Business leaders have listed it among their top priorities for the 2021 legislative session. Lawmakers on both sides of the aisle say action needs to be taken, and during the Business Record’s Jan. 29 Fearless Friday event, it was listed as one of the top challenges facing women today.

Child care. Access. Affordability. The “cliff effect.” It’s an issue seemingly facing just about everyone, and like many issues, it’s one that’s been placed in the spotlight over the past year as the coronavirus pandemic has disrupted our economy, our schools and our families.

Several bills addressing child care issues have been introduced during the 2021 session, and have begun working their way through the legislative process.

Those for whom child care is a constant challenge in their daily lives want to see change that will make their lives easier.

Zahra Ismael and her husband lost their child care assistance and had to pull their young daughter, Safa, out of Oak Academy in Des Moines. They had to find a babysitter or find alternatives, like taking turns watching children with other families. Some of her friends have just opted to quit their jobs and stay home, she said.

“Sometimes it’s just easier to stay at home,” said Ismael, a refugee from Ethiopia. “It’s not enough to pay child care and pay food, it’s not enough to pay for everything.”

Her husband had a job working at a home improvement store, but left the position to return to school in hopes of getting his commercial driver’s license so he can someday make more money.

Ismael, who works at Oak Academy, said change is needed to allow more low-income families to earn more money and still qualify for assistance.

The cliff effect

Under current guidelines, a family of four can make up to $37,990 a year to be eligible for assistance. A family with one child can earn up to $18,502.
Those numbers are based on 145% of the poverty level, and one bill introduced this legislative session would increase income eligibility to 250% of the poverty level. If approved and signed into law, a family of four could earn up to $65,500 a year and still qualify for financial assistance to pay for child care.

The cliff effect comes into play when a parent receives even a small raise or promotion or raise that puts them over the income threshold to qualify for assistance. That means if someone earns a few hundred more dollars a year they could lose assistance and are left to shoulder the burden of the cost of child care, which can be $1,000 a month or more for many people.

Child care is often listed as the most expensive item in a family’s budget, said Dave Stone, advocacy officer for the United Way of Central Iowa.
For some families, Stone said, the solution may be simple but have long-term consequences.

“It becomes a Catch-22,” he said during the Jan. 12 Business Record’s Legislative Forecast panel discussion. “I’m working full time to afford child care to go to work. It’s a chicken and the egg problem. There’s a lot of folks who realize it’s more affordable to stay at home and take care of the kid.

“That would drop a worker out of the workforce and just prevent growth of the skills of that individual.”

Bethany Davis, director of Oak Academy, which is run by the nonprofit Oakridge Neighborhood in Des Moines, said she sees the cliff effect challenge frequently at Oak Academy, where 90% of children enrolled use child care assistance.

Few day care centers in Central Iowa accept that level of child care assistance, she said, forcing many low-income families who make too much to qualify for assistance to either choose to stay home or send their children to in-home centers, possibly leaving children ill-prepared for preschool and kindergarten when they are older, Davis said.

“Nobody can afford it; I couldn’t myself when I had children go through day care, and I’ve actually had people say they’ve asked their employer to not give them a raise because they would lose their child care assistance,” Davis said. “If they lose child care assistance, there are a plethora of problems that come with it.”

The problems can include having to reduce their work hours, or not work at all, or leaving children with people they think they can trust, only to find their children in unsafe or unsupervised conditions.

“It’s a safety issue, and parents are being forced to make that decision because they don’t qualify for child care assistance,” Davis said.
Oakridge Neighborhood sees the challenge firsthand because of the programming it offers. Oakridge provides child care, preschool and after-school programming, and workforce readiness, financial literacy, parenting, citizenship and driver’s education classes.

“I have seen it in a lot of ways, keeping our parents from being self-sufficient and being motivated to reach a little further on their personal goals,” Davis said.

Too often, she said, families who put in hard work to become more self-sufficient, and get a better job and make more money, find themselve worse off because they lose assistance they may still need to make ends meet.
“The detriment of that is their quality of life is not better,” Davis said. “When you lose some of those programs, like food stamps, medical and child care, you’re not having a better quality of life when you’re struggling to make those decisions.”

That led Oakridge to create a scholarship to help families send their children to Oak Academy, because “we’re looking for ways for people to receive quality preschool programming for their kids,” she said.
Ismael, an employee of Oak Academy, was able to receive one of the scholarships at the same level of the $75 a week she was paying for in-home care, Davis said.

Davis said the income eligibility requirement needs to be raised to help more families reach levels of self-sufficiency.

Another change is that more child care centers need to accept more children through child care assistance, which would in turn increase access to quality care, she said.

“There’s very limited centers that take it,” she said.
 
Davis said she has children attend her center from as far away as Ankeny, for example, and having more centers that take more children through assistance would open up more spots in the region.

She also said more education is needed to increase awareness of the need.
“I don’t know that a lot of vendors know what child care assistance really is,” she said. “A lot of people think it’s too much paperwork and they don’t want to deal with it. They just don’t know. If we just taught people the process of accepting child care assistance, made the billing process a little easier, I think all those things would be helpful.”

Budgeting challenges

Kent Johnson, a financial coach for the Evelyn K. Davis Center for Working Families, said he frequently sees that child care is a challenge for those he works with in helping them put together family budgets.

“Oftentimes child care is a large proportion of their expenses, and sometimes it can be prohibitive for a couple to both work full time,” said Johnson, who works with low- to moderate-income individuals. “For a single parent, it can be a real challenge if they don’t qualify for a child care assistance program. It can really tip the scale on the budget sometimes.”

Johnson said if child care is a necessity, he works with people to see where else in their budgets money can be saved. For some, child care can be as much as 40% of a person’s net monthly income.

“We work to make sure in some way that that budget can be sustainable,” Johnson said. “So we talk to them about other areas they can control, which can be hard, absolutely.”

Johnson said he uses a calculator that helps determine how any increase in pay could affect eligibility for various assistance programs.

“Most really want to try and get off assistance and really find ways to be independent, but there’s that tension because they know they have to take care of their kids, too,” he said.

Nichole Gorsline, a single mom who was laid off from her job as a forklift driver because of the pandemic, said child care is a constant struggle. Now that she’s not working, she qualifies for assistance and she continues to send her children — two boys, ages 6 and 3 — a few days a week to keep her spot for when she does return to work.

She wishes things were different and she didn’t have to depend on assistance.

“I don’t want to but I do,” Gorsline said.

Gorsline participates in the United Way of Central Iowa’s CIRCA program, or Central Iowa Returning Citizens Achieve, which offers case management, education and training, personal development, and legal support to reduce the recidivism rate. It also works with employers to better understand the importance and benefits of hiring formerly incarcerated people.

When she was working, making $15.50 an hour and paying $750 a month for rent, she made too much to qualify for child care assistance. She only had enough to cover her basic expenses and too often was forced to make tough decisions between paying bills and buying groceries. 

She hopes that the system changes to consider more than just a person’s income.

“The state should consider someone’s personal situation, not just how much they make,” she said. “Are they a single parent? How much are their other expenses? How much is their rent? How much are their bills?

“I would like the state to think outside the box. This little box we put ourselves in, it doesn’t work anymore,” she said.

Gorsline said even if on paper someone makes too much to qualify for aid, often they are left struggling to make ends meet.

“I feel like [quality, affordable child care] should be more readily available to people who need it but make too much on paper but don’t really make that much,” she said. “I would like people to realize it’s still a struggle out here for some of us who are trying to do the best we can.”