high quality

How Can We Best Direct The Flowing River?

January 21, 2015 — Michigan families can be glad that the Governor talked so much last night in his 5th State of the State address about public resources helping individuals, rather than funding programs. Of course, this is what local service providers have been doing for a long time – often under very difficult circumstances – sorting out how to best address the multiple sets of challenges that children, youth and families face. We all know that treating single symptoms doesn’t actually provide opportunity. Service providers have been working in coalition and through collaboration to bring services together in ways that best serve families accessing them, so that the funding stream, eligibility criteria or administration aren’t apparent to the families themselves. But collaboration and coordination take time and resources to do well, and for service providers who have seen many cuts to their programs and often operate on a shoestring budget, they can prove difficult.

Michigan’s Children and others have advocated for years that public programs need to work better together, need to share data with one another, need to make things easier for organizations that know how to impact change in their communities and for the children, youth and families who are trying to move forward. Now, of course, as many people have said over the last 12 hours: the devil is in the details for the Governor’s proposals. It is clearly unnecessary to actually combine state departments or create commissions to make services work better for people, but if it these initiatives move Michigan closer to doing that, it will be a win for the most challenged among us.

Regardless of how things shake out with how public services are administered in Michigan, we will be doing what we can to help decision makers make investment decisions based on the following:

  1. What young people and families are saying about the barriers to their own success, and what they think might assist them.
  2. What research and evidence suggests about initiatives that work for children, youth and families in the most challenged circumstances.
  3. Consistent and sustainable availability of quality services throughout the state, regardless of the private economic or service infrastructure of individual communities.
  4. No gaps in services – making sure that there is seamless coordination across age groups, issue areas and eligibility criteria.

I have to admit that the “river of opportunity” image that the Governor used often in his address carries a connotation for me of a bunch of cool stuff flowing by children, youth and families that they can try to fish out, but not necessarily an intentional strategy to assess individual challenge, provide opportunities and evaluate the effectiveness of interventions.  We will work toward a “river of opportunity” with efficiencies that simplify access to holistic services for children, youth and families.  We will also work toward a river that transfers any costs-savings from those efficiencies to actual, high quality service delivery since we know that services for children, youth and families continues to fall far short of what is actually needed for all families to succeed.

In this Legislative session and beyond, Michigan’s Children continues to challenge the Governor and members of the Legislature to make sure that the budget that will be proposed next month and debated over the next several months includes resources adequate to build effective public programs that result in what we all want: generations of highly educated, skilled, creative children and young adults who will attract jobs, raise healthy families and support strong communities. Join us!

— Michele Corey

Child Care Tax Credits Part 4 – Supporting Michigan Businesses

August 21, 2014 – This is the fourth and final blog in a series about opportunities to improve the quality of Michigan’s child care system through tax credits.  This week, I’m going to blog more in-depth about Louisiana’s tax credits for businesses and what a similar model could do for Michigan.

In Louisiana, businesses are eligible for a tax credit in several ways – one for contributions to Child Care Resource and Referral Agencies, and another specifically for business who support employees’ child care needs.  I’m going to talk a bit more about the business credit that helps employees.  Employers can support their employees’ child care needs in three ways:

  1. By making payments directly to a child care facility for employees’ children;
  2. By purchasing child care slots provided or reserved for employees’ children; or
  3. By constructing, renovating, expanding, or repairing a child care center, purchasing equipment, or maintaining or operating a center.

Businesses can receive a tax credit as a percentage of their child care related investments based on the quality rating of the facility that they are investing in.  Because high quality child care costs are so expensive, shifting some of this financial burden off low-income working families will provide a significant benefit to both employees and employers.  For businesses, this type of tax credit will have significant benefits for them as it relates to their day-to-day operations and ultimate success.  With more women in the workforce than ever before and low-income families reliant on all adults in the household working to make ends meet, the needs of working families must be addressed to ensure that businesses can thrive.  We know that inconsistent child care results in more missed work days by parents, which is particularly problematic for low-income parents who struggle to afford consistent child care.  Offering on-site child care or a child care benefit to a high quality program will ensure that staff have reliable child care that will allow them to be more productive at work.  And, offering a child care benefit will allow businesses to attract and retain quality staff.  Additionally, a tax credit for donations made for infrastructure improvements of already existing child care programs provides an enticing incentive for businesses to invest in those quality improvement efforts.

