WV Budget Crunch Complicates Child Care Funding
West Virginia officials face a tough challenge as they seek new ways to fund child care assistance for low-income families: an estimated $400 million gap between projected revenues and spending for the next budget year.
The state is scheduled on Jan. 1 to restrict eligibility for the aid, meant to help parents afford care outside the home. But Governor Earl Ray Tomblin asked these parents as well as care providers and child advocates last week to help the state avoid that step. He also dropped plans to freeze enrollment to the program starting Wednesday, though parents will still see an increase in their share of child care costs.
“The governor wants to bring to the table those who deal with this program on a daily basis,” said his chief of staff, Rob Alsop. “It’s always better to have people around the table than to move in isolation.”
Tomblin’s announcement prompted the program’s supporters to cancel a rally that they believed would draw hundreds to the state Capitol. The planned protest was part of an outcry to the slated program cuts among parents, day care operators and such advocacy groups as West Virginia KIDS COUNT and the West Virginia Association for Young Children.
“It’s very encouraging. It doesn’t happen very often,” Margie Hale, executive director of KIDS COUNT, said of the administration’s turnaround. “There are people from all across the state who are responsible for this, not just KIDS COUNT.”
But within the next week or so, Tomblin is also expected to tell executive branch agencies what they must do to close the funding gap projected for the next state budget.
Avoiding that deficit threat could require across-the-board cuts, or cuts targeting specific programs. The anticipated guidance from Tomblin will shape the spending proposals that state government agencies must submit by September 01 for the 2013-2014 budget year.
“We always knew the (fiscal year 2014) budget was going to be difficult,” said Alsop, a former Department of Revenue secretary. “We’re looking at what we’re going to ask our agencies to do.”
Another welfare-type program, Medicaid, accounts for the bulk of that funding gap, according to the state’s multi-year budget projections. It’s outstripping post-recession growth in the state’s general tax revenues.
Although West Virginia just ended its previous budget year June 30 with a general revenue surplus of around $90 million, most of that money is already pledged to Medicaid needs and the state’s emergency reserves.
But the state also reaped an unanticipated surplus of around $81 million from lottery proceeds during that just-concluded budget year.
“I don’t think we’ve closed the door to finding other money for this,” Alsop said of the child care aid program. “But in fairness for everyone, we said that this may have to happen come January 01.”
Hale believes West Virginia can find the estimated $15 million to $16 million annually to keep the program intact — if its leaders view it as important enough.
“That’s absolutely what we need to decide as a state: where are our priorities,” said Hale, a former state health official. “It’s a terrible dilemma for a state, but we need to do it.”
The Jan. 1 cut would exclude families with household incomes at 150 percent of the poverty line, around $34,575 for a family of four, or higher.
Unspent amounts from West Virginia’s yearly allotment of federal Temporary Assistance for Needy Families funding has allowed the state to offer child care subsidies to families at up to 185 percent, or $42,643 for a family of four. But that excess funding has been exhausted, state officials said.
Hale said the higher ceiling has made a crucial difference for the working poor.
“People get raises and they don’t want to take them because they’ll lose their child care,” Hale said. Recognizing that, the state raised the threshold to 185 percent, she said.
The program helped provide day care for more than 24,000 children during the 2010-2011 budget year, at a cost of $54 million, according to the Department of Health and Human Resources, which runs it. Department officials estimate that tightening access to the program will cut off aid for 1,425 children.
That would leave their parents with hard choices, Hale said.
“They can quit their jobs, they can find inferior care, they can even leave their child at home,” Hale said. “Most people won’t leave their children at home, but they’re desperate. They’re low-income.”
Critics of Tomblin’s handling of the program include Bill Maloney, his Republican opponent in this year’s election for governor. But Hale does not agree.
“This was not the governor’s plan,” Hale said. “This was foisted upon him by DHHR, so he had to deal with that and I don’t think anybody realized how much blowback there would be.”