You asked for information about preschool and child day care programs. Specifically, you wanted (1) background information on the state’s school readiness, Head Start, and Care 4 Kids programs, including subsidies for welfare recipients, and spending for each; (2) data showing the demand for these programs and the capacity of the state’s preschool and licensed child day care programs to serve these families; (3) background information on the federal child care block grant, and (4) information on other states’ universal preschool programs. You also asked us to identify states that have been particularly successful in getting employers to offer on-site child care.

Please refer to OLR Report 2003-R-0821 for information regarding item (4).

SUMMARY

The Department of Social Services (DSS) and State Department of Education (SDE) are the state’s lead agencies for early childhood development programs, including school readiness, Head Start, and child care subsidies (Care 4 Kids). The Department of Public Health (DPH) regulates licensed child care facilities.

Connecticut's school readiness initiative, enacted in 1997, includes grants to towns for the provision of school readiness slots for children residing in the poorest parts of the state. The initiative also addresses

Head Start is a 30-year-old federal preschool program for low-income three-to-five year-olds. It aims to give children the social competence to succeed in school and to help their parents to contribute to their children’s education. The program is funded primarily by a federal grant, but these funds are supplemented by a state grant. In FY 2003, Connecticut had 26 Head Start programs serving over 6,500 children. The state expects to spend roughly $ 4. 5 million on these programs in 2004-05.

The Care 4 Kids program has also been serving Connecticut’s lower income families for the last 30 years. Within available state appropriations, it provides subsidies for families whose income does not exceed 50% of area median income. The program gives first priority to families receiving Temporary Family Assistance (TFA) and transitional benefits, which go to families transitioning off that program. Subsidies are generally available until children reach age 13. DSS data shows that during the last five years, more subsidies have been used for licensed child care slots versus unlicensed care. The primary funding source for this program is a federal block grant called the federal Child Care Development Fund. Regulations governing the block grant provide certain design parameters for states and require a state expenditure plan every two years.

During the last five years, state spending on school readiness and Head Start programs has generally risen, while spending on the Care 4 Kids program declined by almost 40%. The main factor behind the spending drop was the closing of enrollment in the latter program. PA 04-258 reopens that program and DSS estimates an increase in that program’s expenditures in FY 2004-05. Table 1 illustrates the spending in all three programs during this period.

Table 1: Spending on School Readiness, Head Start, and Care 4 Kids

(FYs 1999-2000 through 2004-05 (est. ))

Source: Office of Fiscal Analysis (2004)

Current data suggest that about half of Connecticut’s 225,000 children under age five (as of 2000) can be accommodated in existing licensed child care slots. Licensed day care centers, group day care homes, family day care homes, Head Start programs, and nursery schools can serve approximately 23,000 infants and toddlers and 96,000 preschoolers. Most towns have the capacity to serve about half of their under five population, but larger cities and smaller rural towns have less capacity.

We could find no data that analyze the demand for day care services in Connecticut and the potential to expand licensed capacity. About 90% of licensed slots are currently utilized. Vacancy rates vary widely among the various types of care and age groups. For example, the vacancy rate in nursery and Head Start programs is a negligible 0. 3%, while nearly 25% of the family day care slots for preschoolers are unfilled. The state’s Child Care Infoline received over 20,000 service inquiries in FY 2004; 35% of these were for infants and 40% for preschoolers.

Research suggests that no state has been particularly successful at getting employers to provide on-site child care. Nearly half of the 50 states offer business tax credits for this purpose, but few businesses have claimed them. A few states have tried alternatives to encourage employer involvement, including local partnerships, but we do not know whether they have been evaluated. A 2003 report on the relationship between business and early child care, Business and Early Child Care and Education: A Review of Engagement Strategies and a Connecticut Case Example (copy attached), offers some strategies.

SCHOOL READINESS PROGRAMS

History

States began to create preschool programs for children in poverty or otherwise “at risk” in the mid-1960’s. Forty states funded preschool programs in 2001-2002. For a more detailed discussion of preschool programs in the United States, see the 2003 State Preschool Yearbook produced by the National Institute for Early Education Research.

