Who Cares for America's Children? (1990) / Chapter Skim
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7 Child Care Policies and Programs
7 Child Care Policies and Programs
Pages 194-226
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From page 194... ...
level. As shown in Table 7-1, subsidies for parental child care expenditures, provided through the personal income tax system (e.g., the child care tax credit)
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From page 195... ...
In addition to these so-called tax expenditures, governments at all levels spend money on child care by subsidizing providers who deliver these services, by supporting programs such as Head Start and preschool education, and by supporting the development of a child care infrastructure, including staff training and resource and referral networks. The amount allocated to these activities is more difficult to estimate, but probably currently amounts to almost $2.6 billion at the federal level and at least another $1 billion at the state and local levels (see Able 7-1~.
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From page 196... ...
1980 Consumer Subsidiesa Dependent care tax credit$3,920$ 956 Dependent care assistance plan65 AFDC disregard4460 Food Stamp disregard5036 Housing disregard18 Support for education661 Total$4,163$1,053 Provider Subsidies Social services block grantb$ 591$ 600 Child Care Food Program (including Special Milk Program) 584216 Head Start1,200736 Special education and rehabilitative programs21939 Work-welfare programs19 School-age programs3 Provider tax incentives3 Total$2,619$1,591 Infrastructure Subsidies Human Services Reauthorization Act resource and referral$2 Child Development Associates Program1 Total$3 Total$6,785$2,644 NOTE: Data on federal subsidies for child care are imprecise.
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From page 197... ...
. These initiatives include an array of targeted activities and subsidies, including Head Start, the provision of food to children from low-income families who are cared for in approved settings, and tax credits to assist employed parents offset a portion of the costs of child care as work-related expenses.
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From page 198... ...
City and county governments are often designated as the agencies responsible for implementing these child care programs and policies. Responsibilities for child care at state and local levels fall within the jurisdiction of several departments and public agencies, adding to the complexity of the system.
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From page 199... ...
Large chains tend to target their programs to meet the needs of middle- and upper middle-income, two-earner families; thousands of "mom-and-pop" operations reach lower income families. Merrill Lynch estimates that publicly held for-profit child care corporations account for about 5 percent of center care providers and places (unpublished 1988 market data on publicly held corporations that provide child care services)
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From page 200... ...
The primary child care support programs include on-site child care centers, benefit plans such as flexible spending accounts, financial assistance for purchasing child care services in the market, resource and referral programs, tremble schedules, and parental leaves. The most rapidly growing form of employer support is dependentcare assistance programs, in which employers establish benefit plans that allow employees to reduce their taxable income by using a fixed portion (up to $5,000)
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From page 201... ...
The largest of these are the federal tax subsidies provided through the dependent care tax credit (DCTC) and employer-based dependent care assistance plans (DCAPs)
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From page 202... ...
In 1988 the estimated total claimed was $3.9 billion. Currently, 29 states that tax income also provide dependent care tax credits or deductions, and only 6 of these states limit eligibility for the credit or deduction on the basis of income.
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From page 203... ...
Dependent care can be offered as an optional nontaxable benefit if the plan meets IRS requirements. Flexible spending accounts (FSAs)
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From page 204... ...
Voucher Programs: Employer and Public As discussed in Chapter 6, voucher programs are designed to expanded parental choice, but with more constraints than tax credits or flexible spending accounts. Private employers as well as public agencies offer vouchers, although they are not widely available in either sector; there are no data on the costs of the subsidy.
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From page 205... ...
Instead of purchasing spaces, the voucher program gives parents a coupon that can be redeemed by any child care service that meets legal requirements, including family day care. The provider is then reimbursed for the value of the coupon.
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From page 206... ...
This is part of a larger strategy to train economically disadvantaged and dislocated workers and to use federal funds to subsidize child care services to enable such workers to participate in appropriate programs. The Work Incentive Program (WIN)
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From page 207... ...
Parental leave is the general term used for a range of policies, primarily maternity leave and infant care leave, that enable parents to take time off from their jobs for pregnancy and childbirth or to care for infants or sick children. Maternity Leave The United States-unlike most other industrialized countries and many developing countries-does not have a national policy encouraging or mandating that working parents be given time off from their jobs (with or without pay, benefits, or job guarantees)
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From page 208... ...
