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Low Income Child Care Faces Cuts

Oregon’s diminishing coffers have put many social services at risk, and Employment Related Day Care (ERDC) is no exception. Money has been set aside for the program, but advocates fear it will get lost in the budget fray.

ERDC subsidizes the day care costs of low-income families using a formula that accounts for income and child care costs in a family’s zip code. The income ceiling for a family of four is $40,800 a year.

Stacy Michaelson, a policy associate at Children First for Oregon, says that the average monthly cost of child care for ages 0-6 years can reach $939 in higher-cost metro areas, gobbling up a huge portion of a family’s income. 

Springfield resident Shae Dutchover, a single mother of a 3-year-old, works full-time earning more than minimum wage and is working toward a bachelor’s degree, but she says there’s no way she could afford both child care and rent without ERDC. “I feel really strongly about not wanting to be a part of the system and have the state help me out,” Dutchover says. “I’m trying not to perpetuate that; I’m trying to get out of that — to where I can support myself and pay for my own child care.”

But ERDC is now in an enrollment freeze as it waits for the current families to leave the program.

ERDC was capped at 9,000 families at the end of 2010 in response to a budget shortfall, but Michaelson says that was with the understanding that money would be set aside in an education stability fund and the program would be restored to at least 10,000 families by the end of the current budget cycle. But the money was moved to the general fund and now funding for ERDC is in jeopardy.

Advocates working to save ERDC are asking the Legislature to commit to releasing $6 million from the education stability fund to return the caseload to its goal of 10,000, and they say they’d like to see money that stems from federal grants go toward helping fund the program, which has almost 3,000 families on the waiting list with 100 more added each week.

Kara Waddell, the Oregon Labor Department’s Child Care Division Administrator, told EW via email that there are Child Care Development Funds (CCDF) that can be built into the current biennium, and that their possible uses include “child care subsidies, child care licensing, quality improvement programs, and other child care related expenses.” However, Waddell says there are restrictions of the amounts of CCDF that can be used for each type of expenditure.

Michaelson says that ERDC is also a big factor in the child care industry, which she says is a $25 billion industry in Oregon, and she says the state’s child care providers “by and large are small business owners, and so it’s also about small business owners being able to stay open.”

These factors are part of the reason that new applications for Temporary Assistance to Needy Families (TANF) increased 74 percent after ERDC enrollment was frozen last summer. Michaelson emphasizes that many factors other than child care affected that increase, but “though inductive reasoning one can infer that a lot of those families are going to end up relying on other social safety nets.”

Bobbie Weber, a research associate at OSU’s Family Policy Program, studies the social effects of programs like ERDC. What Weber found when she and her colleagues interviewed more than 500 parents who used ERDC and programs like it nationwide was that it made the difference between families “being able to make it or not.”

Weber says the research shows the subsidy stabilizes employment. “Parents who receive a child care subsidy stay employed longer,” she says. “Also it may mean if that job ends, having access to the subsidy allows them to get another job.”

Without the subsidy program, parents patched together child care in whatever form they could manage — family members, older children, a neighbor the family didn’t know very well — in an unstable network that didn’t benefit the children the way steady providers did, Weber says. “And what often happens is they lose their jobs because it doesn’t hold up.”

Advocates from CCFO suggest that Oregonians who want to save funding for ERDC contact their legislators using the contact information and ERDC information found at http://wkly.ws/16s