Connecticut began to fund school readiness programs in 1997, with the launch of a comprehensive school readiness initiative. Public Act 97-259, An Act Concerning School Readiness and Child Day Care established a grant program jointly administered by the Department of Education (SDE) and the Department of Social Services (DSS) to provide spaces in accredited school readiness programs for eligible children in Connecticut’s poorest schools and school districts. The initiative includes comprehensive services to preschoolers, staffing requirements, program evaluation requirements, and facilities financing.

Funding

School readiness funds go to two kinds of school districts: priority school districts, which are the most economically and educationally needy districts in the state, and districts with priority schools. Priority schools are schools that draw students from low-income areas of nonpriority districts.

Priority school districts (or former priority school districts) receive a grant allocation for spaces for eligible children based on a formula. Priority schools (or former priority schools) apply for funds through the competitive grant program. The town or regional school district where the school is located may apply for a grant in an amount not to exceed $ 107,000. The chief elected official and the superintendent of schools jointly submit a plan for the expenditure of the funds. Recent legislation extended the competitive grant program to towns that are among the 28 poorest in the state, but are not considered priority school districts.

There were 6,174 three- and four-year old children attending School Readiness programs in FY 2002-03 (2003 State Preschool Yearbook).

Attachment 1 gives a breakdown of SDE’s school readiness expenditures from FYs 1999-2000 through FY 2004-05 (estimated).

Program Requirements

The law requires each participating town to establish a School Readiness Council to make recommendations on issues relating to Head Start, including the application of school readiness grants and the evaluation of programs. School Readiness programs may be offered by public schools, child day care centers, or Head Start programs. Programs must be accredited by the National Association for the Education of Young Children (NAEYP), approved by Head Start, or meet the criteria established by the education commissioner.

Program types include full-day/full year, part-year/part-day, school-day/school-year, and extended-day. At least 60 %of the spaces in a priority school district must be full-day/full-year slots. In the priority school enrollment area, there must be a minimum of 15 full-day/full-year slots.

Preschool age children residing in the priority school district or area served by the priority school are eligible to enroll in these programs. At least 60 %of the children enrolled must be at or below 75 % of the state’s median income. Additionally, a program may elect to reserve 5% of its spaces for five-year olds eligible to enroll in school if they have been in a school readiness program for one year. Programs charge fees based on the DSS School Readiness Sliding Fee Scale, and Child Care Subsidy Certificates are available from the Child Care Assistance Program.

Staff Qualifications

As of July 1, 2004, the law requires that there be a person in each school readiness classroom with at least one of the following:

• a credential from a commissioner-approved organization plus credits in early childhood education or early childhood development (12 credits as of July 1, 2005); or

• an associate’s or four-year degree with 12 credits in early childhood education or early childhood development; or

• a teacher certification with an endorsement on early childhood education or special education.

Facilities

The Connecticut Health and Educational Facilities Authority (CHEFA) provides funds for renovating and constructing early child care and education facilities. It can issue bonds and lend the proceeds to municipalities, local and regional school boards, regional educational service centers, and other participating qualified nonprofit organizations for acquiring, building, improving, expanding, furnishing, or equipping facilities to provide educational programs for three- and four-year-olds, including school readiness and Head Start programs.

HEAD START PROGRAM

Head Start is a federal program providing comprehensive developmental services to preschool children from low-income families. It started in 1965 on the recommendation of a panel of child development experts convened in 1964 to draw up a program to help communities meet the needs of disadvantaged pre-school children. Initially, Head Start was an eight-week summer program administered by the Office of Economic Opportunity. The program was transferred to the Department of Health, Education and Welfare (now the Department of Health and Human Services) in 1969.

The program is currently funded and overseen by the U. S. Health and Human Services Department and administered and operated by local community action agencies, school districts, and other nonprofit agencies. In Connecticut, it primarily serves children aged three to five. (Another program called Early Head Start serves younger children. ) In addition to federal funding, Connecticut provides a state Head Start program grant to federal Head Start grantees for (1) establishing extended- and full-day, year-round programs or expanding current programs to full-day, year-round programs; (2) enhancing program quality, and (3) serving more children (CGS § 10-16n).

In FY 2002-03, Connecticut had 26 Head Start programs serving 6,528 children. The average per-pupil cost for FY 2002-03 was $ 7,520 (see Attachment 2 for a list of programs and funding levels in FY 2002-03).

