Frozen child care subsidy thaws, but remains on thin ice

girl in skates sit on ice rink after fallIn welcome news for working families, the Oklahoma Department of Human Services (DHS) announced at the end of June that it would lift the freeze on child care subsidy enrollment by August 1. In any given month, more than 30,000 Oklahoma kids get child care through the subsidy program; it’s a crucial support for these children and working parents. It’s good that the freeze has been thawed – but that a freeze was necessary highlights how Oklahoma’s revenue gaps directly harm working families.

The child care subsidy freeze hit vulnerable families at the worst time

In May, following two mid-year budget cuts, the state’s child care subsidy program ran out of money. In response, the Oklahoma Department of Human Services froze enrollment in the program for most children effective June 1st, just as schools were getting out for summer. DHS made it clear that freezing the subsidy was not a decision they wanted to make, but substantial cuts going into FY 2017 combined with the successive revenue failures left DHS without options. A DHS spokesperson told reporters, “We’re really concerned about the effects this will have. We just simply have no choice.”

Families in some protected groups, like those with foster children and cash assistance recipients participating in approved work programs, could still receive subsidies. However, 4 in 5 children in the subsidy program were not in one of these groups. Most low-income families who weren’t already participating, or who weren’t low-income when the freeze hit, were out of luck.

Even before the freeze, affordable child care had been getting less accessible for Oklahoma families. The number of children receiving the subsidy has declined by one-third over the past decade, in part because the program’s eligibility levels haven’t been adjusted since 2004. The eligibility cutoff for a single mother with one child was $2,426 per month in 2004 – and in 2016, it’s still $2,246 per month, despite three minimum wage increases and a decade of inflation.

Child care is a crucial aspect of economic opportunity and self-sufficiency

Subsidized child care is a common-sense measure for a state that values strong families and work. When small children can attend quality child care, they are more likely to be ready to learn and make the most of their education when they start school. The subsidy also allows very low-income parents to work or go to school, helping them to rise out of poverty. Access to affordable child care increases labor force participation, narrows the gender wage gap, and boosts family earnings over their working lives. Freezing the subsidy jeopardized all of this – as one provider said, “It tells families you can either have children or have a job. Not both.”

This is what balancing the budget on the backs of the poor looks like

The temporarily-frozen subsidy is just one more entry in a long list of ways in which the Legislature’s failure to adequately fund crucial programs harms Oklahoma families. It should be unthinkable that this critical work support could run out of money – but that’s exactly what happened. And the child care subsidy’s future is by no means guaranteed. In a press release, DHS Director Lake said that the program had been able to restart because the freeze allowed DHS to save enough funds to sustain the program through the end of the year – “barring any future or unforeseen reductions to DHS funding.” In other words, another revenue failure could mean another freeze or worse, and that means another costly, last-minute scramble by low-wage families struggling to keep their kids safe while making ends meet.

We’ve written before about how decisions legislators made this spring mean that low-income Oklahomans will have a harder time accessing mental health care and DHS programs like food stamps. These are some of the same parents that some legislators tried to kick off Medicaid. Despite more than 160 religious leaders asking them not to, the Legislature gutted the refundable state Earned Income Tax Credit (EITC), a pro-work, anti-poverty credit with benefits that extend to the next generation. And lawmakers’ refusal to stop tax cuts or raise other revenues to adequately fund core programs like the child care subsidy increases the likelihood that we’ll find ourselves here again.

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Carly Putnam joined OK Policy in 2013. As Policy Director, she supervises policy research and strategy. She previously worked as an OK Policy intern, and she was OK Policy's health care policy analyst through July 2020. She graduated from the University of Tulsa in 2013. As a student, she was a participant in the National Education for Women (N.E.W.) Leadership Institute and interned with Planned Parenthood. Carly is a graduate of the Oklahoma Center for Nonprofits Nonprofit Management Certification; the Oklahoma Developmental Disabilities Council’s Partners in Policymaking; The Mine, a social entrepreneurship fellowship in Tulsa; and Leadership Tulsa Class 62. She currently serves on the boards of Restore Hope Ministries and The Arc of Oklahoma. In her free time, she enjoys reading, cooking, and doing battle with her hundred year-old house.

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