The growth and disparity is fed by demographics, according to data analysts. And it places a squeeze on parents, providers and the state’s purse.
In 2010, there were 4,149 children being cared for in Butler County with state and federal subsidies, giving their parents time to work, train or find a job. This came with a price tag of $12.9 million.
To qualify for the program, households must make less than 125 percent of the federal poverty guidelines, or up to $2,298 per month. The threshold was lowered from 150 percent earlier this year and 200 percent last year in cost-savings efforts.
But state budget crunchers still had to slash the average payment to providers by 7 percent in an effort to save another $40 million a year.
“(The cuts) definitely had an impact on us,” said Beth Rettich, director of Outreach Daycare at Christ United Methodist Church in Middletown. She would estimate 75 percent of their kids are subsidized.
“As a church-owned day care we reach out to low-income families. We try to work our budget around that,” she said. But the cost of doing business is climbing, she said, and “the staff, their hours may be cut because of it.”
For Youthland Academy, which has locations in Hamilton, Fairfield and Middletown, the state funding is a Catch-22.
Cuts in state reimbursement rates mean a lot less money coming into the business. But as the economy has worsened, Youthland relies more and more on subsidized children. Youthland Regional Director Dawnie Byndon says about 60 percent of children at its 14 Greater Cincinnati locations have subsidized tuition. About 95 percent of the 100 children at Hamilton’s Youthland location on Erie Boulevard are subsidized.
“I think if they cut the county vouchers, we wouldn’t be able to survive,” Byndon said. “We’ve lost a lot of private-paying families due to the rates.”
The $3,109 cost-per-child of subsidized child care in Butler County was seventh in the state and Warren County was 24th, according to an analysis of Ohio Department of Job and Family Services data.
While large corporate centers and those that rely exclusively on subsidized care often charge the public more, Rettich said, Outreach Daycare charges considerably less: $157 a week for an infant — the most expensive category — compared to $196 the state pays in Butler or Warren counties. And she can only bill the state the lower amount that she bills other parents.
Prior to July, the state paid up to $205 a week for an infant in Butler. Rettich said a couple for-profit day cares have shut down because of the decreased subsidy.
“That’s where some of the programs had gotten into trouble; they had raised their rates to the ceiling rate. That’s where they’re really hurting. ... They’re losing income.”
Outreach Daycare can raise its rates a little and still fall below the ceiling, Rettich said.
“The parents here in Middletown can’t afford a big jump,” she said.
At New Life Preschool and Daycare in Fairfield Twp., administrator Sharon Brown also says the price the nonsubsidized parents pay is more important when setting its rates.
“We just accept what Butler County pays,” she said, even if it means losing a little money. New Life has been open since 2008, and it is trying to grow. The program has 45 children now, with about 35 of those receiving subsidies from the state.
“We are lower (in child care rates) than a lot of the other centers in this area, so we basically feel that our prices are comparable to what the state was paying in the first place.”
For instance, New Life charges $140 per week for summer care for school-age children, but only gets back $134.
Youthland was charging close to what the state ceiling was a couple of years ago, but now charges slightly more than the state rates. However, Byndon points out the state’s cuts in rates helped prevent cost increases to nonsubsidized parents because Youthland wanted “to stay in that price range.”
To make up for the losses in funds from the state, Youthland has started accepting infants and toddlers part time, giving parents more pricing options.
“We’re not decreasing anything from our teachers,” Byndon said. “We’re still paying them what we would pay them if the rates didn’t go down. We’re not going to change the quality of care.
“Stuff that isn’t a priority we have cut back as a business. We have venders that we cut back on this last year. Instead of them coming weekly, we changed it to monthly. Different things like Cintas coming in and taking our rugs, exchanging them out. We cut that to once a month.”
Per-child costs have steadily climbed over the past three years.
Butler County’s annual per-child average rose from $2,937 in 2008 to $3,036 in 2009. The statewide average rose from $2,819 in 2008 to $2,961 last year.
The 2010 per-child average was $3,822 in Hamilton County, making it the state’s most expensive. Preble County’s average of $1,509 was 16th least expensive in the state.
“It is driven primarily by the market rate,” said ODJFS spokesman Ben Johnson.
The state pays providers in each county a ceiling based on a market study by the Ohio State University Statistical Consulting Service.
Consulting service director Chris Holloman said the cost of child care is driven up by three demographic factors. One is geography.
“When you look at the map you can see it splits generally along a urban-rural line,” said Holloman.
The other two issues are usage: the age of children being cared for — infants can cost twice as much per week than school-age children — and the number of hours each child is in subsidized child care.
This doesn’t cost Butler County taxpayers any more than other counties, but it means Butler and Montgomery county children cost taxpayers across the state more.
The program is budgeted to receive $421.3 million in federal funding in 2012 and $208 million from the state.
Data/Graphics Reporter Gerald Fullam contributed to this report.
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