Child Care in Pennsylvania:
A Short Report on
Subsidies, Affordability, and Supply
This report summarizes recent child care information for the state of
Pennsylvania. The first section provides new information on
child care subsidies, based on eligibility estimates
generated by the Urban Institute and state administrative data reported to
the U.S. Department of Health and Human Services (HHS). The second
two parts, on affordability and
supply, draw on state and local data collected by the
Urban Institute during the summer of 1999 under contract with HHS.
A companion document to the national report entitled
"Access to Child Care for Low-Income
Working Families," the Pennsylvania report is one in a series of nine
state reports. [The other reports are:
California, Connecticut,
Delaware, Florida,
Louisiana, Michigan,
Texas, and Utah]
Figure 1. Child Care and Development Fund (CCDF) Eligibility and
Receipt in Pennsylvania
Sources: Urban Institute simulations and state administrative
data reported to the Child Care Bureau.
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1,232,000 children under age 13 (or under age 18 if disabled) live
in families where the family head (and spouse if present) is working or is
in an education or training program, as shown in Figure 1. Children across
all family income levels are included in this estimate. Most of these children
(1,167,000) are under age 13 and living with working
parents.1
-
443,000 of these children, and 266,000 families, are estimated to
meet Pennsylvanias income guidelines for child care assistance under
the Child Care and Development Fund (CCDF) October 1997 state plan. The
eligibility estimate would be even higher 534,000 children
if Pennsylvania raised income eligibility limits to 85 percent of
State Median Income, the maximum level allowed under Federal
law.2
-
To be eligible under Pennsylvanias October 1997 state plan, a family
of 3 had to have income below $31,320, or 74 percent of State
Median Income.
-
More than three-fourths of eligible children (77 percent) live in families
with annual income below 200 percent of the Federal poverty threshold and
over one-quarter (27 percent) are living in poverty. About 10 percent live
in families that report receiving cash welfare.
-
Most (389,000) eligible children are under age 13 with working parents; the
remaining children have parents in education/training programs or are disabled
youth under 18.
-
73,000 children in Pennsylvania received child care subsidies funded
by CCDF in an average month in 1998. This estimate suggests that 16 percent
of the eligible population under state limits (and 14 percent of children
who would be eligible under the Federal maximum limits) were served with
CCDF funds. In addition, Pennsylvanias state administrative data system
indicates that about 9,000 children were served with other Federal and state
funds.3
-
The Child Care and Development Fund (CCDF) is the major source of Federal
funding allocated to states to subsidize the child care expenses of low-
and moderate-income families so they can work, or attend education or training
programs. Using CCDF dollars along with state funds, Pennsylvania has designed
its own child care program within broad parameters specified under federal
law. CCDF-funded subsidies, and the number of children that the state reported
were served with these subsidies, are highlighted in this report because
CCDF is a primary source of funding in most states. Also, CCDF administrative
data is the most comparable source of child care data across states. It should
be noted, however, that Pennsylvania, like many other states, also uses other
funding sources to provide child care subsidies.
-
The state of Pennsylvania has multiple waiting lists for child care
subsidies. Families that do not enter the child care system through the welfare
system or do not have a child with special needs are most likely to be put
on waiting lists. Children may be on a waiting list for one day or for several
months. As of June 30, 1999, there were 4,764 children on the waiting
list for subsidies in Pennsylvania. This number includes 1,530 children
on the waiting list in Philadelphia and 940 children in Pittsburgh.
By September 1999, Pennsylvania reduced the statewide waiting list by nearly
1,000 children to
3,776.4
-
In addition, state staff believe there are eligible families that do not
apply for subsidies. This belief is corroborated by staff from Child Care
Partnerships, a child care resource and referral agency that serves the
Pittsburgh area.
-
The number of families applying for subsidies has more than doubled since
Pennsylvania increased its funding for child care subsidies in February,
1999.
II. Affordability5
-
Prices for child care vary considerably, by such factors as geographic area,
type of provider and age of child. Figure 2 shows the average monthly prices
for child care in Pittsburgh and Philadelphia, Pennsylvania. Given that these
are average prices, it is clear that many families pay more or less than
this amount.
-
Centers in Pittsburgh charge an average of $490 per month for preschool
care and $589 per month for infant care, as shown in Figure 2. This
means that a family with $15,000 in income and one preschool child in an
average-priced center would spend close to two-fifths (39 percent) of its
total monthly income on child care expenses. Average-priced infant care would
represent an even higher share (47 percent) of monthly income for a family
earning $15,000.
-
Accredited care costs even more, $550 per month for a preschooler
in center-based care, or about 44 percent of family income for families with
$15,000 in income.* Families
with an infant in an accredited center would pay $680, or more than
half (54 percent) of family income for families earning $15,000.
-
Centers in Philadelphia charge even more per month for care, particularly
for infants. Average-priced preschool center care costs $494 a month,
or about 40 percent of monthly income for a family earning $15,000. If this
low-income family had an infant, rather than a preschooler, in average-priced
center care, the $620 per month price would consume 50 percent of
the familys total income.
