Need to Apply $30 Million
In Unspent TANF Funds for
Child Care for the Working Poor

BACKGROUND
by the Mississippi Low-Income Child Care Initiative

Summary

Assistance with child care has been identified as the single most important factor in helping low-income families successfully leave welfare and maintain jobs. Adequate child care is also an important factor in economic development and job growth. Despite these benefits, MS is forfeiting millions of available federal funds for child care.

In addition, DHS has added new barriers for subsidy eligibility that are not part of federal regulations. In so doing, DHS claims that there is no need for additional subsidized child care, when in fact, many families are in dire need of assistance and would be eligible under federal guidelines. MLICCI has conducted a survey of child care workers across the state demonstrating that the need is far greater than DHS asserts.

CCDF and TANF: Multiple Returns on Investment

Low-wage workers with young children need help paying for child care to stay employed. Currently, there are two federal work-support programs designed to help parents successfully leave welfare for work by subsidizing child care costs: CCDF (Child Care and Development Fund) and TANF (Temporary Assistance to Needy Families).    TOP  »

These programs have proven to be excellent investments. Child care assistance is the single most important factor in moving a single working mother toward self-sufficiency. According to the National Women's Law Center, "studies demonstrate that child care assistance can make a real difference in families' ability to work and succeed. An analysis of data from the 1990's shows that single mothers who receive child care assistance are 40% more likely to remain employed after two years than those who do not receive assistance in paying for child care. Former welfare recipients with young children are 82% more likely to be employed after two years if they receive child care assistance.
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The 2003 report, "The Self-Sufficiency Standard for Mississippi," demonstrated that child care subsidies can reduce child care costs for a single mother with two pre-school children from $658 per month to $132 per month.

In addition to benefiting the state's most vulnerable families, investment in affordable child care is an important component of economic development. Child care creates jobs, enables citizens to work, generates tax dollars, and contributes to local economies. According to the MS Economic Council, employers from throughout the state report that reliable child care is essential to recruiting and retaining employees. It reduces employee absenteeism and turnover, and increases worker productivity.   TOP  »

TANF Funds Unspent While Needy Families Wait

Despite documented success, CCDF and TANF are sorely under-funded and only serve a fraction of income-eligible children. To make matters worse, the MS Department of Human Services has opted to leave over $30 million in TANF funds unspent rather than use them to address low-income families' need for child care.

DHS asserts that child care is fully funded, there is now no waiting list for child care certificates, and that unused TANF funds should go elsewhere. However, a survey of child care providers conducted by the Mississippi Low Income Child Care Initiative (MLICCI) tells a very different story. "     TOP  »

MLICCI Survey

In November, 2006, MLICCI sent a survey to 590 child care providers around the state. As of January 31, 2007, there were 122 responses indicating significant waiting lists and a dire need for additional funds for child care certificates.

To the first question on the survey:
"Does your Designated Agent place qualified parents on a waiting list when there are not enough funds to provide
everyone with a certificate?"     TOP  »

106 respondents replied in the affirmative, 11 in the negative.

To the survey's second question:
"How long do parents stay on a waiting list?"     TOP  »

Answers ranged from a few days to a few weeks to a few months to years. Many providers commented on the long waiting lists and bemoaned the fact that parents could not afford child care without assistance.

In fact, the situation is worse than the survey suggests. Disputed waiting list numbers reflect only families who still qualify after DHS added new eligibility requirements, which are not part of federal regulations. DHS' actions dramatically reduced the number of parents who qualify by state-set eligibility requirements (reducing it from more than 10,000 to 200) -- but not the number who qualify by federal regulation and who desperately need child care assistance."     TOP  »

For example, in October 2004, DHS required all single parents applying for child care certificates to also apply for child support through DHS. Some single mothers have opted not to pursue child support due to fear of violence. While others find that informal payment arrangements result in more support from the absent father on a more immediate and regular basis than would be the case if they sought child support through DHS.

DHS purports that this rule change was needed to align TANF and CCDF eligibility requirements. However, DHS ignores the fact that no child support requirement is in place for Head Start or public school kindergarten—two programs involving preschool children. States have discretion to establish CCDF eligibility requirements, and are not required to match TANF requirements. DHS has the authority to immediately reverse this internal rule change.   TOP  »

Finally, the Deficit Reduction Act recently passed by Congress requires states to move 50% of their TANF population into the workforce. Previously, Mississippi was only required to place 20% of TANF recipients into the workforce. Adults receiving TANF assistance are single parents (mostly mothers) with young children. If Mississippi is to meet the new, more stringent federal requirement, parents will need child care to be able to transition into the workforce. Using unspent TANF funds to make more child care available will help Mississippi meet this mandate.

For more information contact Carol Burnett at the Mississippi Low Income Child Care Initiative, 228-669-4827, P. O. Box 204, Biloxi, MS 39533, or by email    TOP  »