INDIANAPOLIS — For Dianna Wallace, the COVID-19 pandemic highlighted the need for a robust childcare system in the United States. Not just for the children, who reap the benefits of early education well into adulthood, but also the parents who contributed to the economy.
“Fami l ies are unable to actually be engaged in our economy without the necessary supports for young children and our young children are unable to succeed and thrive and have joy without (quality early education) environments,” Wallace, the executive director of the Indiana chapter of the Association for the Education of Young Children, said.
A U.S. News and World Report found that Indiana ranked among the worst states for childcare costs, averaging $9,589 annually for one 4-year-old child. For a single parent, that amounts to 35.7% of their income or 10.5% of a married couple’s income.
The high cost to parents compounds with staffing shortages and a lack of quality providers across the state. In response to a more expansive plan proposed by Congressional Democrats, Indiana Sen. Todd Young, a Republican, introduced a proposal to expand childcare options for families with colleagues Tim Scott, R-South Carolina, and Richard Burr, R-North Carolina.
“I understand that the child care access problem won’t be solved overnight. There are many factors that prevent families from accessing care,” Young said in an email response to questions. “I helped introduce this bill because it is a sensible option to make strides in access and quality, while being cognizant of the fiscal challenges facing our country.”
The act increases the number of families eligible under the Child Care and Development Block Grant (CCDBG) program to those making 85% of the state’s median income. Families making less than 75% of the state’s median income pay no copay for their childcare, while families making between 76% and more pay no more than 7% of their income as a copay.
For Indiana, with a median income of $58,235, families making $49,500 or less qualify for the program and those making $43,676 or less have no copay for childcare.
The Center for American Progress (CAP), a nonpartisan policy institute, maintains that a market-based child care system cannot adequately serve American families, noting that only one in nine eligible children under the age of 6 received a child care subsidy in 2019.
States vary in their levels of restriction for childcare assistance, meaning that some states serve a greater proportion of eligible children. Just 9.7% of eligible Hoosier children received the subsidy, according to the analysis, or approximately one in 10 children, lower than the U.S. average of 11.6%.
Wallace, who assists providers with continued education and researches best practices, outlined one of the biggest changes under Young’s act, which would change how the states calculates the “true cost” of childcare. Rather than establishing a county-wide “market rate” based on current availability, states could pivot to cost modeling, which calculates the operational and workforce costs of care.
“Indiana is made up of 92 counties, many of which are rural, and those rural counties may not have sufficient capacity to establish a market rate,” Wallace said.
The state acknowledged it was working on setting a new reimbursement rate, but couldn’t predict the impact on providers or families. Young, in an email, said that the bill would improve reimbursement rates for providers and support professional development for child care staff which would encourage the establishment of more childcare providers.
“Families need to have access to a mixed delivery system… (that) includes not only licensed centers but family childcare homes, public and private schools, registered ministries and Head Start. The system needs to be very diverse,” Wallace said. “In many of the locations in the state of Indiana, families do not have that choice.”
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