Comparisons of State Child Care Assistance Programs: How Does Illinois Measure Up?

All states utilize federal funds available through the Child Care and Development and the Temporary Assistance for Needy Families block grants to help fund their child care programs. Slightly more than half of the funding for the Illinois consolidated child care assistance program (CCAP) is federal funds.

Illinois spends over $700 million annually in child care assistance so that low-income parents can work, go to school, or participate in other work-related activities. To qualify for assistance, a family’s income must fall below 50 percent of the state median income ($30,396 SMI for a family of three). Families pay a portion of the cost of child care, with the amount being determined by a sliding fee scale. Child care providers are reimbursed according to a rate schedule. Parents choose their provider—a child care center, licensed home, or family, friend or neighbor exempt from child care licensing rules—and the reimbursement level varies with the type of care. Since Illinois’s CCAP began in 1997, all income-eligible families participating in an allowable activity have been served, with no waiting list for services and no time limit on how long services are available.

The National Women’s Law Center (NWLC) recently released its annual comparison of state CCAPs. (See Karen Schulman & Helen Blank, State Child Care Assistance Policies 2006: Gaps Remain, with New Challenges Ahead, NATIONAL WOMEN’S LAW CENTER ISSUE BRIEF, Sept. 2006.) NWLC’s state-by-state comparison is the only annual study of its kind and enables states to take stock of how they are doing, compared to one another. NWLC’s report covers the three main aspects of state CCAPs (access, affordability, and quality) by using four points of comparison (income eligibility levels, waiting lists, parent copayments, and provider reimbursement rates). How does Illinois compare with the other states?

Access

NWLC uses two points of comparison to measure access to a state’s CCAP. The first is the state’s income guideline—the income level at which families lose eligibility for the CCAP. Illinois law requires that income eligibility for the CCAP be at least 50 percent of state median income. It is currently at approximately 51 percent of state median income since the state median income fell slightly this year and the child care guidelines remained the same.

Nationally the average or median income limit is about 55 percent SMI. So Illinois is about 5 percent below the national average.

NWLC’s other measure of access is whether a state has a waiting list for child care or has frozen intake (i.e., the state turns away new cases and does not keep a waiting list). Only 18 states had waiting lists or frozen intake in 2006, and there is a slight trend away from having waiting lists. The other 32 states had no waiting lists for services. Illinois has never had a waiting list for child care since the consolidated program began in 1997.

Affordability

NWLC measures affordability by comparing family copayments for a family of three with one child in care at the income of 100 percent and 150 percent of the federal poverty level. In Illinois these families have monthly copayments of $65 and $160. Illinois’s copayments are right in the middle compared to other states.

Quality

NWLC measures quality by comparing provider reimbursement rates. Federal guidelines recommend that CCAP provider reimbursement rates be set at the 75th percentile of the market according to the results of a state market rate survey. This means that states should pay enough to access three out of every four slots in the market. This is necessary, according to the federal government, to ensure that the low-income children who qualify for the CCAP have access to the same quality of care as higher-income children.

Illinois has long had some of the lowest child care reimbursement rates in the country. Until recently the rates had not changed since 2000. In April 2006 rate increases went into effect for all providers. Rates for licensed and license-exempt home providers increased as the result of a collective bargaining agreement between the State of Illinois and the Service Employees International Union Local 880 (SEIU). Illinois separately agreed to raise rates for child care centers. Under the terms of the SEIU contract, home providers’ rates will increase three more times between now and July 1, 2008.

Even with the substantial rate increases that went into effect on April 1, 2006, Illinois’s provider reimbursement rates remain among the worst in the country. NWLC measures the percentage difference between the reimbursement rates for preschoolers and infants in centers and the 75th percentile. Using Illinois’s preincrease rates, NWLC found that Illinois’s preschool rate for centers ($527 per month) was 33 percent below the 75th percentile ($788) and Illinois’s infant rate for centers was 25percent below the 75th percentile. Even with its new reimbursement rates, Illinois’s center rate is still 30 percent below the 75th percentile for preschoolers and 20 percent below the 75th percentile for infants—one of the worst ratios in the nation.

Conclusion

NWLC’s state-by-state comparison confirms that the weakest point of Illinois’s CCAP is its low provider reimbursement rates. Illinois is addressing this through the April 1, 2006, rate increase, the additional forthcoming rate increases for home providers, and future comparable increases for centers. Illinois’s income eligibility guidelines are somewhat lower than the average state’s and its copayments, at least for families at 100 percent and 150 percent of the federal poverty level, are pretty average. Illinois is among the majority of states that do not impose waiting lists or frozen intake on their CCAPs. 

For more information, please contact Dan Lesser.