State Banks Money for Child Care

As business slows, Alicia Jones worries she will not have enough hours of work to qualify for child-care assistance from the state.

"I can't work without child care," said Jones, a single mother of four who works about 30 hours a week and is awaiting state approval for assistance.

"This was bad policy before we were experiencing a recession. Given the current economy, it's very bad policy."

French said the state is violating the intent of the federal economic recovery act, if not the child-care assistance law itself.

Federal child-care assistance is one of the few recovery programs that requires states to use the money to "supplement, not supplant" existing spending, she said.

"That's why the federal stimulus funds were allocated to states - to expand child-care assistance and support for working families."

Even though Jones, 26, makes $8 an hour, she said it's better than supporting her children on welfare.

A state check barely pays her subsidized rent, let alone cover winter coats for her children — ages 7, 4, 1 and 3 months - and medicine or other expenses.

"I can make it work as long as I have child care," she said.

Jones, who snagged a couple of extra hours Friday cleaning the north-side child-care center where she works, said she's been lucky. First, the center hired her, even though she had her children with her as she applied for jobs with no one to watch them.

Second, her employer has given free child-care until she can qualify for state assistance. She knows that will end soon.

"They're going to need to give those spots to people who can pay," she said.

Iowa among restrictive in providing support

Roger Munns, an Iowa Department of Human Services spokesman, said the state is being cautious in using the federal child-care assistance because demand could erupt next fiscal year, primarily for welfare assistance.

The state wants flexibility in moving around state and federal money to meet growing needs, he said.

The federal government has approved the state's plan, Munns said. The state knows more Iowans may be struggling to continue child-care assistance. That "would also be true no matter what threshold was set," he said. The state rules "provide assistance to those most in need and do so without creating waiting lists."

French said only four states have more restrictive rules than Iowa in deciding who can qualify for child-care assistance.

In addition to each parent working at least 28 hours, recipients must meet income limits. For example, the state requires a family of four to be paid no more than $30,744 a year, or 45 percent of the state median income of $67,792.

The human services department said many Iowans are in need of child care.

"Almost half of Iowa families with young children earn less than $35,000 a year," the state wrote in its annual report. For families with preschool children, child care is the second-highest expense after a mortgage, the state said, noting that a family with two children pays an annual average of $9,000.

Still, the state decreased the amount of money going toward child-care assistance this fiscal year, which began July 1.

Data show child-care demand falls off

Data from the state show child-care spending will decline nearly 6 percent, or about $8.4 million, to about $134.5 million this fiscal year. The state's portion of spending fell 6 percent, or about $3.7 million, to nearly $54 million.

Although concerned about creating a waiting list, state officials carried over $17 million in child-care money from fiscal year 2008 to 2009 and $16 million from 2009 to 2010.

French said miniscule growth in the state program during the economic crisis — 3 percent in fiscal year 2009 - indicates the state is failing to reach enough families. The state itself estimated an increase of 4 to 5 percent before the national recession hit last fall.

Iowa's growing jobless rate - 6.2 percent in June, a 22-year high — is one reason demand for child care has failed to climb as anticipated, Munns said. More unemployed parents are home.

The state lost 43,000 jobs in June. An estimated 2,000 Iowans each week are exhausting their unemployment benefits, Iowa Workforce Development said.

Although state data are not available, work-force leaders have said they believe more Iowans are working part-time jobs to replace lost full-time wages. Federal labor data for June showed 8.9 million people are working part time because of the poor economy, an increase of nearly 60 percent over a year ago.

Altogether, 137.8 million Americans had part-time work.

Since the beginning of the recession, 4.4 million workers have become "involuntary part-time workers," the U.S. Bureau of Labor said.

Rules often penalize those who want to work

Sue Tosten, child care program supervisor for Children and Families of Iowa, said the state program's rules penalize families who want to work.

A parent working 28 hours and earning minimum wage would spend most of a paycheck covering the child-care center's $134 weekly charge.

"They have a job they can't really live on," she said, "Now, they can no longer qualify for child care."

Before the recession, Stacey Walter of United Way of Central Iowa said she saw parents decline pay raises, ask for fewer hours or quit jobs for a lesser-paying one so they could continue qualifying for child care.

"The system doesn't allow a family to pay more if they make more," Walter said.

"A family could go from paying $30 a week for child care to $150, all because they got a 50-cent raise. The math doesn't work."

A legislative report two years ago estimated it would cost between $7 million to $30 million annually to expand the program from 155 to 200 percent of the federal poverty limit. The state now provides care at 145 percent.

The state estimated in the report that expanding the co-pay would reduce the cost between $444,000 and $9 million.

An average of 1,723 to 7,407 children could be added each month, depending on the income level adopted.

French estimated the state would see $4.5 million to $6.8 million immediately in additional tax revenue if more families could continue working.

Full text available at Des Moines Register.