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Journal Issue: Financing Child Care Volume 6 Number 2 Summer/Fall 1996

The Financing of Child Care: Current and Emerging Trends
Authors: Louise Stoney Mark H. Greenberg

Endnotes

  1. In a sense, both kindergarten and postkindergarten programs can also be seen as part of a broader system of care and education for children, but the cost and financing of elementary and secondary education are not included in this article. These will be reviewed in a forthcoming issue of The Future of Children.
  2. Casper, L., Hawkins, M., and O'Connell, M. Who's minding the kids? Washington, DC: U.S. Department of Commerce, Bureau of the Census, 1994.
  3. Gerry, M. Financing children's services: Exploring the options. Unpublished research paper prepared for The Finance Project, Washington, DC. 1994.
  4. Prosser, W., and McGroder, S. The supply of and demand for child care: Measurement and analytic issues. In Child care in the 1990s: Trends and consequences. A. Booth, ed. Hillsdale, NJ: Lawrence Erlbaum Associates, 1992.
  5. Hofferth, S., Brayfield, A., Deich, S., and Holcomb, P. National Child Care Survey, 1990. Washington, DC: Urban Institute Press, 1991.
  6. Spar, K. Child care in the 104th Congress: Issues and legislation. Washington, DC: Congressional Research Service, December 22, 1995.
  7. Although tax-based subsidies are in theory a form of child care assistance, most families do not consider these funds when reporting the amount of family income expended for child care and apparently do not view this assistance as a child care subsidy. See note no. 5, Hofferth, Brayfield, Deich, and Holcomb, and the Hofferth article in this journal issue.
  8. Accordingly, the $2.8 billion figure somewhat overstates the share of CDCTC tax expenditures attributable to child care because it also includes dependent care costs for physically or mentally incapacitated dependents or spouses. The same issue applies to the tax expenditures associated with Dependent Care Assistance Plans.
  9. U.S. House of Representatives, Committee on Ways and Means. Overview of entitlement programs: 1994 green book. Washington, DC: U.S. Government Printing Office, 1994.
  10. U.S. Internal Revenue Service. Statistics of income. SOI Bulletin. (1995) 15,2. Washington, DC: U.S. Government Printing Office.
  11. Forman, M. Memorandum on federal funding for child care. Congressional Research Service, Library of Congress. Washington, DC, October 20, 1994.
  12. Arkansas, Delaware, the District of Columbia, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Maine, Minnesota, Nebraska, New Mexico, New York, North Carolina, Ohio, Oregon, Oklahoma, and South Carolina have a tax credit. Idaho, Maryland, Massachusetts, Montana, and Virginia have a child care tax deduction. See Steinschneider, J., Campbell, N., and Williams, V. Making care less taxing: Improving state child and dependent care tax provisions. Washington, DC: National Women's Law Center, 1994.
  13. Robins, P.K. Child care policy and research: An economist's perspective. In The economics of child care. D. Blau, ed. New York: Russell Sage Foundation, 1991.
  14. The 14 states with Employer Tax Credits for child care are Arizona, California, Connecticut, Kansas, Maine, Maryland, Mississippi, Montana, New Mexico, Ohio, Oregon, Pennsylvania, Rhode Island, and South Carolina.
  15. Euben, D., and Reisman, B. Employer tax credits for child care: Asset or liability? New York: Child Care Action Campaign, 1989.
  16. For-profit providers are eligible for CACFP funding if at least 25% of the children in their care receive assistance under the Social Services Block Grant (Title XX).
  17. Federal IDEA funds represent a fraction of all dollars spent to serve young children with disabilities. A 1994 profile of Section 619 services indicates, for example, that 41 states report spending state special education funds for these services, and many others use state early childhood, general education, developmental disabilities, social services, health, and private insurance funds. Federal funds under Head Start, Title I, Medicaid, and Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) are also used in a majority of states. See Heekin, S., and Tollerton, D. Section 619 profile. Chapel Hill, NC: National Early Childhood Technical Assistance System, 1994.
  18. U.S. General Accounting Office. Early childhood programs: Multiple programs and overlapping target groups. Washington, DC: GAO, 1994.
  19. U.S. Department of Health and Human Services. Unpublished data, 1996 (on file with the authors).
  20. Adams, G., and Sandfort, J. First steps, promising futures: State prekindergarten initiatives in the early 1990s. Washington, DC: Children's Defense Fund, 1994.
  21. The 13 states and the District of Columbia that supplement Head Start are included in these data. These states are Alaska, Connecticut, Florida, Hawaii, Illinois, Maine, Massachusetts, Minnesota, New Hampshire, Ohio, Rhode Island, Washington, and Wisconsin.
  22. Adams, G., and Sandfort, J. State investments in child care and early childhood education. Washington, DC: Children's Defense Fund, 1992.
  23. This estimate excludes state appropriations for preschool initiatives, state contributions to Head Start, and the state match required to draw down federal welfare reform funds. Additionally, the survey was conducted before the Child Care and Development Block Grant was implemented and the effects of welfare reform child care initiatives were fully felt.
  24. Gold, S., and Ellwood, D. Spending and revenue for children's programs. Washington, DC: The Finance Project, 1995.
