Tiffany Gale, the owner of Miss Tiffany’s Early Childhood Education House in Weirton, said the state will need to address issues with affordable and available childcare sooner or later. (Photo Provided)
CHARLESTON — There has been much talk of tax breaks and rebates for childcare services in West Virginia, but there is near silence from Gov. Jim Justice and human services officials on actions the state can immediately take to fund an impending funding cliff for child care subsidies.
While Justice and the state Department of Human Services wait to announce whether approximately $23 million will be shifted to the state’s Child Care Assistance program, childcare providers are closing across the state due to the uncertainty of whether the funding will be in place by a Sept. 1 deadline.
“The expiration of these funds is devastating,” said Tammy Cole, Director of Owlet Childcare Center, in an email Wednesday. The Fairmont-based Owlet Childcare Center announced that it was closing its doors in June. The facility served more than 30 children up to age 5.
“We’ve done everything we can to keep our doors open, but without continued support, we simply can’t sustain the rising costs,” Cole said. “The children and families we serve deserve better, and it breaks my heart to know we can no longer be there for them.”
New federal rules that take effect in September require states to provide funds to child care providers based on enrollment at individual facilities instead of attendance. Federal COVID-19 funding for childcare stabilization ended in September 2023. The American Rescue Plan Act allocated $24 billion for child care stabilization, which provided funds based on enrollment instead of based on attendance.
House Minority Leader Pro Tempore Kayla Young is part of a House of Delegates bipartisan task force working on childcare issues. (Photo courtesy of WV Legislative Photography)
West Virginia reimburses child care providers based on attendance. The state Child Care Program through the Bureau for Family Assistance provides financial assistance to working parents or parents attending public colleges to subsidize the cost of family-based child care or licensed center-based child care for families that meet income requirements.
According to past statements by the Department of Human Services, the state will need an additional $23 million to fund child care reimbursements under the new enrollment formula. Without the additional funding, approximately 2,000 child care slots could be gone after September according to the West Virginia Association for Young Children.
Tiffany Gale, the owner of Miss Tiffany’s Early Childhood Education House in Weirton, is executive director of the West Virginia Women’s Alliance. Several groups, including the WVWA and the Association for Young Children, have dropped off petitions urging the governor and state officials to fund the impending cliff, mailed letters and drawings from children to the Governor’s Office, and fundraised to place billboards around the State Capitol Building raising awareness about the issue.
While some conversations have been had between advocates and state officials, there is still no clear sign that DoHS or the governor will ensure the funds are in place to avoid the child care subsidy cliff at the end of the month.
“I think it’s honestly devastating and exhausting,” Gale said by phone Thursday evening. “The governor specifically said that he was going to address the childcare issues, and nothing happened.”
House Speaker Roger Hanshaw said that money is not the only issue affecting childcare centers. Other issues include state regulations. (Photo courtesy of WV Legislative Photography)
ON THE EDGE
State officials and lawmakers were aware that the child care subsidy cliff was coming for at least one year. Several bills were offered during the 2024 regular session of the West Virginia Legislature to address the issue of available and affordable child care.
These included tax credits for for-profit and non-profit for continued operations of child care facilities, an increase in a tax credit for employer-provided child care from 50% of capital and operating costs to 100%, and a bill to create a pilot program to develop for child care cost-sharing where the state, employer, and employee, contribute one-third of the total cost.
These bills – all introduced in the House of Delegates and recommended by the House Committee on Senior, Children, and Family Issues – were never taken up by the House Finance Committee and never made it to the floor. And the Legislature passed a skinny $4.996 billion general revenue budget in anticipation of a possible required spend of $465 million on education that later wasn’t required.
“We knew that the rule was coming into place during session,” said House Minority Leader Pro Tempore Kayla Young, D-Kanawha. “We knew then and we could have fixed it then, but due to all of the budget concerns that didn’t get done.”
