Childcare in Crisis

Betty Skorusa has a lot to worry about. As the director of Montessori Foundations of Chicago, a McKinley Park daycare center, Skorusa depends on payments from the Childcare Assistance Program (CCAP), which subsidizes childcare for low-income families and parents enrolled in school statewide. But on January 29, Skorusa and thousands of other childcare providers across the state received a letter from the Illinois Department of Human Services announcing that, due to a $300 million shortfall in funding for CCAP, providers that serve children on financial assistance will experience payment delays until the end of the fiscal year in June.

Three weeks later, Skorusa still doesn’t know when—or if—the next check will come. “If [CCAP funding] doesn’t go through, it’s going to be very, very difficult because it’s fifty percent of our income,” Skorusa said. “It’s going to be difficult to meet our obligations like rent, like insurance for my staff, like payroll taxes, and payroll in general.”

CCAP funding pays for about half of the seventy children Skorusa serves at her daycare center. And due to that funding, she also receives grant money from Preschool for All and a USDA lunch program—all of which is now in jeopardy.

Maria Whelan, president of the childcare advocacy organization Illinois Action For Children (IAFC), characterizes the situation as “the Titanic going down.” Whelan said, “The entire infrastructure of early care and education in this state is crashing and burning.”

IAFC, which also acts as a referral agency for CCAP in Cook County, works with 50,000 local families who use the program. The typical CCAP family, Whelan said, is composed of a single parent with one or two kids working in one or more low-wage, usually service sector job(s), earning an income that’s only 150 to 160 percent of the poverty level (about $30,000 per year).

Karla Velazquez and her two sons constitute one of these families. Over a year ago, Velazquez decided to send her kids to Montessori Foundations after a long search for a daycare that met the practical needs of her employment, and the educational needs of her children. With the help of a CCAP subsidy each month she could afford to send her sons there, but as of February, she’s paying the full price.

“Without the help that I do get from funding, it’s a lot tighter at home. I’m pretty much just working to pay the bills and pay tuition. There’s zero leeway for anything else,” Velazquez said.

The $300 million hole in the CCAP budget is the result of an underfunding of the program at the start of the fiscal year, with the expectation of bolstered funding down the line. Additionally, structural changes that unexpectedly increased the number of families qualifying for CCAP have only compounded the problem.

Now, the CCAP budget, which used to combine both state money and federal money from the U.S. Department of Health & Human Services’ Child Care Development Fund, is relying wholly on federal money. This provides less than half of the necessary funds. As a consequence, half of Illinois’ CCAP providers will receive their monthly payments late; the other half will be put in the queue for the next month’s payments. The next month, the process will repeat—half of providers will be paid, the other half won’t—so that each month, thousands of providers will be put on a waiting list for payments that may never come.

By June, the result of the funding crisis will be a huge backlog and tough choices for parents and childcare providers.

According to Whelan, families that rely on childcare assistance will either have to find a way to pay the full price or, the more likely decision, take their children out of daycare. This means parents will either have to quit their jobs and drop out of school—or leave their kids alone at home. “That’s not a choice that parents should have to make,” Whelan said.

Right now, Karla Velazquez says her family is staying afloat, though she’s had to cut down on a lot of expenses, including some regular groceries and outings with her kids. But eventually, she’ll have to start looking at other options, dipping into her savings or even taking a second job.

“It’s kind of a catch-22 because I do need to work to provide for [my kids], so I see myself forced to take them there,” she said. “It’s either that or lose my spot.”

Skorusa also argues that losing early childcare not only prevents parents from keeping jobs and going to school, but it also deprives the children themselves of a vital resource. Early and consistent childcare is linked to childhood development and later success in school and work, Skorusa says; taking that away only worsens a family’s situation.

But the impact on low-income parents and children is just the beginning.

Childcare is an industry in itself, with nearly 30,000 childcare providers statewide who use CCAP funds. But most centers are non-profits or small businesses, and, Whelan says, “None of them have a cushion of six months or five months.”

Already, some childcare centers have dropped families on financial assistance, hoping to fill out an entire roster with full-paying clients. Others are trying to stretch things out until the funds return. Some centers are shortening their hours or implementing lay-offs; eventually, some may close entirely. As daycares close, Whelan says, they’ll take with them many of the state’s pre-K and Headstart programs, which are often housed in small locally-owned childcare centers.

“There won’t be a childcare system at the end of the fiscal year,” Whelan predicted. “People will have gone out of business.”

Based on the extent of the crisis, groups like IAFC have been lobbying substantially for the CCAP to be refunded immediately, and lawmakers have responded. An emergency Senate appropriations meeting on the issue was held in early February. But any changes they make will have to come in the next few months. In the short term, Skorusa has asked regular-paying parents to pay their tuition in advance to subsidize the families on financial assistance, but it won’t be enough to keep her afloat until June. If worse comes to worst, Skorusa says she’ll have to terminate all the families who pay through the CCAP—including some children she’s cared for since infancy.

“I’m hoping [lawmakers] fund this program and honor their obligation, not only to us, but also to the families and children that they promised to pay for,” Skorusa said. “I’m hoping they’re going to do that. If they don’t honor their obligation, I can’t honor my obligation to them and pay real estate taxes and payroll taxes. It can’t just be one way.”

According to Velazquez, keeping the CCAP alive is simply the most productive course of action, for both parents and the state.

“If I’m not able to take my kids to daycare, then I need to take care of them, so that would mean that I have to stay home and I no longer have that source of income,” Velazquez said. “So [with CCAP] it’s more beneficial, because at least you have this person who’s paying taxes. It’s helping out the economy as well. If not, then you just have more people who are at home and relying on state income.”

Whelan too expressed frustration at the irrationality of the funding cuts, the burden of which falls on those who least deserve it.

“These are people who are doing what we want them to do. They’re working, they’re going to school, they’re taking care of their kids. The struggles that they face are incredible, but they’re trying to do what they’re supposed to do,” Whelan stated. “And we’re going to pull this critical rug out from under them.”