Illinois Takes Leap Forward on Early Childhood Education and Care

The 2007 fiscal year budget approved by the Illinois General Assembly fully funds the major early childhood education and care initiatives that Gov. Rod Blagojevich announced when he unveiled his proposed budget three months ago. This includes $50 million to increase the state reimbursement rate to providers caring for the low-income children in the state child care assistance program (CCAP) and $45 million to move toward making preschool education available to all 3- and 4-year-olds in Illinois.

Child Care Assistance Program

The CCAP helps low-income parents pay for the full-day, full-year care they need to work and go to school. Parents choose their provider, and providers are reimbursed on a payment scale that varies with the type of provider, the age of the child, and the region of the state. Parents’ copayments are based on their family income and size. Illinois pays the balance of the state reimbursement. Approximately 200,000 low-income children in Illinois participate in the CCAP.

The amount of the state child care reimbursement has not changed in six years. Meanwhile, costs of staff, space, utilities, and supplies have all continued to rise. Due to the stagnant state reimbursement rate, providers have reduced the number of CCAP children they are willing to serve or stopped serving such children altogether, cut corners on quality, started charging parents more than the amount of their copayment to make up for the low state rate, and closed classrooms or even whole programs.

Federal law requires the state to provide the low-income children who qualify for the CCAP (family income must be below 50 percent of state median income to qualify for the program) with “equal access” to the same quality of care as higher-income children. Federal guidelines presume equal access if the state reimbursement rate is equivalent to the 75th percentile, that is, high enough to purchase three out of every four slots in the child care market (market rates are determined by a sophisticated biennial market rate survey of thousands of child care providers). Illinois’s reimbursement rates have fallen so low that in the most populated regions of the state the rates provide access to only less than one out of every five slots, that is, they are below the 20th percentile. The results are not much better in other regions of the state.

The General Assembly has long been concerned about this problem and two years ago passed legislation directing the Illinois Department of Human Services (IDHS), which administers the CCAP, to report on how to reform Illinois child care reimbursement rates. IDHS worked with stakeholders around the state to prepare a report, which has laid the foundation for the rate increases and restructuring included in the budget that the governor proposed and the General Assembly adopted.

The first major breakthrough on rates occurred last January when the Service Employees’ International Union (SEIU) Local 880 won its first contract with the state on behalf of the nearly 50,000 licensed and license-exempt home child care providers receiving payments from the CCAP. This agreement took effect on April 1 and includes a 35 percent increase (over 39 months) in the rate for license-exempt home providers and nearly as large increases for licensed homes. The Blagojevich administration subsequently agreed to provide comparable increases, also effective April 1, for child care centers in the 2007 fiscal year, and the administration’s proposed 2007 fiscal year budget reflected that agreement. To keep pace with the increases for home providers over the 39 months negotiated by SEIU, centers also will have to receive sizable increases in the 2008 and 2009 fiscal year budgets.

The final 2007 fiscal year budget includes a net increase of $34.3 million in general revenue funds for the CCAP. Additions to the budget include $50.3 million for provider rate increases ($32.8 million for home providers represented by SEIU Local 880 and $17.5 million for centers) and $14 million to cover anticipated growth in the program. The release of a $10 million reserve on funds and $20 million in anticipated savings from two cost-control initiatives offset the additions.

A work group of stakeholders and IDHS child care bureau staff recommended the cost-control initiatives. The work group last summer thoroughly reviewed the CCAP for accountability and efficiency measures to implement without making it more difficult for needy children to access the program. One measure requires child care centers funded through a City of Chicago subcontract to follow the same stringent income-verification procedures applied to all other families in the program. The other requires license-exempt home providers to register with the state by mailing a copy of their driver’s license or state identification card along with a copy of their social security number card. Illinois projects savings of $20 million from these measures.

In addition to the $34 million increase in general revenue funds for the CCAP, the final 2007 fiscal year budget includes an increase in the appropriation for the federal funds child care line of $8.7 million, representing increased federal funding available to Illinois as a result of the federal budget reconciliation act.

Preschool for All

The General Assembly also fully funded the Blagojevich administration’s request for $45 million for the first year of a planned five-year expansion that would make voluntary, free part-day preschool programs available to all 3- and 4-year-olds in the state. The governor will request $135 million in the first three years to reach 32,000 more children and will seek additional funding in the 2010 and 2011 fiscal years to reach any remaining unserved children whose parents would like them to participate.

Illinois would be the first state in the country to offer preschool to all 3- and 4-year-olds. Research shows that programs have a much greater impact, particularly with the most at-risk children, if they begin at age 3.

Preschool for All is the culmination of a multiyear effort to make preschool available to all 3- and 4-year-olds in Illinois. It builds on the past three years of $30 million annual increases in funding for the state prekindergarten program, which has significantly expanded the program’s reach.

Early in his term, Governor Blagojevich created the Illinois Early Learning Council, which, with input from more than 200 early childhood advocates, service providers, civic and law enforcement leaders, legislators and others, developed a detailed blueprint for a program. The goal of preschool for all as envisioned by the Early Learning Council is to provide high standards and quality curricula and teaching staff in a variety of settings that parents choose. These settings include schools, child care, and other community-based providers.

In addition to funding, a change in the law governing the state prekindergarten program expands eligibility. The program had been available only to children who were “at risk” of academic failure due to such risk factors as low income, lack of English language proficiency, or developmental delays. The legislation amends the prekindergarten act so that programs primarily serving at-risk children have first priority, but other children also may receive services. Providers primarily serving children in households whose incomes are up to four times the federal poverty line ($80,000 for a family of four) are the second priority, followed by all other providers. The law requires the Illinois State Board of Education to report on the breakdown of children who receive services each year. The law expanding eligibility beyond at-risk children will sunset in two years; the General Assembly then will need to reauthorize it.

For more information, contact Dan Lesser at the Shriver Center.