Financing Child Care in the United States - Ewing Marion Kauffman ...

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PUBLIC–PRIVATE PARTNERSHIPS EMPLOYER AND PUBLIC SECTOR PARTNERSHIPS POPULATION SERVED Employed women who become unable to work as a result of pregnancy, and who were covered by a TDI plan, may file for TDI benefits. STRATEGIC CONSIDERATIONS • The benefits available under TDI, though very limited, can be an important source of support for unemployed mothers with low to moderate incomes. When combined with accumulated vacation and sick leave, TDI benefits can help a mother to stay home with her newborn child for several months. • Partial wage replacement under TDI is an inexpensive way to support parental leave, and one that allows the cost to be shared by employers and employees. It helps to keep many low–income women off welfare and has not caused a significant economic strain on employers. Although the New Jersey TDI claims load has increased, the fund has remained solvent due in part to the fact that the taxable wage base is adjusted each year with increases in the average weekly wage. Interest income on the fund also contributes to its solvency. • The cost of TDI benefits is considerably less than the cost of subsidizing infant care for low— and moderate— income families. • Small–scale employers are particularly benefited by the New Jersey approach to TDI. In 1952, 72 percent of employees and 36 percent of covered employers were covered under private plans. Over time, however, smaller employers found that it didn’t pay to have a private plan, and some private insurers found it was not profitable enough to compete with the state. More and more employers enrolled in the state plan. By 1994, only 21 percent of covered workers and 3 percent of covered employers used private plans. In 1998, 19 percent of employees and 3 percent of employers were covered under private plans. • There are real limitations to what TDI can do. TDI is currently limited to a pregnancy–related “disability” that is corroborated by a physician. It may not be used to care for a newborn or an adopted child, and cannot be used by a father or other family member (since by definition, they did not become “disabled” by the pregnancy). The New Jersey Legislature, however, is currently considering legislation that would extend TDI coverage. A 1577 is a pure TDI plan that would provide replacement income for family members who must leave employment temporarily to care for a newborn or newly adopted child, or a seriously ill family member. An alternative measure, A 2037, would provide TDI coverage for a family disability and Unemployment Insurance for birth and adoption. OTHER SITES WITH SIMILAR STRATEGIES At least five states in addition to New Jersey have temporary disability insurance programs: Rhode Island (funded by employee tax); California (funded by employee contributions); New York (funded by employer tax or joint employer/employee contributions); Puerto Rico (funded by employers and employees), and Hawaii (funded by an employer and employee tax). Additionally, more than half of all workers in the United States receive TDI benefits from their employer through private insurance plans. CONTACTS Gregory L. Williams Senior Research Associate New Jersey State Legislature Office of Legislative Services, Central Staff State House Annex, CN–068 Trenton, NJ 08625 Phone (609) 984 0445 Fax (609) 777 2998 143
COMMUNITY AND PUBLIC SECTOR PARTNERSHIPS ACCREDITATION FACILITATION PROJECT FOR NEW JERSEY (NEW JERSEY) DESCRIPTION The Accreditation Facilitation Project for New Jersey is a public–private partnership. Its goal is to increase the number of child care centers accredited by the National Association for the Education of Young Children (NAEYC) from 130 to 260 over a two–year period. The project is statewide in scope, focusing 80 percent of its resources on early childhood programs serving the state’s most disadvantaged children and families. WHEN ESTABLISHED The Accreditation Facilitation Project for New Jersey was planned and designed in 1998 and 1999, and implementation began in March 2000. ANNUAL AMOUNT The total amount of the funding committed for the two–year period is approximately $1.5 million. The partnership is financed by the State of New Jersey, the Schumann Fund of New Jersey, the Lucent Technologies Foundation, Johnson & Johnson, other New Jersey foundations and several members of the American Business Collaboration for Quality Dependent Care (ABC). SERVICES FUNDED The overall goal of the Accreditation Facilitation Project for New Jersey is to improve the quality of child care offered to children, particularly low–income children, by assisting 130 child care programs to become accredited. These programs are then positioned to take advantage of the higher state reimbursement rate available to accredited child care programs serving low–income children. Nearly 60 percent of the resources are devoted to working with centers in what are known as the “Abbott Districts.” As a result of school financing equity litigation in New Jersey, 30 school districts, which together serve 75 percent of the poor and minority students in New Jersey, are required to develop and offer high–quality prekindergarten child care programs for all 3– and 4–year–old children in those districts. (While the provision of the program is required, participation is voluntary.) The accreditation project provides up to $13,000 on a per center basis in the Abbott Districts. The remaining funds are split between child care centers in New Jersey’s Early Childhood Program Aid (ECPA) districts, in which at least 20 percent of the children enrolled are eligible for free or reduced–price school lunch, and non–ECPA centers. Although the number varies from year to year, through ECPA New Jersey provides support for preschool and related early childhood programs in 135 school districts (FY1999–00) serving low–income children, as well as other child care centers in New Jersey. Up to $9,800 is made available to the Early Childhood Program Aid centers and up to $7,400 is available to non–ECPA centers. Financial resources to assist with a facilitated approach to accreditation, enhancement grants for use at the sites and scholarships for staff to pursue Child Development Associate and Certified Child Care Professional credentials, as well as associate’s and bachelor’s degrees, are available to all participating centers. HOW FUNDS DISTRIBUTED The lead organization for the Accreditation Facilitation Project for New Jersey is the New Jersey Professional Development Center, charged with enhancing professional standards, improving articulation among degree–granting institutions in early childhood and providing technical and financial assistance toward career development and accreditation. The center, in turn, has contracted with eight regional organizations to select participating centers, and provide technical and financial support towards accreditation. Each regional organization works with a cohort of approximately 16 child care centers. POPULATION SERVED The Accreditation Facilitation Project is focused on improving quality in child care statewide, particularly in areas serving low–income children. Along with centers served within the framework of the Abbott Districts and ECPA focus on low–income children, some centers are nominated by the funding partners from the American Business Collaboration. STRATEGIC CONSIDERATIONS • Planners of the initiative cite two significant factors that led to the project. First was the decision by the State of New Jersey to create a rate differential for accredited child care programs participating in the state’s subsidized child care program. Planners believed that this would give programs a viable way to sustain better quality. Additional impetus came in large part through the Abbott v. Burke educational equity litigation. Through this litigation, the New Jersey Supreme Court ordered the state to fund the provision of preschool services for 3– and 4–year–old children in 136 school districts that serve New Jersey’s low–income families. The court urged public school districts to collaborate with the existing community– based child care centers to provide these programs. 144
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FINANCING CHILD CARE IN THE UNITED
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FINANCING CHILD CARE IN THE UNITED
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ABOUT THE GRANTEE PHILADELPHIA CITI
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HOW TO USE THIS CATALOG This catalo
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DIFFERENT EXPECTATIONS The expectat
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03 LONG-TERM THINKING Successful st
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LEVERAGING Matching and leveraging
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TAXES Income taxes are the major so
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EMPLOYER INCOME TAXES Twenty-five s
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LOCAL PROPERTY TAXES CHILDREN’S S
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GENERATING PUBLIC REVENUE LOCAL PRO
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GENERATING PUBLIC REVENUE SALES AND
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GENERATING PUBLIC REVENUE FEES •
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GENERATING PUBLIC REVENUE LOTTERIES
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SOCIAL AND HUMAN SERVICES A number
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EDUCATION Education is a powerful r
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EDUCATION STATE INVESTMENTS IN PREK
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