June 22, 2021

Transforming Child Care Access is Key to a Just Recovery

Even before the pandemic, child care in Florida was on the edge. The high cost for families, varying quality, razor thin margins that child care centers operate upon, and the low average pay for child care teachers had created a perfect storm of factors to hinder employment for parents and quality care for children. As the state emerges from the pandemic-induced recession and health emergency, policymakers need to better understand the status of child care in Florida and the significant policy opportunities that lay before them.

Three Stark Realities that Illustrate Child Care Barriers for Florida Families

1. Outside of the Great Recession, labor participation for women aged 25-54 in Florida is lower than it’s been in 34 years.

The impacts of the COVID-19 economic crisis fell disproportionately on women in Florida. Women, especially women of color, make up an outsized share of the state’s “essential workers,” or those who the state has depended on to keep society running through the pandemic. The employees of sectors hit hardest by the economic slowdown — services and hospitality — are disproportionately female.

This is one reason why Florida’s average unemployment rate in 2020 for women was higher than for men (8.4 percent versus 7.6 percent). The recession has made difficult family decisions even harder, as parents tried to balance virtual schooling, child care closures, and layoffs. Women often find themselves as the primary caregivers for children and other family members, and without accessible options for care, they often make the difficult decision to exit the labor market to care for others. As such, in 2020, the labor participation rate for women aged 25-54 in Florida dropped to its lowest point since 1987 (outside of the Great Recession) (down 1.4 percent from the previous year; see Figure 1). Driving home this fact, the Children’s Movement of Florida’s 2020 Working Parent Survey found that while 48 percent of working fathers had issues with child care that “impacted their ability to participate in the workforce or affected career advancement,” a full 74 percent of working Florida mothers in the state had experienced this. Clearly, child care is a hurdle to economic mobility for many Florida mothers.

2. The cost of child care for a toddler in Florida is 40 percent higher than average State University System tuition and fees.

The ever-growing cost of child care creates an insurmountable barrier for many parents to participate in the workforce. In 2020, the average cost of center-based care for a toddler in Florida was $8,618, which is 31 percent of the median income of a single parent in the state and $2,512 more than average in-state tuition and fees for Florida’s public universities.

Indeed, child care accessibility is one factor that has squeezed many Florida women out of the workforce. The affordability problem links to what many advocates in the early learning arena consider a failed market — if they pay living wages to child care teachers, child care proprietors cannot afford to offer reasonable prices to families without very significant subsidies from the government.

3. Pre-pandemic, less than half of eligible Florida families with low income received School Readiness vouchers to offset the cost of care.

Both the federal and state government support early learning programs financially, and federal COVID-19 relief included substantial temporary increases to these programs. Florida’s School Readiness Program offers financial assistance to families with income below 150 percent of the federal poverty level for child care so parents can work, and their children will be prepared for school. Nearly all funding comes from the federal Child Care and Development Block Grant (CCDBG).

While the need is great, less than half of eligible Florida families with income beneath 150 percent of the federal poverty level received child care vouchers in 2017-2018. In October 2020, 20,709 children were on waiting lists for School Readiness vouchers across the state’s Early Learning Coalitions, down from 31,000 in 2017-2018. However, much of the lack of demand in 2020 was due to the pandemic. Additionally, in 2020 and 2021, the Legislature appropriated $60 million and $72 million (respectively) to reduce waiting lists in the state. The full cost to eliminate the waiting lists in October 2020 would have been $124 million, a very manageable sum. Post-pandemic, the legislature should continue to invest in early learning to eliminate School Readiness wait lists.

Plus, School Readiness vouchers only get parents so far — the true cost of quality child care is higher than what the voucher offers, so parents find themselves paying for the difference (in the range of $240 a month for a family with an infant). This can be a make-or-break amount for a single parent subsisting at the federal poverty level ($21,960 for a family of three).

In addition to School Readiness, Florida offers a universal voluntary pre-Kindergarten program (VPK), passed by constitutional amendment in 2002. The program pays for three hours of educational programming a day for 4- and 5-year-old children, and there is no income eligibility. In fact, 77 percent of eligible four-year-old children in the state attend VPK, one of the highest participation rates in the country. However, similar to School Readiness, many families find themselves struggling to pay for the remainder of each day’s services. Florida’s per-student VPK spending ranks 41st out of the 43 states that offer free VPK. Three hours a day is hardly enough for robust, quality education for children.  

Three Policy Opportunities to Reduce Barriers to Quality, Affordable Child Care

The cost and availability of quality child care remains a significant barrier to entering or reentering the workforce for parents across Florida. Luckily, there are key policies in place for 2021 that lay the groundwork for a child care system that works for everyone thanks to the American Rescue Plan Act (ARPA). Policymakers must now work proactively to follow through on that potential.

