EXCERPT FROM: The News Journal
By Mike Chalmers
Before the recession, the Mary E. Herring Child Care Center in Wilmington watched more than 56 children a day while their parents worked.
But as jobs vanished, so did the kids. Enrollment at the center, which serves mostly low-income families who get state-subsidized care, dropped to just 14 children. Organizers of the 40-year-old nonprofit center considered closing.
"We're struggling to get by," director Juanita P. Matthews said. "We hope and pray we get some more children."
Throughout the state, the number of families receiving subsidized child care dropped dramatically during the recession, said Elaine Archangelo, director of the Delaware Division of Social Services, which administers the "purchase of care" program. Parents who don't have a job can't afford, and may not need, day care.
Average monthly enrollment in the program fell 10.5 percent in the past four years, from 15,039 in fiscal year 2007 to an estimated 13,462 in fiscal year 2010, which ended last week, state figures show.
Making matters worse, the state pays providers only a portion of the market rate, with no increase planned. A 2009 study showed Delaware had one of the largest gaps in the nation between its subsidy rate and the market rate.
Archangelo said enrollment recently has begun to rise again as the economy slowly recovers. At Mary E. Herring, enrollment is now up to 20 children, Matthews said.
While that's good news for the roughly 1,700 child-care providers who accept subsidies, Delaware would have to come up with the money for a growing caseload, Archangelo said.
The state budgeted $49.6 million in state and federal money for the child-care subsidy program in the 2010-11 budget, an increase of just 0.3 percent from last fiscal year.
Tough choices, tough times
Archangelo said the state has some room in its budget to handle modest enrollment growth, though she couldn't say how much. She said she hopes the federal budget, which Congress will pass late this year, includes more money for the program.
If it doesn't -- or if enrollment climbs significantly -- the state would face choices that could hurt working families, child-care providers or both. The state could tighten eligibility rules, cut the subsidy rate or put families on a waiting list, Archangelo said.
Cutting the rate "would be a hard sell, especially because the rates are already so low," Archangelo said. "I don't want to worry people with the idea of a waiting list," a measure the state hasn't imposed since 1995, she said.
Without it, Patrick would have to pay about $600 a week to enroll her four children, ages 1 to 6, in day care. Instead, through subsidy and financial help from the nonprofit Newark Day Nursery, Patrick pays just $12 a week.
"If I didn't have day care, I wouldn't be able to work," said Patrick, who works part-time for $7.50 an hour while she looks for better-paying work.
The subsidy rate varies by county, children's age and type of care; large centers are paid more than small, family operations. A day-care center in New Castle County gets $29.50 a day from the state to care for an infant, while a family-sized business in Kent or Sussex counties gets $13.74 a day to care for a preschool-age child.
Those rates have not increased since 2006, Archangelo said.
Since then, the subsidy rates have fallen further below market rates, Archangelo said.
A New Castle County day-care center caring for an infant, for example, could get an average $47 a day on the private market, almost 60 percent more than the subsidy rate, according to the state's 2009 market rate study.
It was one of the largest gaps in the nation in a 2009 study by the nonprofit National Women's Law Center in Washington, D.C. The study found a 41 percent gap between the subsidy and the market rate for center-based care for a 1-year-old; only Michigan and Texas had bigger gaps.
Archangelo said no increase is planned for this year. The state will conduct a market rate study in 2011, as it does every two years.
Smaller centers suffer
The gap is slowly crushing small child-care providers like Claudette Sherwood, who cares for four children in her New Castle home. She is licensed to care for as many as nine.
"We're the ones who are keeping the state functioning," Sherwood said. "Without child care, you can't go to work. If parents can't work, then employers can't maintain their businesses."
Large centers also are struggling, said William Carl, executive director of Newark Day Nursery.
To fill the gap, the nursery must find donations or grants, he said. That search has become harder in the wake of the recession because people, businesses and philanthropic foundations have less money to give, he said.
The center is facing a deficit, its first in several years, of $40,000 to $50,000, he said.
At the same time, child-care centers are preparing to meet new state regulations aimed at improving the quality of care, Carl said. The rules, which take effect Jan. 1, require lower staff-child ratios, smaller groups and more training for workers -- all of which will increase providers' costs.
While he supports the goal of the new rules, they make Delaware's stagnant reimbursement rates even tougher to swallow.