Child care déjà vu
Here we go again.
As his predecessor did six years ago, Gov. Phil Scott has proposed more money to help low-income families pay for high quality child care. It’s a worthy investment, as it would have been in 2013. But repeating the mistake his predecessor made, Governor Scott wants to pay for his proposal by taking from Peter to pay Paul.
The governor’s budget for fiscal 2020 calls for about $11–13 million in new taxes, including a $7 million increase Vermont could get by changing the way it taxes certain internet sales. But sales taxes, as a result of a major reshuffle the Legislature approved last year, are now dedicated exclusively to the Education Fund. So while raising the additional revenue makes sense, and would help to level the playing field for Vermont retailers, skimming money from the Education Fund shifts costs onto the property tax.
The heads of the Legislature’s two tax-writing committees, Sen. Ann Cummings, D-Washington, and Rep. Janet Ancel, D-Calais, forcefully argued these points on Vermont Public Radio last week.
The governor deserves credit for proposing additional money for the Child Care Financial Assistance Program (CCFAP)—although $7 million is not enough. State assistance for low-income families is below the rates charged by most high-quality child care providers—regulated providers with a 4-STAR or 5-STAR rating. The state subsidy is supposed to be enough to cover the rates charged by at least 75 percent of these providers, but Vermont has repeatedly fallen short of that goal. The latest estimate is that it will cost more than $6 million just to meet the state’s commitment for families currently getting help.
And we know there are many more families that can’t afford high-quality child care, but don’t qualify for enough, or any, support under the existing program. Vermont is going to need to make a substantial investment in child care. And we can’t expect to pay for it by raiding the Education Fund.
Six years ago, Gov. Peter Shumlin wanted to increase child care funding by taking money from the Earned Income Tax Credit (EITC). He was proposing to raise taxes on the lowest income workers to pay for a critically important service.
Governor Scott’s plan doesn’t hit those least able to pay. But he wants to use money that would otherwise lower property taxes. It doesn’t square with his insistence for the last two years that Vermont’s property taxes are too high.
What is the root cause of this financial need?
Not enough providers?
Not enough business in places of need to keep a provider afloat?
A change in the demand, like now more people working but unable to pay for childcare?
Are there trend analyses for this?
Chris,
Thank you for your interest in our blog and your comment.
While Vermont clearly needs more high-quality child care providers, that’s not the source of the financial need. This isn’t a case where competition will bring down the price. In fact, pay for child care workers needs to go up to retain people with the skills required for this critical work.
As we’ve reported, many Vermont children under six live in families where all of the parents work. That creates a big demand for child care. But expecting parents to foot the bill for child care is like asking families to be responsible for paying the full cost of their kids’ education. Vermont currently offers child care subsidies to low-income families, primarily families at or below the poverty level. But with high-quality child care running $8,000 or $10,000 or more per child per year, it is unaffordable for many middle-income families as well. The proposed funding would increase the number of families who would be able to access child care.
That really doesn’t answer my question Sarah, in terms of explaining why the cost is so high in the first place, which I assume is supply and demand, nor how either changed over time to require more state funding.
I’m not being picky, just asking for the basic stats.
And you say that more competition wouldn’t bring the cost down? I wasn’t taught the in school.
Obviously a higher wage for provider staff would increase their numbers, but you don’t tie that to the economics of either supply nor demand.
It’s maddening that a basic, simple explanation like, “There are more people who need chiled care because they have to work more to make ends meet, since their cost of living has gone up and wages stagnated.
Here’s another maddenly incomplete/inconclusive “explanation” of the cause of the problem. https://slate.com/business/2019/02/child-care-day-care-policies-paid-family-maternity-leave-gdp.html
It’s really hard to focus on causes when everyone likes to talk about symptoms.