Doug Ducey and his Republican legislative cronies had $56 million in federal money waiting to be spent to help cover the cost of child care and early childhood education for low income families. They refused to spend it.
The state didn't have to put up a penny. All it had to do was add a $56 million line item to its budget, and more low income children would have access to child care services. Ducey and the Republican legislative leaders knew the money was there, they were urged to put it in the budget by child care advocates and by Democrats in the legislature. They just decided not to do it.
When a story in the Sunday Star
brought the unspent $56 million to my attention, I contacted Michelle Crow, Southern Arizona Director of the Children's Action Alliance, for more details. Next I talked to Democratic Rep. Randy Friese, who represents LD-9, my legislative district, to find out why the money didn't make it into the budget. The more I learned, the worse things got.
In March the federal government included $5.2 billion in its budget to increase the quality of child care and early childhood education across the country. Arizona's cut of the funds is $56 million, which is supposed to be added to the $125 million Arizona already receives to subsidize child care and early childhood education for children from low income families.
Right now, there's not enough money to subsidize child care for all the children who need it. As bad or worse, the amount the state allocates per child doesn't cover the child care provider's costs. The state Department of Economic Security's "Reimbursement Rates for Child Care" schedule is based on what the services should cost. The problem is, the reimbursement rates haven't changed since 2000. The state is still using an 18 year old rate schedule created at a time when the minimum wage was $5.15 an hour. Today it's $10.50.
It's actually worse than that. The DES reimbursement is only 75 percent of going rate in 2000. It's no surprise Arizona has among the lowest reimbursement rates in the country.
Child care and early childhood education providers can't possibly cover 2018 expenses at 2000 rates. Even if they wanted to stretch the dollars further by increasing class sizes, like Arizona's K-12 schools have been forced to do in the face of budget cuts, they can't. The minimum adult-to-child ratio for child care is set. You can't just add a few more children when money gets tight.
That means providers are in a bind. They're fine taking children whose parents have the means to pay at a rate that covers the cost of salaries, supplies and overhead, but they lose money every time they take a child from a low income family who pays with a state subsidy.
Arizona has been losing providers of subsidized child care, according to the Star article, because providers can't afford to take low income children at the current rates.
Arizona families lost 788 providers of subsidized child care between January 2016 and July 31, 2018, including 369 centers and group homes ending their state contracts.
If the additional $56 million Arizona received was added to the current child care subsidies, providers would be able to continue serving more low income children. But our "education governor" and the Republican legislative leadership purposely left the money out of the budget.
According to Rep. Randy Friese, he brought up the $56 million during a House Appropriations Committee session. The committee chair, Rep. David Livingston (R, LD-22), told Friese the money wasn't being appropriated. When Friese asked why, he didn't get an answer.
During budget discussions on the House floor, Rep. Pamela Powers Hannley (D, LD-9), offered an amendment to include the $56 million in the budget. It was voted down on party lines.
Fortunately, the money isn't lost. Arizona has three years to spend the $56 million. But children who need child care can't wait until the governor and the legislative majority decide to allocate the money. The children need the services now. Ducey and Republicans in the legislature, all of whom are up for election this year, owe voters an explanation.
Bonus Graphic From DES:
I was sure I'd have to dig through the Department of Economic Security's rules and regulations to find a passage saying the child care reimbursement rates are frozen at 75 percent of child care costs for 2000. I was wrong. There it was, proudly displayed in the header at the top of a 2018 reimbursement rate schedule.