Report: Federal funds provide needed boost for affordable child care in Oklahoma

Contact: Rebecca Fine, rfine@okpolicy.org, 918-794-3944

TULSA, Okla. — A new report from Oklahoma Policy Institute finds that new federal grant funding is making affordable child care a reality for more Oklahomans.

In fiscal year 2019, Oklahoma’s child care subsidy program operated by the Oklahoma Department of Human Services (OKDHS) received a $32 million increase in federal funding, which represents a 36 percent increase from the previous year. With Oklahoma continuing its state commitment to the subsidy program, OKDHS was able to significantly improve provider rates, invest in training for providers, and reduce costs and expand eligibility for Oklahoma families.

“This was a much needed boost for a program that has been struggling with low provider rates and sagging enrollment in recent years,” said OK Policy’s education policy analyst Rebecca Fine, who authored the report. “Access to affordable child care is one of the toughest obstacles that gets in the way of Oklahoma families finding economic opportunity and financial security, so we’re pleased to see the major progress being made using these federal funds.”

As of March 2019, over half of Oklahoma’s licensed child care providers (1,704 of 3,082) had a subsidy contract with the state. The new funding was used to bring reimbursements much closer to market rates.

“Prior to the infusion of new federal dollars, market rate surveys showed that provider reimbursement rates were only 30 to 50 percent of market rates,” Fine said.

OKDHS also increased the child care subsidy eligibility threshold for families to 85 percent of the state median income, or $42,000, regardless of family size. Families at or below the federal poverty line will now owe zero copayments, and the copayment structure was reformed to significantly lower costs for families with more than one child in care.

“With these changes, a parent with two kids in child care could save $135 per month, enough to buy 40 gallons of milk or a two-month supply of diapers,” Fine said.

While the funding increase allowed DHS to increase provider rates for children aged zero to three at two- and three-star facilities to 65 percent of the market rate, additional funding would allow rate increases to the federally recommended 75 percent of the market rate. Further rate increases could encourage more providers to participate in the program and address the shortage of licensed care facilities throughout the state, especially in rural areas. Increasing provider reimbursement rates could also help address low wages for child care workers, who often find it difficult to provide for their own families.

A House Appropriations subcommittee-approved fiscal year 2020 funding bill would further increase CCDBG funding by $2.4 billion nationwide to expand access and quality standards in the child care subsidy programs, which creates an opportunity for Oklahoma to continue the improvements made with the 2019 increase while further addressing unmet needs.

“Oklahoma has more work to do to become a state where affordable, high quality child care is available for all families who need it,” Fine said. “The progress thanks to these new federal funds is encouraging. We are hopeful that the federal government will approve an additional funding increase for fiscal year 2020 so that we can build on that progress, and all parents who need to work can keep their kids in a safe, enriching environment without sacrificing the family’s financial stability.”

The full report is available at https://okpolicy.org.

About Oklahoma Policy Institute

OK Policy advances equitable and fiscally responsible policies that expand opportunity for all Oklahomans through non-partisan research, analysis, and advocacy. For more information, visit www.okpolicy.org.

ABOUT THE AUTHOR

Oklahoma Policy Institute (OK Policy) is a non-partisan independent policy think-tank. OK Policy promotes adequate, fair, and fiscally responsible funding of public services and expanded opportunity for all Oklahomans by providing timely and credible information, analysis, and ideas.

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