Summary

With the Temporary Assistance for Needy Families (TANF) program taking effect in 1997, child care assistance became a significant strategy for helping welfare recipients move into the workforce and for helping other low-income families stay off welfare. Since 1997, states have used federal funds from the Child Care and Development Fund (CCDF) and TANF along with state funds to expand child care assistance programs. However, given the current budget problems in most states and the competing demands for TANF and state funds, it is possible that states have changed their child care policies and the availability of child care assistance to low-income families.

A vast majority of states have made all three groups of families--TANF families, families transitioning off TANF, and other low-income working families--eligible for child care assistance. However, half of the states do not provide child care assistance to all the families who apply and are eligible for such assistance under the states' eligibility policies. States often give TANF and transitioning families higher priority than other low-income working families when program resources are insufficient to cover all who apply. Since January 2001, two-thirds of the states made key changes that affect the availability of child care assistance while the other one-third maintained their policies. Of the 35 states that made key changes: 23 made changes tending to decrease the availability of assistance, 9 made changes tending to increase the availability of assistance, and 3 made a mix of changes. While these changes would appear to have decreased the availability of child care assistance overall compared with 2001, we could not determine the actual outcomes in numbers of children served and their welfare status because data on these outcomes are not readily available. Governors' budget proposals for fiscal year 2004 present a mixed picture for child care assistance funding. Child care officials in 29 states identified governors' budget proposals that contained measures that would either maintain (11 states), decrease (11 states) or increase (7 states) funding for child care assistance, if adopted. The child care officials in the remaining states either reported that the state did not have a governor's budget proposal currently addressing child care assistance (17 states) or did not provide information on the proposals (5 states).