  25. Stoney, L., Keith, H., and Zeller, D. Maximizing funds for early childhood care and education in the District of Columbia. Washington, DC: District of Columbia Department of Human Services, 1994.
  26. New York City Temporary Task Force on Child Care Funding. Final report. January 1996. For a copy of this report, contact Delores Jones, Agency for Child Development, 30 Main Street, Brooklyn, NY 11201, (718) 260-7005.
  27. Additional examples include Seattle, which pools approximately $2.4 million each year in CDBG, JTPA, city general funds, and a special tax levy to support child care, and Austin, which pools CDBG and local funds and spends almost $1.2 million a year. See Urban child care administrators' exchange. New York: National Center for Children in Poverty, July 1994.
  28. See note no. 17, Heekin and Tollerton.
  29. In another example, Seattle used $5 million of a $17 million school tax levy for construction of child care space in 14 new elementary schools. Marx, F. Caring for children: Case studies of local government child care initiatives. Washington, DC: National League of Cities, 1989.
  30. U.S. Department of Education, Office of Policy and Planning. National Study of Before and After School Programs. Washington, DC: DOE, 1993.
  31. As cited in U.S. House of Representatives, Committee on Ways and Means. Overview of entitlement programs: 1992 green book. Washington, DC: U.S. Government Printing Office, 1992.
  32. Lord, M., and King, M. The state reference guide to work-family programs for state employees. New York: Families and Work Institute, 1991.
  33. Although the number of employees and children served by government work site initiatives is limited, these initiatives may have a profound impact in some communities and can serve as an important catalyst for the child care and early education system as a whole. The U.S. Army's system of Child Development Services (CDS) is a case in point. The army has sponsored child care centers and homes, before- and after-school programs, on-site short-term care, and referrals to off-post child care programs. Although these child care programs, located at 171 installations worldwide, are independently operated and charge family fees, the army provides a one dollar match for every one dollar paid by army families that use child care. CDS has also focused on improving the quality of care by implementing a caregiver wage program that provides for competitive pay for staff and by establishing a goal that all CDS child care centers obtain national accreditation by 1996. See U.S. Army, Child Development Services. Information about Child Development Services, undated.
  34. Friedman, D. Planning with business partners to assist low-wage workers: Let's talk about it. Speech presented at the Administration for Children and Families Planning Conference for State Child Care Administrators. Washington, DC. September 27, 1995.
  35. As cited in note no. 31, 1988 Bureau of Labor Statistics.
  36. United Way of America. Fund distribution results by agency, by program, 1994: Metros I-VIII. Alexandria, VA: Research Services, United Way of America, 1995.
  37. The Foundation Grants Index includes only grants of $10,000 or more.
  38. The Marin Education Fund's effort to create a child care scholarship fund for low-income families that live in Marin County, California, is a notable exception.
  39. Lindner, E., Mattis, M., and Rogers, J. When churches mind the children. Ypsilanti, MI: High/Scope Press, 1983.
  40. Kisker, E., Hofferth, S., Phillips, D., and Farquhar, E. A profile of child care settings: Early education and care in 1990. Princeton, NJ: Mathematica Policy Research, Inc., 1991.
  41. Schultz, T., Lopez, E., and Hochberg, M. Early childhood reform in seven communities: Front-line practice, agency management and public policy. Washington, DC: U.S. Department of Education, 1995.
  42. Helburn, S., Culkin, M., Morris, J., et al. Cost, quality, and child outcomes in child care centers: Public report. Denver: Department of Economics, University of Colorado at Denver, 1995.
  43. In this study, the term expended costs referred to cash costs or expenses incurred by a center to operate its programs. The study found that the average forgone wage was $5,238 per year for a child care teacher and $2,582 per year for an assistant teacher. Ninety-three per-cent of the teachers and assistant teachers in this sample were underpaid. See note no. 42, Helburn, Culkin, Morris, et al.
  44. U.S. General Accounting Office. Block grants: Characteristics, experience, and lessons learned. GAO/HEHS-95-74. Washington, DC: GAO, 1995.
  45. Ebb, N. Child care and welfare reform: More painful choices. Washington, DC: Children's Defense Fund, 1995.
  46. HHS Information Memorandum CC-ACF-IM-94-2 (December 2, 1994).
  47. It may be contended that the Earned Income Tax Credit (EITC) provides such workers with a refundable tax credit that could be used to defray child care costs. However, the EITC is available whether or not a family incurs child care expenses and does not vary depending on child care costs.
  48. Advisory Committee on Head Start Quality and Expansion. Creating a 21st century Head Start. Washington, DC: U.S. Department of Health and Human Services, 1993.
  49. Since November 1994, 11 states have submitted federal waiver proposals seeking to implement a time limit in which all cash aid to a family would be cut off after a period shorter than five years. Seven states have sought to implement statewide cash aid time limits of two years or less. See Racing to the bottom? Recent state welfare initiatives present cause for concern. Washington, DC: Center for Law and Social Policy, February 1996.