Unions in the public sector have been particularly active to secure infant care leaves for mothers and fathers, whereas very large companies have led the way in establishing maternity and parental leave policies in the private sector. Under at least five recent cases or settlements, fathers have secured the same right to take leave benefits for child care as those offered to mothers (fleck, 1988~.
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From page 209... ...
In the private sector, among those employers who provide parental leave, the average is 2 to 3 months, but this varies from a minimum pregnancy disability leave of a few weeks to up to 1 year of unpaid leave for personal reasons (Bureau of National Affairs, 1983; Catalyst, 1986; Kamerman and Kahn, 1983; Minnesota House of Representatives, 1987; National Federation of Independent Businesses, 1985; U.S. Chamber of Commerce, 1985~.
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From page 210... ...
argues that small businesses in states with parental leave policies had a larger growth rate than in states without leaves: between 1976 and 1986, employment in firms with fewer than 20 employees grew by 32 percent in the seven states with parental leave policies and by 22 percent in the seven states without leave policies. The extent to which a causal relationship exists between state parental leave policies and the growth of small businesses is unknown.
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From page 211... ...
The current personal exemption of $2,000 saves approximately $300 in federal taxes per child for the majority of all families who are in the 15 percent federal tax bracket if their income is sufficiently high to have such taxes to offset; $550 to $600 per child is saved for families in the 28 percent and 33 percent tax brackets. Personal exemptions may also provide some additional tax relief at the state level, but they are of far less significance
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From page 212... ...
However, it is of little or no assistance to families whose income is insufficient for them to incur a significant personal income tax liability. Earned Income Tax Credit In contrast to the personal income tax exemption, the earned income tax credit (EITC)
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In the 1950s, the standard was for women to be at home with young children. However, the Family Support Act, passed in October 1988, reflects the changing trends in women's labor force participation: since the majority of women with young children in the 1980s are now in the paid labor force, the new law requires low-income women with young children to work or to be in an education or training program in order to receive benefits.
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From page 214... ...
States determine eligibility; family day care homes are, in most cases, not eligible for SSBG subsidies. In 1987 more than $2.7 billion was allocated to the states, and 45 states used a portion of their SSBG funds plus some of their own revenues to provide child care assistance (Blank et al., 1987~.
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From page 215... ...
distributes funds to provide nutritious meals to children enrolled in child care centers and family day care homes. Over 1 million economically disadvantaged children were served daily in 1986 (Stephen and Schillmoeller, 1987~.
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substantially more monies are distributed to center-based programs; in other states (e.g., Minnesota and North Dakota) the lion's share of USDA funding is received by family day care homes.
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. Children with Disabilities Federal funds are available to support a variety of child care services for children with disabling conditions: the Education for the Handicapped Act (P.L.
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They provided nursery school classes during the Great Depression (under the Work Programs Administration) and day care centers during World War II (under the Lanham Act)
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The federal government also provides funding to states for the planning, development, establishment, expansion, and improvement of schoolage child care services. Under the Human Services Reauthorization Act, in 1986, a total of $4,785,000 was distributed to states and territories under this act.
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From page 220... ...
In Connecticut, a 50 percent tax credit is offered to businesses that subsidize part or all of their employees' child care costs, and there is a tax credit up to 40 percent of the costs incurred by employers who provide financial or technical support to begin child care services for their employees. Rhode Island provides a tax credit of up to 30 percent for employers who provide property, in lieu of cash, for child care (Virginia Department for Children, 1988~.
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From page 221... ...
program. Scholarships are available to CDA candidates who are employed in family day care homes or privately and publicly funded child care centers and have incomes below the poverty line (Whitebook et al., 1986~.
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98-558) , the federal government provided grant funds for the planning, development, establishment, expansion, and improvement of dependent-care resource and referral services and school-age child care services.
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SUMMARY -r ~ The major federal policy response to the dramatically increasing number of young children with employed mothers In recent years has been a substantial increase in consumer subsidies, largely benefiting middle- and upper-income families, in the form of tax expenditures to offset the cost of employment-related paid child care (i.e., the dependent care tax credit and the dependent care assistance plans)
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From page 224... ...
Glantz, and D Calore 1979 Day Care Centers in the US.: A National Profile 197~1977.
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From page 225... ...
Makuen, K 1988 Public servants, private parents: Parental leave policies in the public sector.
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From page 226... ...
Frank, eds., The Parental Leave Crisis: Toward a National Policy. New Haven, Conn.: Yale University Press.
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