Gov. Jim Justice said Tuesday he would be in support of moving $23 million to cover a state child care subsidy shortfall, but did not indicate if he would direct DoHS to make that appropriation. (Photo courtesy of WV Legislative Photography)
While the Legislature could have mandated the use of the $23 million by DoHS for dealing with the child care subsidy cliff during the general session, Justice and human services officials have the power on their own to fund the shortfall without the need for legislative mandate.
During the May special session, lawmakers passed Senate Bill 1001, a bill restoring more than $5 million to the Department of Health and more than $183 million to DoHS. The bill created reserve funds in both departments for the restored funding. It allowed the secretaries of the departments to transfer money out of these new reserve funds to provide money for other line items.
Justice has said several times since the May special session that he would call another special session either in August or later in the fall to appropriate remaining surplus tax collections from the previous fiscal year, pass another 5% cut to personal income tax rates, and pass a child and dependent care credit introduced during the 2024 session.
It remains to be seen if an August special session will occur when lawmakers return to Charleston for legislative interim meetings beginning Sunday, Aug. 25. But House Speaker Roger Hanshaw, R-Clay, said the governor and DoHS don’t need legislative approval to fund the impending cliff.
“I want to make it clear to everybody that there’s not a need for fearmongering here; that DoHS has access to exactly the funds,” Hanshaw said in a phone interview Friday morning. “All they need to do is send a letter to the Legislature informing us that they’ve accessed it and the purpose for which they’ve accessed it… The notion that if we miss an August special session that all the child care facilities in West Virginia are going to close is just false.”
DoHS Cabinet Secretary Cynthia Persily has refused to provide answers to reports on whether her department would move funds to cover the looming $23 million child care subsidy cliff at the end of August. (Photo courtesy of WV Legislative Photography)
But DoHS officials have been silent on the issue, refusing to answer the questions of reporters from multiple outlets. During an event in Charleston Wednesday, Dr. Cynthia Persily, the cabinet secretary for DoHS, refused to answer questions about the funding issue, directing reporters to her communications director, who then asked reporters to submit their questions by email. The department provided no answers by deadline to an email sent later Wednesday afternoon.
Justice, when asked why he hasn’t directed DoHS to appropriate the needed funding during his weekly administration briefing Tuesday, only vaguely suggesting that the issue might be dealt with.
“From the standpoint of the other dollars, I would be an advocate,” Justice said. “This doesn’t happen because we’re in a vacuum. There is still continued work we need to do along those lines and everything. We’ll be absolutely sure that it is being addressed and it is being spent in the right way.”
“I’m frustrated that the Governor’s Office isn’t putting out a clear signal as to how we’re going to deal with child care,” Young said. “The only thing that we’ve heard mentioned is the tax credit and it’s just simply not enough for families in West Virginia and for employers and child care centers in West Virginia to be able to move forward. So, I’m incredibly frustrated. I do think the House has worked well on what we’re looking for but that’s it.”
Hanshaw also said the state could also seek a waiver from the federal government to keep funding the child care subsidy based on the attendance formula instead of enrollment. But Hanshaw said the state does not plan to do that, and it is not clear that waiver would help the state in the near future.
(Graphic courtesy of the WV Chamber of Commerce)
“It is my understanding that the Executive intends not to seek it,” Hanshaw said. “In the very near-term future, we think that the opportunity to even to seek a waiver is going to go away. So, we’re just going ahead right now and getting ourselves in a position to pay based on enrollment rather than attendance.”
HITTING THE BRAKES
According to a white paper being released by the West Virginia Chamber of Commerce, the licensed early childhood education capacity for children under the age of 5 in 46 out of 55 counties was 49% or below.
Cabell, Putnam, Kanawha, Harrison, Upshur, Randolph and Tucker counties had between 50% and 74% capacity, Monongalia had between 75% and 84% capacity, and Mercer County had between 85% and 100% capacity. Looking at the percent under the age of 6 who need but don’t have access to child care, it was more than 30% in 44 out of 55 counties.
