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

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ALLOCATING PUBLIC REVENUES SOCIAL AND HUMAN SERVICES once. The Connecticut strategy uses a series of bond pools over a longer period of time and includes many more projects. The Illinois loans amortized at 10 years; the Connecticut loans amortize for up to 30 years, making it more feasible for nonprofit child care centers to support a portion of the debt. CONTACTS Jeffrey A. Asher Managing Director and CFO CHEFA 10 Columbus Blvd, 7th Floor Hartford, CT 06106 Phone (860) 520 4002, Ext. 314 Fax (860) 520 4706 E–mail jasher@chefa.com Peter Palermino Program Manager Connecticut Department of Social Services Office of Child Care 25 Sigourney Street. 10th floor Hartford CT 06106 Phone (860) 424 5006 Fax (860) 951 2996 E–mail peter.palermino@po.state.ct.us Amy Gillman Program Director LISC Community Investment Collaborative for Kids 733 Third Avenue New York, NY 10017 Phone (212) 455 9840 Fax (212) 370 9427 E–mail agillman@liscnet.org CHILD CARE FINANCIAL ASSISTANCE PROGRAM (FLORIDA) DESCRIPTION Florida’s Child Care Financial Assistance Program makes funds available as grants and loans to help child care providers start their businesses, to assist providers in achieving accreditation and to improve the overall quality of child care. The loan program included a unique provision that allowed child care programs that complied with specified quality standards to apply for a rebate of up to 100 percent of the loan principal. WHEN ESTABLISHED The program was established in 1997. ANNUAL AMOUNT In FY1998, $400,000 was allocated for the loan program and $400,000 was allocated for mini–grants. In FY1999, $500,000 was allocated for the loan program and $500,000 was allocated for mini–grants. In FY2000 no additional funds were allocated for the loan program and $500,000 was allocated for mini–grants. In FY2000/01 $1 million (all of the funds) will be made available for mini–grants. All of these funds are drawn from federal Child Care and Development Funds and transfers from the Temporary Assistance for Needy Families fund. SERVICES FUNDED Grants and loans to child care providers are funded. Grants of up to $2,500 are available to help licensed child care centers or homes complete the licensure or accreditation process or make other quality improvements. (Until 1999, grants were capped at $500.) Grants of up to $250 are available to help unregulated family child care providers become registered or to help a registered provider make quality improvements. From 1997 to 1999, loans of up to $10,000 were available at 2 percent interest (for a 24– to 36–month term). Providers who received loans were eligible for rebates, based on the following terms: • Providers who remained in business for 24 months (and note is paid) received a rebate of 50 percent of the loan principal; • Providers who were licensed for at least one year preceding the total loan repayment and remained in business for 24 months received a rebate of 75 percent of the loan principal; • Providers who became accredited within six months of loan repayment and remained in business for 24 months received a rebate of 100 percent of the loan principal. 73
HOW FUNDS DISTRIBUTED The program is jointly administered by the Florida Children’s Forum (the statewide resource and referral program), local child care resource and referral agencies and the Bank of America. The Florida Children's Forum administers the grant funds, based on input from local child care and resource and referral agencies. Under the loan program (which operated from 1997 to 1999) local resource and referral staff assisted child care providers in completing the application forms and completing a detailed, on–site assessment. Additionally, resource and referral staff coordinated any necessary training and technical assistance. The Forum processed the credit applications and provided statewide technical assistance and oversight. Bank of America cut the checks, received and processed payments, mailed monthly invoices to the borrower and provided a monthly balance statement to the Forum detailing each resource and referral agency’s account activity. POPULATION SERVED Priority is given to providers in low–income areas with a high need for child care and a concentration of families receiving welfare. Priority also is given to providers that care for infants and toddlers and/or offer care during non–traditional hours. Participating providers must agree to: allow an on–site visit by resource and referral staff to determine need, complete relevant training courses (i.e. child care skills, business management) and accept children who receive public subsidies when vacancies occur. STRATEGIC CONSIDERATIONS • For a variety of reasons, the loan program proved to be difficult to administer. Administrative funds were extremely limited, making it difficult to secure the skilled and dedicated staff necessary to administer the loans. Additionally, staff in the 26 different resource and referral agencies that were responsible for administering the program were not comfortable with the role of banker. Many felt that managing arrearages and/or defaults compromised their role of providing support and technical assistance to child care providers. Others were burdened by the paperwork and tracking. • Because of difficulties in administering the loan program, all funds were allocated to grants in FY2001, and the grant ceiling was raised to $2,500. The Forum also developed clearer guidelines for distribution of grants and required each resource and referral agency to have an advisory council to help select grant recipients. • A Business Mentoring Project was initiated about a year after the Financial Assistance Program was started. This effort was designed to bring local businesses and child care providers together, identifying areas of expertise and need, and then matching them appropriately. Mentors worked with child care businesses on issues such as budgets and business plans, cost benefit analysis, marketing alternatives, capital procurement and tax assistance. • The loan and grant programs were part of a larger initiative, called Caring for Kids, that was designed to provide a variety of resources and supports aimed at improving the quality and supply of child care in the State of Florida. OTHER SITES WITH SIMILAR STRATEGIES Many states have loan and grant programs for quality improvement, but Florida is the only state that established a loan rebate for providers that successfully complete quality improvements. CONTACTS Donna Hefner Vice President Christina R. Cross Coordinator, Caring for Kids Initiative Florida Children’s Forum 2807 Remmington Green Circle Tallahassee, FL 32303 Phone (850) 681 7002 Fax (850) 681 9816 E–mail dhefner@fcforum.org E–mail ccross@fcforum.org 74
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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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:02 ALLOCATING PUBLIC REVENUES 54 O
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HOW TO USE THIS CATALOG This catalo
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This revised, expanded edition of F
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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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Page 66 and 67: EDUCATION Education is a powerful r
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FINANCING CHILD CARE IN THE PRIVATE
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When businesses in the private sect
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PUBLIC-PRIVATE PARTNERSHIPS EMPLOYE
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PUBLIC-PRIVATE PARTNERSHIPS EMPLOYE
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PUBLIC-PRIVATE PARTNERSHIPS COMMUNI
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CAPITAL INVESTMENT PARTNERSHIPS CHI
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PUBLIC-PRIVATE PARTNERSHIPS CAPITAL
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LOOKING TO THE FUTURE TAX POLICY Th
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LOOKING TO THE FUTURE THE HOME MORT
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LOOKING TO THE FUTURE HIGHER EDUCAT
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APPENDIX 174
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WHAT YOU OWN Property taxes on real
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INDEX 178
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Child Care Scholarship Fund of the
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lotteries and gaming, 14 Neighborho
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Area, Kansas and Missouri), 133—1
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income tax provisions for child car
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