A Cold Biloxi

Will the Minnesota Legislature's slashing of childcare assistance for working families force more parents out of the workforce?

Two years ago, Minnesota was the fourth-best state in the nation in terms of affordable childcare, well ahead of, say, Mississippi, which ranked 14th. Today Minnesota ranks a sorry 29th, a drop in the rankings accomplished wholly by the legislature's 2003 decision to slash $86 million in childcare assistance for working families. (Mississippi, meanwhile, has risen to number 12.)

So one might think the news that the state's childcare subsidy fund ended the year several million dollars in the black for the second straight year would be greeted with plans to put as many kids back into preschool as possible. But that's probably not what's going to happen.

Two years ago, a single parent of two earning $43,000 or less had been eligible for a subsidy--hardly a luxury in a state where care for each child can easily run $10,000 a year. Arguing that Minnesota could no longer afford to coddle the middle class, Rep. Fran Bradley (R-Rochester) and other proponents of the cuts drew up new rules sharply curtailing eligibility. A comparable family can now get help only if that single parent earns $26,000 or less. At the same time, the share each low-income family was expected to pay rose by 30 to 100 percent, and the state froze reimbursement rates for daycare centers at 2001 rates.

Although childcare advocates and Capitol DFLers say the Department of Human Services has yet to release the amount of subsidy funding left unspent since the changes, estimates are that there was $4 to $7 million left after fiscal 2003, and $15 million in 2004. Making eligibility less miserly would be childcare advocates' first choice for spending the money, says Jim Koppel, director of the Children's Defense Fund Minnesota. In lieu of that, he says advocates may suggest using the money to put a two-year moratorium on licensing fees (which rose even as assistance was falling) and toward improving the reimbursement process.

Sen. John Hottinger (DFL-St. Peter), chairs the Early Childhood Policy and Budget Division of the Senate Finance Committee, which is scheduled to hear testimony on the issue Thursday, December 16. "We want to try to make sure the money doesn't get used to offset the shortfall," he says. Given the $1.4 billion budget shortfall and Minnesota Republicans' refusal to consider raising taxes, he concedes that's probably an uphill battle.

The likely net result? No one has yet totaled the number of parents forced out of the workforce as a result of the 2003 cuts, but last year, Hennepin County reported that one-third of welfare applicants cited an inability to pay for childcare as the dominant reason they were applying. That's one-third more than in 1999.

 
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