A loophole in the federal stimulus law will allow the state to avoid Sunday’s planned cut of subsidized care for the parents of 15,000 children.
A loophole in the federal stimulus law will allow the state to avoid Sunday's planned cut of subsidized care for the parents of 15,000 children.
It will also allow the state to continue accepting new applicants for subsidized child care and avoid putting more than 5,000 other children on a waiting list.
Paul Senseman, press aide to Gov. Jan Brewer, said she has found a way to get more than $50 million for child care from Washington for this budget year and next despite the Department of Economic Security cutting $24 million in funding for the program. The key is timing.
That $787 billion federal package includes money for states to help working parents pay the cost of having someone care for their children. But that law contains a "maintenance of effort" provision, specifically forbidding states from cutting what they are spending now and replacing that with federal dollars.
The revised state budget signed into law Jan. 31 directed the state Department of Economic Security to cut close to $100 million out of its budget. DES Director Linda Blessing, in turn, trimmed $24 million from the state's child care funding.
That program provides subsidized care for families earning less than 165 percent of the federal poverty level, which translates to $36,382 for a family of four. Blessing decided to stop providing subsidies to families above 110 percent of the federal poverty level, or $24,255, as of this Sunday.
Blessing had also said the state would not accept any new applicants for subsidized child care, a move that would result in a waiting list of more than 5,000 by June 30.
Since then, state officials took a closer look at the federal law.
Richard Stavneak, staff director of the Joint Legislative Budget Committee, said that law specifically does prohibit supplanting state dollars with federal dollars. But he said Congress never defined exactly what that means.
More to the point, Stavneak pointed out that President Barack Obama did not sign the stimulus package into law until Feb. 17, more than two weeks after the revised state budget was adopted. What that means, he said, is that Arizona, in fact, is not cutting its state dollars for child care specifically to replace them with federal dollars - and Arizona is eligible for federal dollars without restoring the state funds.
Wednesday's news comes just a day after the Arizona Early Childhood Development and Health Board voted to use $23.3 million of the funds it has from a 2006 tobacco tax hike approved by voters to help subsidize child care.
Nadine Basha, who chairs the board, better known as First Things First, said the fund was set up to promote early childhood development, not to pay for direct care. That, she said, is a function of government.
But Basha said board members were concerned about the plan to cut the subsidies beginning Sunday. Basha said she does not know whether the board will reverse its decision if the federal funds actually materialize.
Bruce Liggett, executive director of the Arizona Child Care Association, called Wednesday's announcement "great news." He said those cuts mainly would have hit working single parents who, without the state subsidy, could not afford the child care. Liggett, whose organization represents both nonprofit and for-profit child care centers, said that would have resulted in some parents losing their jobs and becoming eligible for welfare.