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

SOCIAL AND HUMAN
SERVICES
RHODE ISLAND CHILD CARE
ENTITLEMENT (RHODE ISLAND)
DESCRIPTION
Rhode Island has established a child care entitlement
program to help pay the child care costs of families with
limited earnings (at or below 250 percent of the federal
poverty level, which is about $34,000 a year for a family
of three).
WHEN ESTABLISHED
The child care entitlement was initially established as part
of welfare reform legislation, the Rhode Island Family
Independence Act, enacted in August 1996. It was
expanded (to raise the eligibility ceiling and cover children
age 13 to 16) as part of Starting RIte legislation, which
passed in 1998.
ANNUAL AMOUNT
Rhode Island estimated FY2000 expenditures of $42.4
million (for approximately 9,000 children). Funding comes
from the federal Child Care and Development Fund
(CCDF), Temporary Assistance for Needy Families
(TANF) fund transfer and state general revenues.
SERVICES FUNDED
The subsidies may be used to purchase any form of legal
child care: centers, family child care homes, in–home
child care or care provided by relatives. Parents choose
the type of care they prefer. Approximately 70 percent of
subsidized children are cared for by regulated providers.
HOW FUNDS DISTRIBUTED
Funds are administered as portable subsidies (vouchers),
tied to a specific child and program. Child care providers
are reimbursed by the Rhode Island Department of
Human Services every four weeks. Co–payments are
collected from families by the child care providers.
POPULATION SERVED
All families with incomes at or below 250 percent of
poverty (about $34,000 for a family of three for 2000)
are entitled to a child care subsidy. Families must be
employed or in an education or training program and
have a child age 16 or younger who needs child care for
all or part of the day. Families who are not participating in
Temporary Assistance for Needy Families (TANF) are
required to contribute to the cost of child care through a
co–payment. The co–payment is approximately 3 percent
of gross income for families with incomes between 100
percent and150 percent of poverty and 2 percent of
gross income for families with incomes at or below the
poverty level.
STRATEGIC CONSIDERATIONS
• Rhode Island is the only state in the country in which
child care is guaranteed to families based on income
alone, without reference to welfare status or time limits.
Families are eligible if they are working or enrolled in
education and training programs.
• Passage of the child care entitlement was a critical
part of Rhode Island’s vision that child care and health
care are the building blocks that must be in place to
ensure successful, sustainable transitions to the work
force.
• In addition to providing child care as an employment
support for low–income families, Rhode Island is
committed to ensuring that all children have access to
the high quality care and learning opportunities they
need to succeed in school and life. To this end, the
state included an additional $7 million in the 1998
Starting RIte legislation to support several quality
improvement initiatives. These included: improved
provider reimbursement rates (to reach the 75th
percentile—a 32 percent increase); expanded training
for child care providers; support for early childhood
program accreditation; innovation and start–up grants
to expand the quality and supply of early childhood and
school–age child care programs; and grants to expand
the number of children that receive comprehensive
services in Head Start and/or child care programs.
• Strong leadership from Governor Lincoln C. Almond (R),
State Representative Nancy Benoit (D) and
Department of Human Services Commissioner
Christine Ferguson was instrumental in passing this
legislation.
OTHER SITES WITH SIMILAR STRATEGIES
No other examples of a state electing to use general
funds, CCDF and TANF funds for a child care entitlement
are known.
CONTACT
Sherry Campanelli
Associate Director
Rhode Island Department of Human Services
LP Building
600 New London Avenue
Cranston, RI 02920
Phone (401) 462 2423
E–mail scampane@gw.dhs.state.ri.us
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