Child Care Bureau releases new child care subsidy data

This month, the Child Care Bureau released Report to Congress for FY 2004 and 2005. The report provides the latest information about Child Care and Development Block Grant (CCDBG) expenditures and participation in those years as well as additional information about training and technical assistance, and child care-related research. The report contains administrative data that has not previously been released in other data tables. Highlights of the data include the following:

• Child care spending is historically high but has declined in recent years. Child care spending from all sources (including CCDBG, TANF, and SSBG-related funds) totaled $12.1 billion in 2004 and fell to $11.96 billion in 2005. According to the previous Report to Congress, spending reached a high of $12.2 billion in FY 2003. The decline between 2004 and 2005 was the result of decreased TANF-funds used for child care.
• A total of 2.35 million children received child care assistance through all funding sources in 2004 and 2005. Approximately 1.75 million children were served in CCDBG in an average month in 2005. The U.S. Department of Health and Human Services estimates that an additional 600,000 children were served through TANF and SSBG-related funds.
• The number of children receiving child care from all sources is declining over time. The number of children served has fallen from a high of 2.45 million children served in 2000. In 2002 and 2003, approximately 2.44 million and 2.36 million children respectively received child care assistance in an average month.
• CCDBG serves very low-income families. In 2005, the median monthly income of families receiving CCDBG-funded assistance was $1,283 or $15,396 when annualized. This is slightly higher than in previous years. Nearly half (49%) of all families receiving CCDBG-funded assistance had incomes below the federal poverty level (which was $16,090 for a family of three in 2005). Thirteen percent had incomes above 150 percent of poverty, or $24,135 in 2005.
• States serve families well below the maximum eligibility level set by federal law. Nearly all (45) states set eligibility for CCDBG-funded assistance below 85 percent of State Median Income (SMI), the maximum level established by federal law. Eligibility levels in states range from 28 to 85 percent of SMI. On average, states report income eligibility to equal 59 percent of SMI, which is lower than the 62 percent of SMI reported in FY 2002-2003.

In addition to expenditure and participation data, the Report to Congress includes an overview of research activities supported by the Child Care Bureau in 2004 and 2005 and emerging findings from on-going research related to the effect of child care subsidies on positive employment outcomes, patterns of child care use, characteristics of families who receive subsidies, and characteristics of the child care workforce.

This report adds to a body of research showing that as federal funds for child care assistance have stagnated, states have reduced the number of children served, cut spending, reduced income eligibility levels, and made additional policy changes that inhibit low-income working families from getting the help they need to go to work to support their children.