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Lauren Burnley loves her job at Children’s Village in Chinatown tending to some of the 400 children, including many preschoolers, who are enrolled in the bustling day-care center. The job doesn’t come with a huge salary, but it pays the bills.
And one of those bills is what she gives right back to the center for the care of her own child, 8-year-old Julian.
Burnley used to get some assistance through the state’s subsidy program intended to help low- and moderate income families like hers with child care and after-school expenses. But when her salary increased three years ago to $50,000 a year, Burnley ran into a problem: Families with one child that earned more than $40,440 annually no longer qualified for that subsidy. So she lost it.
Now, she pays 18% of her salary for child care, a figure that will rise to 20% in January — nearly three times the maximum the Biden administration says that people should pay for child care.
At one time, Burnley was receiving $177 a month from the subsidy. To add insult to injury, she lost it in the middle of a pay period and had to pay the money back, she said.
Her parents are able to help her make ends meet, but the change still cost her: “I had to end up paying out of pocket. It’s a lot of money being a single parent.”
Gov. Josh Shapiro and the state legislature have touted their addition of $62 million more funds this fiscal year into the subsidy program known as Child Care Works.
With a new state budget process beginning in January, advocates and child care providers are calling on the legislature to do even more to help families afford child care. Some providers want Pennsylvania to adjust the eligibility guidelines for subsidies, allow child care workers to access them regardless of income. The advocacy campaign Start Strong PA, wants to inject $284 million more into the program to address an acute teacher shortage.
Donna Cooper, executive director of the advocacy group Children First, cited data showing that while in July 2019 there were 108,000 children in the state receiving subsidized care, just 90,500 receive it now.
“We can’t say for certain that rising incomes are associated with fewer families receiving the subsidy because there is no way to prove that,” Cooper said, “But it is a reasonable explanation because given the extraordinarily low unemployment rates, we should have more than 90,500.”
The state’s Child Care Works program, funded by the state and federal government, reduces child care costs for families based on income and the number of children who need care.
A spokesperson for the Department of Human Services, which administers Child Care Works, said that Shapiro worked with the General Assembly starting in the 2023-24 fiscal year to extend state support. Most significantly, they increased the eligibility limit for people currently in the child care system from 200% to 300% of poverty.
According to federal guidelines for this year, 200% of poverty translates to $40,440 for a parent with one child and goes up to $105,440 for a family of eight. For a family of two, 300% of poverty amounts to just more than $61,000.
That change “is designed to ease a potential cliff effect of losing assistance as a household’s income increases. … Governor Shapiro understands how critical child care is for our families and Pennsylvania’s economy as a whole,” the DHS statement said.
But advocates and providers say that step doesn’t go far enough because it applies only to those already receiving subsidies. For new applicants, the income cap is still 200% of the poverty level.
Burnley, for instance, lost her subsidy several years ago as her income creeped up beyond the 200% figure, before the limit was raised. Now, she makes too much to reapply, even though her income is well below the 300% of poverty threshold for a family of two.
“It’s very inequitable,” said Mary Graham, the director of Children’s Village, where Burnley has worked for 16 years and where her son has been cared for since he was an infant. As things stand now in Pennsylvania, two families could have the same income and one could be eligible for a subsidy and one not, depending on when they accessed the system.
Under Pennsylvania’s program, parents apply to the subsidy manager, the Early Learning Resource Center and are notified if they are eligible, and for what amount. They then can go to any center that accepts the subsidies, and the money is sent directly to the center. The copay that the parent must give the center is based on their income and generally will range from $5 to $75 a week. There are also work and residency requirements to qualify for the subsidy.
Other states are doing more than Pennsylvania to expand eligibility for child care subsidies.
“In the grand scheme of things, the entry point would be 300% of poverty and people could stay on until they reached 400%,” Cooper said. “That would be ideal. Other states have done that.”
Pennsylvania differs from others on child care subsidies
Currently, Philadelphia providers say, parents have had to weigh whether getting a new job or accepting a raise is actually worth it, because a small change in income could price them out of subsidy eligibility.
Damaris Alvarado-Rodriguez runs Children’s Playhouse, which operates several centers in the city. She said that some of her workers have even told her, “be careful with the raises — I will lose my subsidy. I do have families, even teachers, that we have given them a $1 [an hour] raise, or even 50 cents, and their copays go up.”
Some states waive income guidelines altogether if the person works in child care, said Graham, the Children’s Village director, but Pennsylvania has not yet taken that step.
“People are paying more out of pocket because the public systems aren’t supported well enough for those who can’t afford it,” Cooper said. “If fewer families are eligible for the child care subsidy, the system then is eroding in terms of financial stability. This is dramatically affecting pre-K programs.”
Graham said another complication is that most new state and city revenue is targeted to preschool, not child care. Harrisburg has increased funding for children in Pre-K Counts and put more money into Head Start, which is primarily federally funded. And Philadelphia has made higher investments in PHLPre-K.
But the state has not regularly boosted funding for child care, which covers the 3, 4, and 5-year olds needing care for more than five hours a day, as well as costs for infants, toddlers, and after-school care.
“Reimbursement rates for child care, and funding for child care, has not increased as significantly,” Graham said, which results in higher costs for both the centers and for working parents like Burnley.
“Parents shouldn’t have to pay more than 7% of their wages” for child care, she said, citing the federal recommendation
While the costs of running child care programs are high, workers are simultaneously often paid such low salaries that many can make more money working in fast food or retail companies.
Alvarado-Rodgriguez said the current system is taking its toll on both the families and the providers.
“At the end of the day, our families are struggling,” she said. “They’re struggling in accessing subsidies.”
She and others hope these issues will be addressed in next year’s state budget, for which negotiations will start shortly after the new year.
Mai Micsik, the director of early childhood policy for Children First, said some policymakers have “a mindset that other people’s children are not their problem. That is what’s holding us back from innovative solutions to solve the child care crisis.”
The more children who get quality early care, she said, means “we all benefit.”
Dale Mezzacappa is a senior writer for Chalkbeat Philadelphia, where she covers K-12 schools and early childhood education in Philadelphia. Contact Dale at dmezzacappa@chalkbeat.org.