For families, this business tax credit will increase access to higher quality, reliable child care that supports their children’s learning and development.  High quality child care can ensure that young children are building the foundational base they need to succeed in school, and help school-aged children stay academically engaged and on-track. In short, a business tax credit will lead to more productive employees whose children are in high quality child care settings, which will ensure that businesses thrive today and that the workforce of tomorrow will be prepared for Michigan’s global economy.

If high quality child care is something you, your family or your neighbors struggle to access, please consider talking to candidates running for public office about this issue.

Learn more about opportunities through child are tax credits in our Issues for Michigan’s Children publication.

-Mina Hong

Child Care Tax Credits Part 2 – Supporting Child Care Providers

July 31, 2014 – This is the second in a series of blogs about opportunities to improve the quality of Michigan’s child care system through tax credits.  This week, I’m going to blog more in-depth about Louisiana’s child care tax credits for child care providers and what a similar model could do for Michigan.

In Louisiana, for-profit and non-profit child care centers who serve children in the foster care system or children who participate in the child care subsidy program are eligible for a refundable tax credit.  The credit is based on the average monthly number of children served and the quality rating of the child care center and ranges from $750 per eligible child for a 2-star rated program to $1,500 per child for a 5-star rated program.

Here in Michigan, our Quality Rating and Improvement System known as Great Start to Quality has two levels – the five-star rating for licensed programs and the three-tier rating for unlicensed family, friend and neighbor care.  Michigan could structure its child care credits similar to the Louisiana model for licensed programs.  And, to ensure that families can maintain choice in their child care provider, we could also provide a tax credit for families who choose family, friend, or neighbor care at the second or third tier.  This type of tax credit would incentivize child care providers to increase the quality of their care by allowing providers to target some of the investment from this refundable tax credit towards ongoing quality improvement needs, which we know to be expensive.  Quality improvements costs go towards things like employing credentialed staff, ongoing professional development, maintaining optimal teacher-to-child ratios, etc. – costs that are typically ongoing.  And, this tax credit would incentivize providers to move up the quality rating scale so that they can receive larger credits.

Michigan should also consider aligning the eligibility requirement for this tax credit with our early childhood system already in place – specifically, with eligibility for Michigan’s Great Start Readiness Program.  This way, we can bolster our state’s significant investment in high quality preschool by increasing the quality of other settings that serve those children and others.  Michigan legislators have already identified that children who have factors that place them at-risk – children living in families with low- and moderately low-income, children in foster care, children who are homeless, and children in special education – benefit the most from access to high quality early care and education.  Similarly, a tax credit should go to providers who serve those same populations from birth all the way through age 12.  Aligning the tax credit eligibility with GSRP would incentivize the highest quality child care programs to serve Michigan’s most challenged families to ensure the best possible outcomes for kids.

A note about school-aged care.  School-aged child care (i.e. before- and after-school and summer care) currently isn’t included in Great Start to Quality, but efforts to infuse those programs into the system are underway.  Any child care tax credit system must include those programs so that school-aged children could also benefit from high quality child care settings that keep them academically on-track and engaged in their education.

If high quality child care is something you, your family or your neighbors struggle to afford, please consider talking to candidates running for public office about this issue.

Learn more about opportunities through child care tax credits in our Issues for Michigan’s Children publication.

-Mina Hong

Child Care Tax Credits Part 1 – Supporting Michigan’s Working Families

July 24, 2014 — Last week, I blogged about the concept of tax credits to support the quality of Michigan’s child care system.  The next series of child care tax credit blogs that I’ll write will break down each of Louisiana’s four tax credits so that we can better understand how their model if replicated in Michigan could assist families, child care providers, child care teachers and directors, and businesses here in our own state.  First, I’ll focus on direct assistance for families.

As I laid out last week, the family child care tax credit allows families to receive a refundable credit for children enrolled in a child care program that has a rating of at least two out of five stars in the state’s Quality Rating and Improvement System.  This credit increases in value as families access higher-rated child care programs, and is dependent on the number of children in the family in a two-star rated program or higher.  Being refundable allows the lowest-income families – those making $25,000 a year or less in Louisiana – to receive a check in the mail for the amount of their credit.  Families making more than $25,000 can apply their credit to their tax liability.

Here in Michigan, we know that child care costs vary significantly with multiple factors influencing cost including the age of the child, the type of care (i.e. a child care center, family-run group home, or someone caring for a family member), and the quality of care.  For Michigan’s Children, ensuring that children have access to high quality child care is paramount – regardless of the child’s age or whether they are in a child care center or being watched by grandma.  We know that high quality child care is more costly for multiple factors including the ongoing training needed by child care teachers and directors, curricula that may be used, personnel costs as it relates to staffing with appropriate credentials or exceeding minimum licensing requirements as it relates to teacher-child ratios, appropriately engaging and partnering with parents and communities, etc.

