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The Child Care and Development Block Grant (CCDBG) is the primary source of support for families who can’t afford quality child care and the major funding source for state child care programs. It provides more than $4.5 billion a year1 to states to provide child care assistance to families. Assistance is in the form of subsidy available to families with children under the age of 13, or with children up to age 19 who have special needs or are receiving protective services. The program is authorized under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193), which is the primary authorizing legislation for the nation’s welfare program, known as TANF (Temporary Assistance for Needy Families). The act, which consolidated most Federal child care funding, allows states to serve families through one integrated system.

The CCDBG provides funding for state programs that assist working families in obtaining child care so they can work or attend education and/or training. States may serve working families with incomes below 85% of state median income, or families receiving TANF who are working, in education and training, or job search and those transitioning from public assistance.

Child Care Works, Pennsylvania’s child care subsidy program, offers two resources for obtaining child care for parents. The Child Care Information Service (CCIS) administers a child care subsidy program for parents of children younger than age 13, who work at least 25 hours per week and meet other eligibility requirements. A family of four may make up to $36,200 and be eligible. In addition, Child Care Allowance is provided through the County Assistance Offices (CAO) to families receiving welfare and engaged in training, job search or work. Both programs operate off of an income-based co-payment system.

Child care is expensive and is often a significant portion of a family’s budget. Considering that one in three families with young children earns less than $25,000 annually, the $4,000 - $10,000 annual cost of full-day child care can be prohibitive2. Pennsylvania families pay an average of $5,465 annually for a four-year-old in full time care. Only one in five eligible children receives child care assistance, which leaves tens of thousands of low-income families without access to quality child care.

In addition to providing financial support to families, the Child Care and Development Block Grant helps states fund programs to improve the quality of child care. National and local studies have documented the poor quality of many child care programs3, and states are required to set aside four percent of their total CCDBG funds for quality improvement measures. In Pennsylvania, these funds support programs such as the T.E.A.C.H. early childhood scholarship program, Keystone stars, Pennsylvania Pathways training system, grants to child care providers and the resource and referral system. Although great strides have been made in developing new programs to improve quality we are meeting only a fraction of the need. Turnover rates among staff exceed 50% for aides and 30% for teachers. National and state studies document the decline in teacher preparation, a key indicator of quality.4 States also use CCDBG funding to expand early learning opportunities by supporting expansion of Head Start services or pre-kindergarten programs for 3 and 4 year olds.

In Fiscal year 02-03 Pennsylvania will spend approximately $447 million on its child care programs. Pennsylvania receives $181 million from the Child Care and Development Block Grant, and spends TANF funds on child care, directly, or by transferring a portion of its TANF block grant dollars into the CCDBG account. The inclusion of TANF dollars still does not provide enough funding for all eligible Pennsylvania families in need of child care assistance.

In 1997 alone, an average of 1.2 million Pennsylvania children had working parents. Under CCDBG, 443,000 children were eligible for subsidy, yet 73,000 actually received the benefit on a monthly basis5. While the number of families served has grown to 96,000, more than 300,000 eligible children are not receiving child care assistance. As of June 2002, there are more than 1,863 children of working families on a waiting list for child care, and the numbers will continue to grow.

Congress is currently debating reauthorization of the welfare law. In May, the U.S. House of Representatives passed H.R. 4737, which included a number of provisions of concern to child care advocates. The bill would:

· Increase the CCDBG by $1 billion over 5 years. The cost of providing financial assistance to all eligible families is estimated at $20 billion over 5 years.

· Increase the work requirement for TANF recipient from 30 hours to 40 hours per week.

· Allow states to circumvent federal program requirements in administering benefit programs such as food stamps, welfare and child care through a superwaiver provision. CCDBG regulations contain important protections for families that help increase access to child care for both TANF recipients and other low-income working families. With the waiver, states could request to eliminate these protections, resulting in children being inadequately cared for in unsafe and unhealthy conditions.

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