MONTPELIER -- The Joint Fiscal Committee, the Legislature's off-season financial oversight panel, endorsed a plan Thursday that will restructure the state's subsidized child care program.
The Legislature previously gave conceptual approval for the restructuring and provided $4.8 million extra to cover new costs. Lawmakers directed the oversight panel to review and approve the detailed plan before the administration implemented any changes.
The changes include adoption of new income guidelines that will give eligible families more assistance, and higher rates of pay for day care centers and home care providers. It also eliminates guaranteed and supplementary payments the state has given some providers to ensure adequate slots for infants and children from families that received subsidies.
"This doesn't solve all the problems of the child care system, but it put us in a place to move forward," said Steve Dale, commissioner of the Department for Children and Families, which oversees the child care program.
The state hasn't updated its income guidelines since 2000, making it "in serious noncompliance with federal guidelines," Dale told lawmakers. The out-of-date income scale meant parents faced difficulty finding child care they could afford because their subsidies were too small.
The small subsidies also left child care providers underpaid if they accepted state-subsidized children.
To solve these twin problems, the state had been granting variances -- paying more on a case-by-case basis. The number of variances was up to 650 in 2008, Dale said.
Also, to ensure day care providers would accept state-subsidized children, the state had paid to reserve spaces and provided special grants to encourage infant and toddler care, which is more expensive because it requires more caretakers.
Under the restructuring that will take effect Jan. 3, the level of income that allows a family to receive a 100 percent subsidy would increase. For a family of three, for example, the income with maximum benefits would rise from $14,148 a year to $18,300. For a family of four, full benefits would be available up to $22,044.
The restructuring plan doesn't substantially raise the upper end of the income eligibility scale, Dale noted. A family of four, for example, currently qualifies for some assistance with income up to $42,747 a year. Under the revised scale, the upper limit for a family of four would be $44,088.
All the varied rates paid to day care providers would increase. For example, the base amount paid for infant care would go from $129 a week to $137 a week. Facilities that have earned "stars" for training and quality improvements receive higher rates under the state's program. With the change, a one-star provider would get $144 for infant care, up from $134. A five-star provider would get $192, up from $155.
Dale told lawmakers the extra appropriation -- $3.3 million in general tax dollars and $1.5 million through the federal stimulus program -- made it possible to make the changes without adversely affecting many participants. However, Dale said some providers would see their income reduced because the state no longer would reserve slots or provide infant and toddler grants. A grant program has been created to help them during the transition.
Rep. Ann Pugh, chairwoman of the House Human Services Committee, recommended approval of the plan -- with conditions.
Pugh said her committee worries about unintended consequences from elimination of reserved slots and infant grants. For example, her memorandum asked, could this change shrink the slots available to parents with the great needs?
Pugh recommended the department report to lawmakers about effects in March, three months after the program is launched, and again a year later. The Joint Fiscal Committee agreed to this requirement.