A child care subsidy program to help low-income families afford care so they can work or search for work has been frozen in several of Colorado’s largest counties.
Enrollment in the Colorado Child Care Assistance Program, which helps more than 32,000 children attend child care statewide, is now capped in a growing number of counties, including Denver, Arapahoe, Douglas, Broomfield, Pueblo, Weld, El Paso, Larimer, Alamosa, Mesa, Jefferson and Weld counties, leaving families without assistance at a time when child care costs are soaring.
Colorado would need an estimated $70 million in additional funding to maintain the pace of enrollment in the program in the next three years, officials estimated. A supplement to the state budget provided a $10 million increase, not enough to close the gap.
The program works with 2,462 child care providers and is run by 500 county workers throughout the state.
Child care assistance nationwide was bolstered by COVID pandemic relief funds, which allowed states to expand access. Now federal and state funds aren’t keeping pace with recently added mandates that were intended to support child care centers but are exceeding county budgets.
The subsidy program, funded by a mix of federal, state and local dollars, has no money to accept more families in several counties, local authorities said. Weld County, which has 1,516 children enrolled, was the latest to announce a freeze.
“This was not a decision we made lightly,” said Jamie Ulrich, executive director of the Weld County Department of Human Services. “We understand the negative impact this will have on the families and communities we serve, but with a lack of funding, this is something we have to do to continue supporting our enrolled families.”
Statewide costs of the program were expected to grow by at least $20.4 million in three years because of the rising cost of child care and the increase in the program’s reimbursement to child care centers. In addition, a new federal rule scheduled to take place in August will tie child care payments to enrollment — not attendance, as it works now — which will cost an additional $33 million every year for Colorado. It means that the government has to pay child care centers based on the number of children enrolled, not the number of children that show up each day.
Weld County announced last week that it was freezing enrollment in the program. Families typically receive help paying for child care for an average of three years, which means the county has to plan its budget in advance to make sure they can make the payments to child care providers, Ulrich said.
Jefferson County announced its freeze in a short online post Dec. 23, citing “a lack of state and federal funding” and saying the length of the freeze was “currently unknown.”
And Denver County posted a similar notice effective Jan. 1. “This freeze is being enacted as a result of increased program expenses that exceed available funding for the program,” it said, warning that people should take note of their reapplication date or risk losing benefits. El Paso County announced its freeze Nov. 6.
In Weld County, human services staff are prioritizing families who are already enrolled and are eligible for renewal. Those families must submit all required documents on time in order to retain their subsidy and failure to do so could mean they lose their assistance and end up on the freeze list. County leaders are also advocating for change at the federal level that would restore the lost funding.
Several counties have started “freeze lists” for families who want to apply for assistance and want to receive notification when and if the freeze is lifted. At the beginning of this month, there were already 1,924 children on the freeze/waitlist statewide.
The Colorado Department of Early Childhood, which administers the program, said Tuesday that the “fiscal crisis” of the program was the result of unfunded mandates. The state agency supports paying child care providers more money, but doesn’t have the funds to keep pace with enrollment.
“We want to be paying providers the appropriate rate,” program director Sarah Dawson said. “But it comes at a cost.”
The required reimbursement rates for child care centers that have children in the program increased in October, which led to the estimated $20.4 million in additional costs for the state over the next three years. The federal requirements, which were put into Colorado law by the legislature last year, say child care providers must be paid based on a child’s enrollment and not on their attendance.
Before the new requirements, counties had been allowed to use other money, under the Temporary Assistance for Needy Families fund, to deal with funding shortfalls in the child care assistance program. That is no longer an option for many counties.
The child care subsidy is for parents who are working, looking for work, or are attending school or a job-training program.
Child care should not cost more than 7% of a family’s income, according to a measurement set by the U.S. Department of Health and Human Services. By that measure, Colorado prices are way out of whack.
A study by The Bell Policy Center found that in 2022, child care expenses ranged from 13% to 30% of the median household income in Colorado. In the most unaffordable counties, which included Washington, Mineral and Chaffee, families were paying up to 30% of their income on child care. In the most affordable counties, including Phillips, Cheyenne and Yuma, families were paying 8%-9%.
Denver County was the third-most unaffordable county in the state for infant and toddler care, with an average cost of $62 per day, about 20% of the median household income.