Thirty-seven-year-old Tara Herbert entered a classroom at the Little Flowers Early Childhood and Development Center in West Baltimore, where she’s a teacher.
Five one-year-olds sat around a small table while a movie played nearby. Another teacher was spoon feeding one of the toddlers.
“Yeah, they all sleepy. It’s almost their lunch time,” Herbert said before turning to one of the children. “Whatcha doin’, Noah? Why’s your sleeve wet?”
Herbert’s been teaching here for three years, and she has six kids of her own. Her 1 year old is in the all-day childcare program, and her 4 year old is in the center’s new pre-kindergarten class. Some of her older kids come after school.
The tuition for her 1 year old is the most expensive, at $205 a week. Most of that’s covered by state childcare subsidy vouchers, but she has an $80 copay.
Still, the choice to send her kids to Little Flowers is easy.
“If I stay home and take care of them I — how am I going to take care of them if I’m not working?” she asked. “I don’t have a choice but to send them to childcare, to pay the copay.”
About 80 percent of the families who send their children to Little Flowers receive childcare vouchers, said Crystal Hardy-Flowers, the founder and director of Little Flowers. And that hurts her bottom line.
“Our tuition for an infant is $205, but the childcare subsidy only pays $187. So we just take the loss and we accept the childcare subsidy amount,” she said. “For our 2 year olds, it’s $141, but childcare subsidy only pays $112, so we take the loss and we just take the $112.”
The federal childcare subsidy program, administered by the states, is designed to help low-income families pay for childcare. Without that help, many parents — especially single parents — can’t afford to pay someone to watch their children while they go to work. But Maryland’s childcare subsidy has the lowest reimbursement rate in the country, forcing some families and childcare providers to make tough decisions.
The federal Child Care and Development Block Grant pays for roughly half of Maryland’s childcare subsidy program. To qualify, states must set reimbursement rates based on local childcare costs.
“The federal government recommends that those reimbursement rates, those vouchers, be pegged to the 75th percentile of the market, which is an economic or a statistical way of saying that parents should be able to, with this childcare subsidy and with a co-payment they are required to pay, they should be able to go to 75 percent of the childcare providers in their community and get access,” said Clinton Macsherry, director of public policy at the Maryland Family Network.
Maryland childcare vouchers pay for roughly 10 percent of childcare options in the state.
“We are doing exactly what we're not supposed to do, and we are relegating those low-income families that are participating in the program to the cheapest and by proxy the poorest quality care in their communities,” Macsherry said.
To qualify for the subsidy, a family of three — typically a mom and two kids — must earn no more than $29,900 a year.
But Maryland also has a waitlist for childcare vouchers. Even though a family of three earning $29,900 qualifies for the subsidy, the program only has enough money to pay for childcare for that same family if they earn $23,670 a year.
So while the program serves roughly 13,700 kids, Macsherry said, there are about 4,300 kids on the waitlist.
Many families also have a copayment. A new federal requirement says copayments should be no more than about 7 percent of a family’s income. But according to a recent report by the National Women’s Law Center, a family of three in Maryland living at the poverty level would pay 14 percent of their income.
That’s more than many of the families at Little Flowers can bear, said Hardy-Flowers, including teacher Tara Herbert.
“She doesn't make much money, and the copay is too much for her. So we waive her copay in order for her to stay here,” Hardy-Flowers said.
She said that even when families say they can pay the copay, the childcare center may or may not actually see the money.
Between the lost copays and the vouchers that don’t cover the full tuition, Hardy-Flowers estimated that her childcare center loses about $100,000 a year. And that, in turn, affects how much she can pay teachers like Herbert, making Herbert more likely to rely on childcare vouchers.
To keep the lights on, Hardy-Flowers said she prays.
“I mean we are oftentimes in a deficit,” she said. “We do have very caring landlords who wait and accept the money when we're able to pay it."
And she looks to the community — for donations, used furniture, whatever they can spare.
While it’s easy to point out the program’s flaws, solutions are much harder.
Without more funding, “this is like the proverbial balloon. You know, if you squeeze it one place, it pops out another,” Macsherry said. “So if for example you raised provider reimbursement rates, that probably means you're going to be able to serve fewer people.”
A September report by the state Department of Education, which runs the childcare subsidy program, found that setting reimbursement rates closer to the actual cost of childcare without more funding would result in a freeze of the program, putting most subsidy recipients on a waitlist for the foreseeable future.
The department declined to comment for this story.
State Del. Ariana Kelly, a Democrat who represents part of Montgomery County, said that when she was first elected in 2010, her mother told her that her one job was to protect the subsidy.
“My parents were teenagers. They had children while they were putting themselves through school,” Kelly said. “We didn't have a lot of resources, and it was this subsidy program back in the late '70s and '80s that allowed them to get out of poverty and get educated and build a middle-class life.”
Kelly co-chairs the state legislature’s Joint Committee on Children, Youth and Families, which has been looking at issues surrounding childcare for the last two years.
The report released in September by the state Department of Education was the result of legislation Kelly sponsored with state Sen. Nancy King. That law also requires the department to evaluate every two years whether to raise reimbursement rates.
Kelly said the studies are a first step, but ultimately it comes down to budget.
“What we have been able to determine is that Maryland does not contribute general fund revenues to this program and the other states do,” she said. “In addition to that, Maryland redirects the federal block grant to other very important programs, so we're using less of it for childcare subsidy than other states do."
There’s fairly unanimous agreement that the program is underfunded, said State Sen. Addie Eckardt, a Republican who represents part of the Eastern Shore and sits on the Joint Committee on Children, Youth and Families.
“But we also realize that the two-edge sword on this is that we have increased the cost of childcare by increasing the expectations,” she said.
She suggested that boosting other programs that benefit low-income families — things like making it easier for single parents to collect child support payments — could help families spend more on childcare.
And if the state were to put in more money, Macsherry said, raising the reimbursement rate to the federally recommended level could cost $35 million.