1. Make ARPA’s Child Tax Credit expansion permanent and restore the credit to immigrant children who do not have a Social Security number. 

Under ARPA, for 2021 only, the Child Tax Credit (CTC) was increased to $3,000 (and to $3,600 for children aged 5 and younger). It was also made fully refundable, which means that even if a family does not owe income taxes, they receive the full credit. The CTC was also expanded to children in families with no or low earnings and extended to 17-year-old children. This increase will begin to phase out at $112,500 for heads of households and at $150,000 for married couples. Notably, ARPA provides families with advance monthly payments of their CTC for 2021 starting this July, a first, so that families can utilize funds for year-round expenses like child care, food, health care, and shelter. The expanded 2021 CTC will impact 3.8 million children in Florida under 18, and 698,000 of them will be lifted closer to or above the poverty line.

While the reach of ARPA’s CTC expansion is profound, there are children in Florida that the CTC should be reaching but are not — Dreamers. Immigrant children without Social Security numbers, otherwise known as Dreamers, were eligible for receiving the CTC until the federal Tax Cuts and Jobs Act of 2017 carved them out of this critical support. There are 91,400 Floridian Dreamers under the age of 18 who are losing out on ARPA’s CTC expansion, and the state is losing out on $282 million in boosted income to support children because of this. Making the CTC expansion permanent would be a game changer for Florida parents; however, as Congress considers plans regarding the future of the CTC, they should not leave out children just because they lack a Social Security number.

2. Make ARPA’s Child and Dependent Care Tax Credit expansion permanent and raise awareness for newly eligible families.

While the large boost in the CTC has grabbed headlines, the expansion in ARPA of the Child and Dependent Care Tax Credit (CDCTC) also has potential to broadly reduce barriers to quality, affordable child care and improve the lives of families across our state. Like the CTC, the CDCTC was temporarily expanded and made fully refundable for tax year 2021 in ARPA.

The fact that the CDCTC was made refundable means that the credit will now broadly benefit families with low income for the first time ever. Before the expansion in ARPA, the vast majority of families benefiting from the CDCTC had been those with middle- or high-income. Now, many lower income families straining under the weight of burdensome child care costs will be able to claim the credit for the first time. An estimated 28 percent of the CDCTC disbursed for 2021 will go to families making under $34,800 a year, compared to only 12 percent for previous years. Not only should Congress focus on making the improvements to the CDCTC permanent — they should also prompt community leaders to get the word out that nearly all families paying out of pocket for child care should file for this very valuable tax credit for 2021.

3. Seize the moment to deploy Florida’s share of ARPA child care stabilization funds.

Federal COVID-19 relief legislation contained significant funding for child care — $3.3 billion across the three major relief bills for Florida’s child care sector and family assistance. Nearly all these funds are earmarked for either financial support for child care providers or increased funding for School Readiness vouchers and similar family-directed aid. Still, there is plenty of room to drive investments in a way that reflects the priorities of Florida’s early learning community.

The amount of this federal aid is significant— about three times what the state spends on early learning in any given year.

The fiscal year (FY) 2021-22 budget signed by Governor Ron DeSantis includes almost $1.7 billion from these federal funds for the Office of Early Learning (OEL) to deploy in a manner that aligns with federal guidance. OEL must engage with early learning stakeholders across the state to determine the plan they will submit to the Legislature and the Administration for Children and Families for use of these funds. Additionally, there is another nearly $1 billion earmarked for Florida that did not make it into the FY 2021-22 budget and must be obligated by September 2022.

Florida has a once-in-a-lifetime opportunity to use these considerable federal funds to build a child care future that supports working families and broadly provides a quality learning experience for children. OEL and the Legislature, in partnership with early learning stakeholders across the state, should utilize the child care stabilization funds earmarked for Florida to set the stage for an urgently needed transformation in child care.

The Time is Now for Bold Policy Solutions

As Florida begins to emerge from the COVID-19 crisis, the barriers and burdens faced by parents earning low-to-moderate income persist. The need for affordable, quality child care is more pressing than ever. Thankfully, recent federal relief programs offer reasons for optimism due to ARPA’s significant investments in child care quality and infrastructure, and vouchers and tax credits that ease the cost burden for families. Now is the time for OEL and state legislators to be bold and creative in their plans for the billions of dollars coming to Florida’s child care sector, and for Florida’s congressional delegation to act with urgency to ensure that critical expansions to the CTC and CDCTC are made permanent.

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