Low-income parents face day care crisis as funding runs out
Robin Nordin says the challenges facing her Kiddie Junction Educational Institute in Des Plaines are like a row of dominoes ready to topple.
More than half of the 105 children at the day care center are from low-income families that pay discounted rates for Nordin's services. A long-standing state program picks up the rest of the bill.
But Monday, that state program is set to run out of money. Nordin isn't sure when she'll next be paid by the state, so she says she has to start charging low-income parents full price, a cost many will struggle to afford. Families that now pay $25 a week for child care could face payments of between $250 and $400 a week, Nordin says.
"This is a domino effect," Nordin said. "Parents won't have child care because they can't afford it, and then they'll be out of a job. Then they can't afford rent for their house or apartment, and then they lose their house and end up in shelters."
Lawmakers and former Gov. Pat Quinn approved a budget last spring that left Illinois' Child Care Assistance Program nearly $300 million short of what it would need to last until a new budget kicks in July 1. Now the program's shortfall becomes one of Gov. Bruce Rauner's most immediate budget problems weeks before he's set to give a spending proposal of his own.
The Illinois Department of Human Services sent day care providers a letter this week outlining the problem. The state gets federal money to pay for about half the program's needs, so money won't dry up completely. But with state money unavailable, payments to child care centers will be delayed.
"Because the allocation of federal funding is not enough to pay an entire month, unpaid bills will be carried over to the next month and payment delays will get progressively longer each month," the letter reads.
Rauner's office says "the governor and the legislature recognize that the budget Pat Quinn signed underfunded certain areas and are working together to find a responsible solution."
But the letter suggests day care providers cope with delayed payments until the end of the fiscal year, which is June 30.
"Please try to adjust your bills to accommodate the new schedule," the letter reads. "We know you have financial obligations that will be difficult to honor because of the payment delays. You may show this notice to your creditors so they are aware that the payment from the state is delayed and will be delayed for the rest of the fiscal year."
Adjusting could be tough. About 30,000 child care providers care for about 100,000 families in the program.
If day care providers allow parents to keep paying the reduced rate, they risk having to absorb remaining costs for weeks or months, unsure of when the state will eventually come through. Requiring low-income parents to pay the full rate means taking a chance that they'll pull their children out of day care.
Alejandra Ortiz of Hoffman Estates has two children, ages 4 and 5, in two different child care programs while she works. If one day care center charges her the full rate, she says, her costs will go from $150 per month to as much as $800 per month.
She says she's unsure what each child care provider will do.
Ortiz said she nets about $500 every two weeks from her job, so she'd have to quit to take care of her children.
"Nobody's going to take care of them for me," Ortiz said.
Some employers are concerned, too.
Lisa Savegnago, president of Nameplate & Panel Technology in Carol Stream, says her business is a lean one that could suffer if parents have to be out of work for child care reasons.
"When I've got someone missing, it upsets the apple cart," she said.
When lawmakers approved the state budget last spring, Quinn criticized it as "incomplete," arguing that some of the approved spending wasn't designed to last the whole year. He said he'd try to raise income taxes after being re-elected to help cover the gap.
State Sen. Dan Kotowski, a Park Ridge Democrat and top budget negotiator, says Rauner has a solution. He says there's about $700 million in surplus money in dozens of accounts across state government that could be used to fill the hole. The budget was crafted to allow the governor to transfer some of that money into the state's general checkbook, Kotowski said.
Kotowski said Rauner should transfer the money out of those accounts, which collect money from various fees.
"This is a perfect time to draw from those surplus dollars," Kotowski said.
Rauner has referred to this move in recent weeks, criticizing lawmakers and Quinn for counting the act of borrowing money from other accounts as income. His office disputes Kotowski's opinion, saying in a budget memo that such methods aren't available to fix the shortfall.
"Unfortunately, current law prohibits the governor from using common-sense budget management techniques to ensure the Child Care Assistance Program and other vital services endure for the rest of Fiscal Year 2015," the memo reads.
Meanwhile, child care providers and parents will have to wait and see what officials do -- if anything -- and how long it takes to get done.
Nordin isn't one to sit idle and watch issues that affect her kids pass by without making her concerns heard.
"I sent our yearbook to the governor's office. I don't know who received it, but what I did was I crossed off all the children in every single room that now would not have subsidy, and it's a domino effect," Nordin said.
Rauner has toured the state in recent weeks talking about the state's deep financial troubles but hasn't yet said what he'll propose in his state of the state address coming Wednesday or the budget he's due to present to lawmakers two weeks later.
"In my heart I think the governor will step in and keep kids off the streets," Nordin said. "I thought the governor would come in on a white horse and find money from somewhere."