A child care tax credit for families will reduce some of the financial burden associated with accessing higher quality care, and may be just the incentive that parents need to opt for higher quality care that will better support their children’s learning and development.  While there is a federal tax credit in place for child care that is not refundable, the State of Michigan currently provides no tax relief to families who need child care, so a model similar to Louisiana’s would be welcomed.

If high quality child care is something you, your family or your neighbors struggle to afford, please consider talking to candidates running for public office about this issue.

Learn more about opportunities through child care tax credits in our Issues for Michigan’s Children publication.

-Mina Hong

Michigan’s Child Care System Continues to Struggle

Today, the National Women’s Law Center released its annual state-by-state report on the status of child care. This year’s report, Pivot Point: State Child Care Assistance Policies 2013, examines five critical factors that determine the affordability, accessibility, and quality of assistance in each state: income eligibility, waiting lists for assistance, co-payments required of parents receiving assistance, reimbursement rates for child care providers, and eligibility for parents searching for a job. What the report shows us is that Michigan continues to fall behind other states in these critical areas and must make policy changes to bolster its child care system to truly embed it within our P-20 education system. Here are a few critical pieces of the report.

One area where Michigan has gotten progressively worse is in the area of eligibility. The original intent of the child care subsidy is to support low-income working parents who struggle to afford child care while maintaining their employment. Between 2012 and 2013, nearly half of the states increased their income eligibility limits to keep pace with or exceed inflation; and forty-six states increased their income eligibility limits as a dollar amount between 2001 and 2013. However, Michigan did none of these.  Between 2012 and 2013, our state did not adjust its income eligibility limits for families to access the child care subsidy, maintaining eligibility at an annual income of $23,380 for a family of three. Since no adjustments were made for inflation, this means that families now living at 122% of the federal poverty level (FPL) could access the subsidy. Moreover in 2001, Michigan allowed families of three making $26,064 annually (178% FPL) to access the subsidy. In essence, Michigan has shifted its eligibility such that working families need to be poorer to access this critical support.

Beyond the fact that the subsidy is supposed to help parents maintain family-supporting employment, the reimbursement rates in Michigan make it extremely challenging for parents to afford quality care. Federal regulations recommend that rates be set at the 75th percentile of current market rates – a rate that is designed to allow families access to 75 percent of the providers in their communities. However, Michigan does not come close to meeting this recommendation. In fact, for a four-year-old in center-based child care, a family can receive up to $433 in subsidy per month, though the 75th percentile averages $974 per month. For a one-year-old in center-based care, families can receive up to $650 in subsidy though the 75th percentile of the market rate is $1,000 per month. Clearly, the reimbursement provided is insufficient to ensure families can access high quality care, and families can be charged co-pays to make-up the difference between the true cost of care and the subsidy amount. This is a significant financial stretch for Michigan’s poorest working families who are served by the child care subsidy system.

Beyond the low reimbursement rate, Michigan is one of three states that provides child care subsidies on an hourly basis that’s dependent on a child’s attendance. Most other states provide child care subsidies on a daily, weekly, or monthly rate, which we know is aligned with what high quality child care programs need and charge private-paying families. This consistency in payment, that’s not dependent on attendance, is critical for programs to maintain their business model to provide high quality care and is the way that the child care market operates. Providing an hourly reimbursement makes it challenging for providers to anticipate continued revenue from subsidized families, making it difficult for providers to support quality improvement efforts – efforts that are critical to ensure the best outcomes for children.

Finally, Michigan fails to promote continuity of care, which we know to be critical to the healthy development and learning of young children. Michigan is one of only five states that does not allow families to maintain their child care assistance while looking for a job if they become unemployed while receiving the subsidy. We know this to be problematic not only because families need to be able to access child care to attend job interviews but it also allows parents to start working sooner if they already have child care available when they secure a new job. For children, having consistent care from a high quality provider ensures the best outcomes for their learning and development.

Michigan has a long way to go towards ensuring a robust child care subsidy system that truly supports working parents while promoting the learning and developmental needs of our most challenged children. Other states have shifted their child care subsidy systems to promote school readiness for young children through high quality early childhood settings, promote school success for school-aged children through high quality after-school programming, and support low-income working families to access these quality programs. As a state, we must ask ourselves what is our ultimate vision for children and families served by our child care subsidy system and how can we transform our policies and procedures to achieve that?

-Mina Hong

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