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Cuts and child care businesses

Published (2/25/2010)
By Kris Berggren
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Gov. Tim Pawlenty’s proposed cuts to child care programs for low-income families could save the state $11.7 million in fiscal year 2011 and $29.66 million the following biennium.

However, advocates for those families told the House Early Childhood Finance and Policy Division Feb. 18 the cuts would harm children by making licensed child care unaffordable for their parents and cause some providers to close their doors. No action was taken.

Among Pawlenty’s recommendations, according to Department of Human Services Assistant Commissioner Chuck Johnson, are:

• redirection of $5 million in under-spent fiscal year 2009 funding for Basic Sliding Fee child care subsidies to offset the state’s General Fund deficit, which means 470 fewer families would be served through BSF;

• inclusion of Social Security income of family members in eligibility determinations for the Minnesota Family Investment Program, which is estimated to close 500 MFIP cases, shift 4,000 cases from cash and food assistance to food-only and increase child care co-payments for about 800 families;

• a 5 percent reduction in the state appropriation for child care assistance programs, saving $1.9 million in fiscal year 2011 and $8.9 million the following fiscal year, while serving 470 fewer families per fiscal year; and

• a 5 percent reduction to reimbursement rates paid to providers who accept assistance program subsidies for children in their care.

Miranda Oliver, a child care provider and board president of the Minnesota Licensed Family Child Care Association, Inc., said approximately 12,000 family child care businesses in Minnesota care for 187,000 children, or about half of all children cared for in licensed child care in Minnesota. She said child care businesses generate more than $900 million in gross receipts annually, and that assistance program subsidies allow providers to accept children whose parents can’t afford the full cost of care.

“Besides the tax revenue this industry provides Minnesota,” Oliver said, “it is this industry that allows workers in all others the ability to work by providing education and care for their children.”

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