Testimony of Audrey Kasselman, Policy Analyst, before the Committee of the Whole

February 28, 2024
Testimony
Person Testifying: Audrey Kasselman
Title: Policy Analyst, DC Action
Testimony Heard By: Committee of the Whole
Type of Hearing: Oversight Hearing

Good afternoon, Chairman Mendelson and members of the Committee of the Whole. Thank you for the opportunity to address the Committee today. My name is Audrey Kasselman and I am a resident of Ward 1. I am the Early Childhood Policy Analyst at DC Action and a member of the Under 3 DC coalition. Under 3 DC is a coalition that is committed to building a racially just early childhood system and to securing a strong start for every infant and toddler in the District. My testimony today will focus on the importance of improving the Child Care Subsidy program to help create a strong, effective, and connected early childhood system in the District. We are grateful for the DC Council’s continued commitment to strengthening our early childhood education system, of which the Child Care Subsidy program is an essential component.

Background

Many families with young children in the District rely on child care so that they can go to work or school, knowing that their children are developing and growing in a safe, nurturing, and positive early learning and care environment. High-quality early education supports children’s cognitive, physical, social, and emotional development. Yet, the cost of child care is out of reach for too many DC families. According to OSSE’s 2023 Cost of Care report, the average cost of center-based infant care for one child in DC is $2,123 per month. At this rate, child care costs for just one child make up more than 20% of the median income ($108,492) of families with children in the District. For context, according to the U.S. Department of Health and Human Services, child care is considered affordable when it represents less than 7% of a family’s income. To be able to afford child care, according to this definition, a family with an infant or a toddler would have to make $364,000 or $334,729 a year, respectively.

The Child Care Subsidy program in DC depends on federal and local funds to help families with very low incomes afford child care by covering the full cost of their child care fees. Families with moderate and low incomes make a co-payment that does not exceed 5.5% of their income based on a sliding income scale. The subsidy program, via OSSE, then makes payments to child care providers to cover part of the difference between the family’s contribution and the cost of running an early learning program through a daily reimbursement rate designated by the District. 

District families with children under age 13, whose income is below 300% of the federal poverty line (approximately $74,000 per year for a family of three), are eligible for the Child Care Subsidy program if a parent is working or in school. In FY23, 4,720 infants and toddlers in DC participated in the Child Care Subsidy program and 267 child development homes and centers participated. 

There is great potential for the Child Care Subsidy program to increase access to affordable, high-quality early learning opportunities for thousands of DC children. In recent years, OSSE has addressed some of the barriers that prevent families and providers from participating, including attempting to improve the application process, increasing family eligibility, reducing co-pays, and increasing subsidy reimbursement rates. However, significant barriers remain to optimizing this critical program

Child Care Subsidy Program Utilization 

The Child Care Subsidy program is currently underutilized, even though the costs of child care are out of reach for many District families. While participation in the Child Care Subsidy program may be low due to a number of factors, particularly notable issues include the number and location of participating providers, insufficient publicity and awareness, challenges with the application process, and reimbursement rates for providers that don’t match the cost of care. 

Due to limitations in the data OSSE collects, we do not know the total licensed capacity for subsidy enrollment. Participating programs’ subsidy enrollment can range from one or two subsidy-eligible children to most or all seats occupied by subsidy-eligible children. However, we do know that only 53% of the 5,935 income-eligible infants and toddlers were enrolled in the Child Care Subsidy program in FY22. This means that in FY22 there were almost twice as many infants and toddlers who were eligible to be enrolled based on family income than there were infants and toddlers actually enrolled. 

60% of child development facilities in DC participate in the Child Care Subsidy program. This does not mean, however, that 60% of all child care seats accept subsidies, as some participating programs have very few subsidy-eligible seats and others have a majority subsidy-eligible seats. Subsidy participation among child development facilities differs by ward. In FY23, subsidy participation was as follows:

Ward Percentage of Facilities Participating in Subsidy Program

1 60%
2 16%
3 25%
4 51%
5 48%
6 49%
7 77%
8 86%

 

It is clear from this data, and from data in a recent study on the supply and demand of child care in the District, that early learning programs participating in the subsidy program are primarily concentrated in the Columbia Heights and Anacostia neighborhoods, even though families live and seek child care across the city. 

Lack of Publicity of the Child Care Subsidy Program

Over the past six months, the Under 3 DC Coalition has heard directly from parents and providers about the challenges and barriers that exist with the Child Care Subsidy program. From this work, it is clear that many District families are not aware that the Child Care Subsidy program exists or whether they are eligible for the program. OSSE must take steps to increase awareness of the program and to ensure that all families that are eligible for a subsidy are set up to apply for and get approved for the program. 

Specifically, we call on OSSE to collaborate closely with parents and child care providers to co-create an outreach plan. OSSE should establish a parent advisory board to begin a concerted effort to inform parents about the availability of child care subsidies and how the process works. These steps will increase enrollment in the subsidy program and ensure that more children and families have access to affordable, high-quality child care. 