“Currently, our system is broken,” wrote white paper author Bryan Dayton, the vice president of policy and advocacy for the West Virginia Chamber of Commerce. “The lack of child care facilities is increasing, and workforce participation is decreasing. Because of the lack of available care, some families are choosing to have less children, many are leaving the state, and others are deciding to have one parent stay at home. The people of West Virginia deserve a network of childcare facilities that is the envy of the nation.”
According to the chamber white paper, the average costs for parents and guardians for child care can be as much as $800 per child per month and cost well beyond the average monthly cost of a mortgage. There are 24 counties that have less than 250 licensed early childhood education slots, with 12 counties having less than 100 slots. And even with available slots, child care centers may not be able to fill all available slots due to staffing issues.
“Using Census estimate data from as recently as July 1, 2023, 5% of our state’s population is under the age of 5, or just shy of 88,000 kids,” Dayton wrote. “That means that if every child under the age of 5 needed access to child care, only 45% would be able to obtain it. While there are obviously no scenarios where 100% of children need access, 45% accessibility is woefully inadequate and leaves thousands of families unable to access care.”
And this has a ripple effect, according to the white paper. Young families are waiting until later in life to have children or not have children at all due to the high costs of child care. And few able-bodied West Virginians are entering the workforce and keeping the state’s labor force participation rates the lowest in the nation.
“Child care really is the workforce behind the workforce,” Young said. “Without people having adequate child care for their kids, they can’t go to work. So, we have really low workforce participation in West Virginia. And a big reason why is the lack of child care. I just can’t imagine shutting more centers due to lack of support when we have the money to do it.”
Hanshaw put together a House task force, which includes Young, to develop ways to expand access to available and affordable child care. This includes looking at easing regulations placed on child care facilities by the state, such as the ratio of staff to number of children and even where childcare facilities are located – an unofficial certificate of need that Hanshaw said was not the intention of lawmakers.
“We’ve also got a team of people looking at the actual rules and regulations around standing up a new child care facility,” Hanshaw said. “We don’t have any formal geographic restrictions. But what we’re told is that the licensing agency in West Virginia takes a bit of an unofficial certificate of need type of process…That’s just not appropriate.”
The West Virginia Chamber of Commerce supported legislation in 2022 – Senate Bill 656 – that provided businesses a 50% tax credit on their corporate net income taxes covering the overall costs of starting a new child care center over a five-year period. House Bill 5052, also supported by the chamber, would have expanded that tax credit to 100%.The governor’s child care tax credit proposal would have provided a credit against the personal income tax in the amount of 50% of the allowable federal child and dependent care credit, effective retroactively to Jan. 1. If passed, the credit could have returned up to $4.2 million to eligible taxpayers according to a fiscal note from the state Department of Revenue.
But while child care advocates and lawmakers are supportive of tax credits for child care, they agree that these credits provide little in immediate help for those struggling to afford child care or the centers that are barely holding on.
“The tax credits are not as helpful as they sound like they’re going to be,” Gale said. “It’s not that I’m against tax credits; I’m for them, but the issue is that the tax credits aren’t going to solve the child care crisis. If we’re going to address the issues, then we have to listen to the people who are experiencing the problem and the people who are experiencing the problem are not talking about tax credits.”
Gale said if Justice, DoHS, and the Legislature don’t address the issues with child care in this state now, it will have to be addressed in the future when lack of child care continues to drive people out of the workforce and into other state and federal poverty programs.
“Even if I’m not hopeful that it’s going to be addressed right now, when programs have to start closing down and parents lose their jobs, and these families are going to have to be on other safety net programs and the state’s going to have to be funding, when parents get their voices involved and businesses get their voices involved, then the Legislature is going to have to listen,” Gale said.
Steven Allen Adams can be reached at sadams@newsandsentinel.com