Figure 2. Child Care Prices and Co-Payments for Hypothetical
Pennsylvania Families
of Three Earning $15,000 with One Child in Care
|
WITHOUT SUBSIDY |
WITH SUBSIDY |
Average Monthly Prices
(Full Time Care) |
% of Income
(Family Income of $15,000 Annually) |
Monthly Co-Payments*
(If receive subsidy) |
% of Income*
(Family Income of $15,000 Annually) |
FAMILY LIVING IN PITTSBURGH, PENNSYLVANIA |
INFANT (1 year) |
Center-based |
$589 |
47.1% |
$108 |
8.7% |
Accredited center-based |
$680 |
54.4% |
$108 |
8.7% |
Family child care home |
$481 |
38.5% |
$108 |
8.7% |
PRESCHOOLER (4 years) |
Center-based |
$490 |
39.2% |
$108 |
8.7% |
Accredited center-based |
$550 |
44.0% |
$108 |
8.7% |
Family child care home |
$455 |
36.4% |
$108 |
8.7% |
FAMILY LIVING IN PHILADELPHIA, PENNSYLVANIA |
INFANT (1 year) |
Center-based |
$620 |
49.6% |
$108 |
8.7% |
Accredited center-based** |
NA |
NA |
$108 |
8.7% |
Family child care home |
$446 |
35.7% |
$108 |
8.7% |
PRESCHOOLER (4 years) |
Center-based |
$494 |
39.5% |
$108 |
8.7% |
Accredited center-based** |
NA |
NA |
$108 |
8.7% |
Family child care home |
$407 |
32.6% |
$108 |
8.7% |
* State policy does not prevent allows providers from to charging
parents additional amounts, above the co-payment, if the providers
rates exceed the state reimbursement level.
** Accredited prices were not available for Philadelphia due
to small sample sizes.
Source: Data collected by the Urban Institute from Child Care
Partnerships and Philadelphia Child Care Resources South/Center City, child
care resource and referral agencies serving Pittsburgh and Philadelphia,
respectively, summer 1999.
-
Family child care homes in Pittsburgh, Pennsylvania charge an average of
$455 for preschool children and $481 per month for infants.
This means that a family with $15,000 in income and one child in an
average-priced family child care home would spend 36 percent of its monthly
income on care for a preschool child or 39 percent of income for an infant.
A family in Philadelphia with the same annual income using average-priced
family child care would spend 33 percent of its monthly income ($407
per month) for preschool care or 36 percent ($446 per month) for an
infant.
-
Families who receive child care subsidies usually pay much smaller monthly
co-payments rather than the full market rate. Such co-payments are
established under a sliding fee schedule, and are based on family size and
income.
-
For example, a family with $15,000 in income and one preschooler or infant
in an average-priced center in Pennsylvania would be charged a monthly co-payment
of $108, or 8.7 percent of monthly income, as shown in Figure 2.
-
In Pennsylvania, welfare recipients in an unpaid work activity, or employed
but yet to receive a paycheck, are exempt from paying a co-payment.
-
State policy does not prevent providers from charging parents additional
amounts, above the co-payment, if the providers rates exceed the state
reimbursement level. For example, the maximum CCDF rate for preschool center
care in Pittsburgh is $453 per month6, which
is $37 less than the $490 average price shown in Figure
2**. If the $37 differential
is paid by the family, the total cost to the family is $145 per month, more
than the official co-payment of $108 shown in Figure 2. If the fee is not
charged to the family, the provider loses $37 per month for providing service
to a subsidized child. The differential could be much larger than $37 for
some child care centers, including accredited centers and other centers with
higher than average rates.
-
Not all providers in Pennsylvania accept children who receive subsidies.
For example, among the providers in the Philadelphia Child Care Resources
South/Center City database, 80 percent of centers, 70 percent of family child
care homes, and 61 percent of group child care homes accept subsidies.
-
According to the state plan for 1997-1999, maximum reimbursement rates in
Pennsylvania are capped at the 75th percentile of market rate.
Providers may be unwilling to accept subsidized children, or may limit their
enrollment, when the state reimbursement rates are lower than their prices
(see the example in section II). As a result, families receiving subsidies
may have limited choices of caregivers.
-
Staff from a resource and referral agency serving Pittsburgh report shortages
in the supply of infant and toddler care in certain areas. There are also
shortages of, school-age care, especially in suburban areas, and shortages
throughout the county of care for children who have special needs or are
ill.
-
The state of Pennsylvania initiated a program for assessing and building
child care capacity, and enhancing quality in May of 1998. A provider survey
and assessment of needs was conducted in June 1998 with an additional survey
planned for January 2000. Results from the survey in 1998 showed inadequate
capacity for school-aged care in all counties.
1. Estimate based on microsimulations using the
Urban Institute's TRIM3 model, guidelines in the state's 1997-99 CCDF state
plan, and three years of Current Population Survey data (calendar years
1995-97). Back to text
2. Ibid. Back to text
3. Estimates based on state administrative data
reported to the Child Care Bureau and adjusted to reflect children funded
through CCDF only. 1998 figures based on April-September 1998.
Back to text
4. Waiting list data were obtained and compiled
by the Urban Institute from the Pennsylvania Department of Public Welfare,
the state child care agency. Back to text
5. Information in this section was obtained and
compiled by the Urban Institute from the Pennsylvania Department of Public
Welfare, Child Care Partnerships (a child care resource and referral agency
serving Allegheny County (Pittsburgh)) and Philadelphia Child Care Resources
South/Center City (a child care resource and referral agency serving the
Philadelphia area). Back to text
6. State maximum rates were obtained and compiled
by the Urban Institute from the Pennsylvania Department of Public Welfare,
summer 1999. Back to text
7. Information in this section was obtained and
compiled by the Urban Institute from Child Care Partnerships.
Back to text
* Providers are accredited by national organizations
based on criteria designed to measure quality. Accreditation is one indication
that a provider has a demonstrated commitment to providing quality care.
Back to text
** Effective January 1, 2000, Pennsylvania will
increase its reimbursement rates by an average of 14 percent.
Back to text
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