Challenges with the Child Care Subsidy Application

Families and providers who did know about the Child Care Subsidy program shared that the application process is burdensome and complicated. Families can apply for the program in person at a DHS processing center, in person at a Level II child care provider, or online. Across the application types, it takes too long for a Child Care Subsidy application to be processed. Some families cited waiting up to two to three months for their application to be approved. This means months without child care for their baby, which, for many, means they are unable to work or continue their education. In some cases, if the application is not assigned a case worker within 30 days, the applicant has to start over and resubmit their application. OSSE and DHS must work together to ensure a smooth, timely, minimally burdensome application process for families. Presumptive eligibility is one way that OSSE can speed up enrollment timelines and reduce barriers for families seeking to enroll in the program. Presumptive eligibility allows families (who are plausibly assumed to meet basic federal requirements) to receive temporary and immediate assistance to pay for child care, while the verification of their eligibility for the Child Care Subsidy program is in process. 

In addition to lengthy processing times, the application itself is burdensome for families. All versions of the application require significant paperwork, even for families who are already enrolled in other government programs and have already submitted their paperwork to District agencies. Expanding OSSE’s use of categorical eligibility would allow Child Care Subsidy program eligibility to be aligned with other government programs (such as SNAP and Medicaid), to ensure that families do not need to re-submit paperwork or endure lengthy processing times.  

The federal work and education requirements to receive a child care subsidy also create barriers for parents trying to enroll in the program. While OSSE cannot remove the federally mandated requirements, OSSE can and should modify the criteria to increase the amount of time that parents can be looking for a job, reduce the number of required work and education hours and include more qualified allowable activities (in addition to education and employment). Specifically, OSSE can include travel time and unpaid break or meal times in the required work and education hours. Current employment and education requirements prohibit participation in the program for some parents, many of whom do not have control over their work or class hours. A child should not miss out on the benefits of early childhood education simply because their parent does not exactly meet the criteria listed above. Taking advantage of federal flexibilities to expand the eligibility criteria is a critical opportunity to enable more families to participate in and benefit from the Child Care Subsidy program.

OSSE has worked to improve the application process by offering an online application, a long-requested and much-needed option for families looking to apply for the Child Care Subsidy program. This is an important step. Yet, in our conversation with users, parents noted barriers that limited their ability to use the application. Similar to the feedback we collected on the Child Care Subsidy program as a whole, many parents and child care providers did not know that an online application was available. OSSE should engage in significant outreach to make the online application widely known among families, child care providers, and other early education stakeholders. As OSSE makes the online application well known, the agency should provide opportunities for families to user test the application and directly provide feedback. OSSE should also provide training and support for early learning programs to learn how to use the online application. 

Based on feedback from the few parents and parent support staff who have used the online subsidy application, it is clear that the online application is not mobile friendly, which is a significant barrier to many parents. The application language is confusing and difficult to navigate. Parents suggested moving the Child Care Subsidy program application to DHS’s District Direct platform, which is user tested and generally well liked. 

Parents also noted that the application requires both parents’ information to proceed, which creates a barrier for parents who no longer have relationships with their co-parent. Parents recommended that they be able to complete the application without the second parent’s information, or to be able to provide that information supplementally, if available. 

Child Care Subsidy Program Reimbursement Rates

Subsidy reimbursement rates also play a role in the supply of high-quality, affordable, early learning and care programs. If subsidy reimbursement rates are too low, early learning programs will not be able to participate in the program and cover their costs, leading to fewer choices for families paying for child care with a subsidy. Last September, OSSE published its most recent Cost of Care Model report. One of the main purposes of cost modeling is to determine the reimbursement rates that OSSE pays to child development facilities that participate in the Child Care Subsidy program. According to the report, OSSE’s FY24 reimbursement rates are lower than the cost of care for child care centers serving infants and toddlers across all quality rating levels. The FY24 reimbursement rates only exceed the cost of care for child development homes serving infants and toddlers. 

OSSE states in the report, “to make sure children who receive subsidies have access to quality early learning, subsidy rates must reflect what it costs to deliver quality care,” yet reimbursement rates are lower than the cost of care for most child care centers. 

It is critical that OSSE engage in a concerted effort to increase participation in the subsidy program, among both child care providers and families with young children in the District. We ask OSSE to use available funding to increase reimbursement rates both to make currently participating providers whole, and to incentivize participation among the 40% of early learning providers who do not currently accept child care subsidies. It is likely that OSSE alone cannot fund reimbursement rates at the full cost of care with its current budget. Therefore, it is critical to the success of the program that the District plan to allocate sufficient funding to OSSE to raise reimbursements to align with the cost of care. We look forward to working with the administration and the Council to realize this goal.

Thank you for the opportunity to share about the current state of the Child Care Subsidy program.