Ga. day care quality could benefit from change in subsidy

A federal subsidy that helps poor Georgians afford child care has shifted to the control of the Georgia Department of Early Care and Learning. State officials say that will enable the agency to offer day cares more incentives to improve quality.

In January, Georgia launched a quality improvement program, called Quality Rated, to recognize and reward day cares that meet higher standards. In states with successful quality improvement systems such as North Carolina and Oklahoma, these rating programs offer higher quality day cares a higher reimbursement rate for each low-income child served.

Until now, Georgia could not do the same thing because most of the $225 million in Childcare and Parent Services funding, including $54 million in matching state funds, was controlled by the state Department of Human Services.

About 70 percent of that must be used for subsidies for day care tuition, said Carol Hartman, assistant commissioner for programs, including Quality Rated and the child care subsidy program.

“The Legislature decided: Let’s put this all in one place to enhance health and safety and quality,” Hartman said. “It will simplify access for families and minimize duplication of services.”

Pat Willis, executive director of the nonprofit Voices for Georgia’s Children, said, “We are delighted. ... We have wanted this for a long time because we feel that DECAL, with its access and commitment to training and quality, can really leverage these federal subsidy resources to help providers improve the quality of services they provide for kids.”

Tony Foskey, vice president of the Warner Robins-based Children’s Friend chain of day cares, said “Hopefully they’ll weed out folks who shouldn’t be getting the subsidy and give it to those who do better for kids.”

A quarter of Georgia children under age 5 receive some kind of subsidized child care, according to a 2010 report by the Georgia Budget & Policy Institute.

Hartman said that in July 2013 the state plans to begin using the federal money to offer increased reimbursements to higher-performing day cares. The state is estimating that the tiered reimbursements will cost $6.7 million for fiscal 2013 and $9.4 million for fiscal 2014, according to an e-mail from Reg Griffin, chief communications officer for DECAL.

Hartman said the amount will likely increase to about $18 million once the program is up to speed.

Those day cares and Georgia prekindergarten providers that are eligible for higher reimbursements will be identified by enrolling in the state’s Quality Rated program, which will offer one to three stars for day cares exceeding state licensing standards. A higher number of stars is earned by having more highly trained staff, more adults supervising fewer children, and a program that emphasizes learning, among other measures. The higher the ranking, the higher the reimbursement will be.

Day cares can still operate without a ranking.

The state is not revealing the rankings of participating day cares the first year to give them time to get used to the system and make improvements. DECAL set a goal of enrolling 700 day cares by the end of 2012, but 647 have already enrolled. About 75 percent of those are day care centers, with most of the rest being family home day cares.

Midstate day cares participating

Day cares in 109 counties have enrolled, including 10 in Bibb and seven in Houston, according to Hartman and Griffin.

The state will not cap enrollment at 700, Hartman said. “We don’t want to turn any away,” she said, adding that some day care chains have enrolled all their locations.

Foskey now intends to discuss enrolling half a dozen Children’s Friend centers in Quality Rated because DECAL’s new control of the subsidy makes the tiered reimbursement plan more reliable.

Hartman said the state has hired additional staff and increased its 2012 contract with local day care resource and referral agencies to provide more support to day cares enrolling in Quality Rated. Incentives can include free equipment and training -- and bonuses.

Those incentive packages, which are estimated to run $3.9 million in fiscal 2012 and $4.2 million during each of the following two years, are to be paid with private donations such as a $2.4 million grant from the Whitehead Foundation. DECAL Commissioner Bobby Cagle has set a personal goal of raising $10 million from the business and foundation communities over the next three years.

But Hartman noted, “Sustainability is critical, and we can’t necessarily rely on the business communities or foundations to support this forever.”

Foskey remains concerned about the rest of the funding needed to sustain Quality Rated, especially after watching the state reduce its funding support for Georgia pre-K, also supervised by DECAL.

“I’m scared the money is not going to last,” said Foskey, whose chain includes 17 Middle Georgia locations, including eight in Bibb County.

Although a sustainable source of funding for the bonuses has not been identified, Hartman said Gov. Nathan Deal and the Legislature have been supportive. DECAL is redirecting some money within its own budget and restructuring to focus on Quality Rated.

DECAL has no plans to change the base rate paid for each low-income child, Hartman said. The rate has remained the same since 2006.

The federal government recommends that the rate be high enough that families who rely on the subsidy can afford 75 percent of day cares in their area.

But Georgia’s reimbursement rate would have given them the pick of only half the local day cares, even in 2005.

A 2011 market study conducted by Georgia universities shows families with subsidies can afford only about 25 percent of local day cares, said Carolyn Salvador, executive director of the Georgia Child Care Association.

This gap between the subsidy and the cost of care has driven poor children into lower-quality care and makes it difficult for many day cares to survive, Salvador said.

Hartman said the state must choose between increasing the reimbursement and serving more children. About 50,000 Georgia children now receive the subsidy.

Asked how Georgia could afford to offer tiered reimbursements without reducing the number of children served, Hartman said, “It’s definitely a delicate balance.” It will partly depend on how many day cares achieve higher rankings and the ages of the children they serve, she said.

Hartman noted that Oklahoma and North Carolina have decided to provide subsidies only to day cares that go beyond the basic licensing standards.

But Salvador, whose organization supports the Quality Rated program and has advocated for tiered reimbursement, said the base subsidy is a separate issue.

Her association is lobbying legislators to use federal Temporary Assistance for Needy Families money to increase the day care subsidy. Georgia used to transfer $30 million of the $330 million it received through TANF for day care, but replaced that with federal stimulus money when it was available. When the stimulus ended, the money wasn’t replaced, she said.

To contact writer S. Heather Duncan, call 744-4225.