their existing prekindergarten programs. To select this option, a state must have implemented school readiness standards in FY 2003 and would have to maintain its FY 2003 funding level for early childhood education. States also would have to provide a 5 percent match and meet or exceed current Head Start standards. Participating states would be required to provide services "at least as extensive" as the health, parental involvement, nutritional, social, and transition-to-kindergarten activities and services as those described in the Head Start Act to a base number of children equal to the number currently served in their Head Start program.

A second controversial part of the bill is a provision that relates to all programs. It would allow faith-based Head Start providers to hire teachers on the basis of their religion. This is part of a Bush administration effort to promote the rights of religious organizations in hiring practices.

The bill also contains new requirements for Head Start teachers that would apply to all programs. H.R. 2210 would require that all new teachers have at least an associate's degree in three years, and would require that 50 percent of teachers nationwide have at least a bachelor's degree by 2008.

For additional information about Head Start reauthorization, contact Sheri Steisel (sheri.steisel@ncsl.org) or Lee Posey (lee.posey@ncsl.org), or call NCSL's Washington, D.C., office at (202) 624-8196.

CURRENT RESEARCH RESOURCES

Most Head Start programs meet performance standards for overall curriculum and standards for cognitive and language development, according to Head Start: Curriculum Use and Individual Child Assessment in Cognitive and Language Development, a recent General Accounting Office (GAO) report. The data was obtained from Head Start compliance reviews and indicates that, for the most part, Head Start children were in programs that used a specific curriculum or combination of curricula. In addition, of those who had a mentor, teachers for about two-thirds of Head Start children reported receiving weekly or biweekly monitoring visits. The report is available online at http://www.gao.gov/new.items/d031049.pdf.

Almost 70 percent of 36 state-funded prekindergarten programs mandate, recommend or commonly use developmentally appropriate informal assessment techniques. This finding was highlighted in a paper, Child Assessment at the Preprimary Level: Expert Opinion and State Trends, released by Erikson Institute. Researchers conducted two surveys: The first questioned a group of 25 national early childhood leaders regarding the most important elements of a child assessment system for 4-year-olds enrolled in Head Start or similar programs, and the second focused on the specific assessment practices of state-funded prekindergarten programs. The authors concluded that, although knowledge of assessment practices has significantly increased, there still is a lack of understanding that assessment must be understood as a comprehensive system. This publication is online at http://www.erikson.edu/files/nonimages/horton-bowman.pdf.

States can integrate early education program standards in child care by directly tying standards to funding, according to Meeting Great Expectations: Integrating Early Education Program Standards in Child Care, a brief published by the Center for Law and Social Policy. The authors identify three strategies in seven states that have promoted integration, including the delivery of state prekindergarten and Head Start in child care settings and the use of child care provider contracts that include required standards. To view the policy brief or the full report, go to http://www.clasp.org/DMS/Documents/1061231790.62/meeting_rpt.pdf.

Researchers at the Urban Institute highlight the transformation of the military child care system in the United States and compare it to several state child care initiatives in Improving Child Care Quality: A Comparison of Military and Civilian Approaches. The military's success in child care is attributed to four elements of its system:

• Viewing child care as a fundamental work force issue;
• Establishing and enforcing standards for quality care;
• Training and rewarding child care workers as professionals; and
• Sharing program costs among parents and employers.

The report can be found at http://www.urban.org/UploadedPDF/410825_improving_child_care_quality.pdf.

Zero to Three, a research-based nonpartisan organization, recently issued four new fact sheets that provide research and policy recommendations for policymakers to consider regarding issues that may affect infants and toddlers. Specifically, the fact sheets focus on infant mental health, improving quality child care for infants and toddlers, TANF and IDEA Part C Reauthorization. The fact sheets are available on the Web at www.zerotothree.org/policy/.

Temporary Assistance to Needy Families (TANF) might soon become a declining source of child care funding, according to Welfare Dollars No Longer an Increasing Source of Child Care Funding: Use of Funds in FY 2002 Unchanged from FY 2001, Down from FY 2000, published by the Center for Law and Social Policy. The analysis includes detailed, state-by-state data related to the use of TANF for child care, as well as a discussion of policy implications of these data for TANF reauthorization. The paper is available online at http://www.clasp.org/DMS/Documents/1060618205.42/2002_TANF_CC.pdf.

UPCOMING EVENTS

December 10-12, 2003, Washington, D.C.

Sponsor: National Conference of State Legislatures

Contact: (303) 364-7700, Julie Bell

Web site: http://www.ncsl.org/public/meet_profdevel.htm

October 5-8, 2003, Arlington, Va.

Sponsor: National Head Start Association

Contact: (703) 739-0875

Web site: http://www.nhsa.org/training/mini_training/index.htm#transition

October 7-8, 2003, Sacramento, Calif.

Sponsor: Child Development Policy Institute

Contact: forum@cdpi.net

Web site: http://www.cdpi.net

October 12-15, 2003, Washington, D.C.

Sponsor: The Division of Early Childhood of the Council for Exceptional Children

Contact: (406) 243-5898
Web site: http://www.dec-sped.org/annualconference.html

October 19-21, 2003, New Orleans, La.

Sponsor: National Black Child Development Institute

Contact: (202) 833-2220

Web site: http://nbcdi.org/ac/overview.htm

November 3-5, 2003, Washington, D.C.

Sponsor: U.S. Department of Education, Office of Special Education Programs and National Early Childhood Technical Assistance Center

Contact: (919) 962-7316

Web site: http://www.nectac.org/~meetings/national2003/mtgsplash2003.asp

November 5-8, 2003, Chicago, Ill.

Sponsor: National Association for the Education of Young Children

Contact: (202) 232-8777

Web site: http://www.naeyc.org/conferences/default.asp

December 5-7, 2003, New Orleans, La.

Sponsor: ZERO TO THREE

Contact: (202) 624-1760

Web site: http://www.zerotothree.org/nti00/index_main00.html

January 25-28, 2004, Greensboro, N.C.

Sponsor: North Carolina Partnership for Children

Contact: (919) 639-8635

Web site: http://ncsmartstart.org/conference/index.htm