BALTIMORE » With states under pressure to cut their budgets and federal stimulus money gone, low-income working parents are facing a paradox. Just when they have to work longer hours to make ends meet, they are losing access to the thing they need most to stay on the job: a government subsidy that helps pay for child care.
The subsidy, a mix of federal and state funds that reimburses child care providers on behalf of families, is critical to the lives of poor women. But it has been eaten away over the years by inflation and growing need and recently by state budget cuts, leaving parents struggling to find other arrangements to stay employed.
"States have dropped their investment in child care substantially," said Linda Saterfield, vice chairwoman of the National Association of State Child Care Administrators, who oversees child care for the state of Illinois. "We’re being expected to do more with less." Her state has toughened eligibility for the subsidies and raised co-payments from families to cover the growing demand.
Sheontay Smith, a single mother in Baltimore, and her son are among nearly 8,000 families on a waiting list for the subsidy in Maryland. Pennsylvania’s list doubled since last year to more than 10,000 children, and Arkansas’ quadrupled to 11,000, according to the National Women’s Law Center. At least two states, Arizona and Utah, are no longer appropriating state general funds for child care at all.
According to a recent report by the law center, families in 37 states were worse off this year than last year as waiting lists grew, co-payments rose, eligibility tightened and reimbursement rates for providers stagnated.
"We recognize that this is a tough time for states," said Shannon Rudisill, who oversees the subsidy program at the Administration for Children and Families, which is part of the Department of Health and Human Services. "They have a hard set of choices that they have to negotiate."
She said that President Barack Obama had recommended an increase in the subsidy in the 2011 budget, but that it had not been approved by Congress. Stimulus money, which had raised financing by a fifth in 2009 and 2010, is now gone.
Christian Griffith, chief consultant of the California Assembly Budget Committee, said the state had cut $335 million in its financing for child care this year, but with hundreds of millions in cuts to other public services — courts, schools and the public university system — "there aren’t many good options at this point."
The nonprofit Child Care Resource Center, which determines eligibility for the subsidy for thousands of families in northern Los Angeles County, said it had noted a 13 percent decline in licensed child care centers since June 2010 as budget cuts reduced the numbers of families on the subsidy.
The reduction is prompting advocates for poor women to question whether the implied social contract that emerged during the federal welfare overhaul in the 1990s — that women go to work in exchange for help with child care — is fraying.
"There’s a long history of recognition that child care is essential to helping low-income women work," said Helen Blank, the director of public policy at the National Women’s Law Center, who helped shape child care policy in the 1990s. "That commitment is being eroded."
For children in families waiting for the subsidy, life becomes a kaleidoscope of caretakers. Women interviewed for this article said they left their children with grandparents, neighbors, cousins, siblings, and colleagues at a nail salon. Such ad hoc arrangements hinder early-childhood development, state administrators say, just as states are trying to make it a priority.
One mother on a waiting list in Virginia said her 11-year-old daughter rode around in a city bus after school, watched over by the driver, who is the girl’s grandmother, until the mother got off work.
The smaller safety net comes as the share of working Americans under or just above the poverty line — the target group for the subsidy, which is linked to income — is the highest in years. And while demand for the subsidy declined with the recession, it has shot back up in many states as employment has returned, putting new strain on child care resources.
"We’ve seen quite a steep increase in demand," said Elizabeth Kelley, director of Maryland’s Office of Child Care.
Smith, who works full time at the Baltimore Housing Authority, has been on a waiting list since summer. She applied because her son’s father stopped paying child support, and the monthly $520 she needed for her 3-year-old’s day care was more than her $22,000 salary could support.
She took her son out, but ended up losing half her paycheck in unpaid days off because her regular baby sitters, among them Smith’s grandmother, who is on kidney dialysis, fell through. The only way to get the subsidy, her caseworker told her, was to stop working and go on welfare. (In Maryland, someone on welfare is automatically eligible.)
"Is the system set up for me to fail? Because that’s what it feels like," said Smith.
Her son is now back in day care, at the expense of other bills. Her phone was cut off this week, and she is behind on her gas, electricity and car insurance.
Another hurdle has been the rates at which the centers are reimbursed. The law center’s report found that only three states reimburse at federally recommended levels, down from 22 in the beginning of the decade, and some providers say they can no longer afford to take families on subsidies. Toni Cacace-Beshears, who runs a network of child care centers in southeastern Virginia, said families on the subsidy pay at rates so far below her other customers — about two-thirds — that she has to do fund-raising to help make up the difference.
"I’m subsidizing my subsidized clients," she said. The gap created a shortfall over the past year of about $272,000 — or about 14 percent of her child care budget.
Parents in income brackets that are a little higher pay more as a result. Monica Jackson, a bakery worker and a pharmacy technician in Norfolk, Va., was told that she and her husband, an Army reservist who is looking for work, did not qualify for the subsidy because their income, around $20,000, is too high, a ruling she is disputing. They cannot afford child care, which Jackson said cost $1,400 a month, more than their rent.
"What do you tell people who call you for an interview?" she asked. " ‘I’m bringing my 3-year-old and 11-month-old?’ "
Those who have the subsidy live in fear of losing it. Lori Lebo, a customer service worker for an electricity company in Pennsylvania, said she had to ask her new boyfriend and her 8-year-old son to watch her baby girl, who was at home screaming with a fever, because she had received too many warnings at work about taking time off to care for her.
"If we get removed, it will be back on the waiting list for both kids," she worried. "That will be havoc for a new job."