Target Population

Head Start is aimed primarily at children aged three to five with family incomes at or below federal poverty levels, but up to 10% of the children may be from families whose income are above these limits. At least 10% of the children served must be children with disabilities. The program also serves families of Head Start children.

Services and Goals

Head Start programs provide comprehensive health, nutritional, education, social, and other services. Its purpose is to (1) improve children’s “social competence” in dealing with their environment and preparing them for school and (2) support and improve parents’ effectiveness in dealing with and advocating for their children. Head Start can operate as center-based programs, which provide services primarily in classroom settings; home-based programs, which provide services primarily in the child’s home; or as a combination of the two.

Head Start has three main goals:

1. to increase opportunities for children who participate in preschool education and to give the children access to comprehensive health and development services;

2. to increase parents’ participation in the workforce, job training, and educational opportunities; and

3. to strengthen parents’ role and allow them to participate in their children’s education and development and to meet their own goals.

Staff Ratios and Qualifications

Federal law requires at least 50% of the Head Start teachers in center-based programs to have an associate, bachelor, or graduate degree in early childhood education or a related field and preschool teaching experience. Teachers who do not have these credentials must have a Child Development Associate (CDA) credential or a state preschool teacher certificate that meets or exceeds the CDA requirements.

To receive a CDA, a person must show he or she can (1) meet the specific needs of children and (2) work with parents and other adults to nurture children’s physical, social, emotional, and intellectual growth in a child development framework. The credential is awarded for three child-care settings: (1) center-based, for which candidates receive endorsements to work with infants and toddlers or preschool children; (2) family child care; and (3) home visitor.

Each center-based program must employ two paid staff (a teacher and a teacher’s aide) for each class. Wherever possible, each class must also have a volunteer. Programs must provide pre-service and in-service training opportunities for paid staff and volunteers to improve their job-related knowledge and skills.

The average Head Start teacher earns a salary of $ 21,000 annually, according to the National Institute for Early Education Research.

Table 2 gives a breakdown of Head Start spending from FYs 1999-00 through 2004-05.

Source: Office of Fiscal Analysis (2004)

CARE 4 KIDS

For more than 30 years, the state has subsidized child care for families. The state extended this assistance to private child care facilities beginning in 1974 when the legislature permitted the then-Department of Community Affairs (subsequently Department of Human Resources (DHR) and now DSS) to purchase services from privately owned day care centers. The services had to be provided to children who were economically, socially, or environmentally disadvantaged and could not cost more than the average prevailing cost per child in state-funded day care centers (PA 74-206).

Originally dubbed the Purchase of Services program, Care 4 Kids has undergone many changes. The 1980s saw increases in the program’s income limits for eligibility and the types of providers. In 1986, the types of child care that could be purchased was expanded to include group day care homes, family day care homes, providers working in a child’s home, and relatives. In 1987, services could be purchased from a relative of the child if the care was provided in the relative’s home. The legislature also raised the eligibility limit from 45% of state median income to 55%, removed the requirement that services be provided to disadvantaged children, and required the level of payment to be based on family income (PA 87-412). Program income limits were raised again in 1988 to 70% of state median income. Also that year, the legislature allowed the commissioner to provide subsidies for child care directly to the parents instead of the providers.

The legislature reversed gears in the early 1990s. In 1991, the program’s income limits were reduced. PA 91-292 lowered the initial eligibility limit from 70% to 50% of median income (once eligible, families can earn up to 75% of median without losing the benefit), but grandfathered the children in higher income families until they reached school age. More criteria were added for determining subsidy levels, such as the child’s age and special needs, type of care, and geographic rate variations. And it required DHR to establish a priority intake system, giving first priority to children in families with gross income less than 25% of state median income. The following year the legislature allowed the commissioner to raise the limit up to 75% of the median.

Over the years the state has closed enrollment due to budget constraints. PA 04-258 opened it again but continues to require it to operate within existing appropriations. (This same law made working families whose TFA benefits were discontinued not more than five years before they apply for a child care subsidy a priority group for the subsidies. And it codifies a regulation that makes TFA families who are working or are engaged in Jobs First employment activities a first priority for the subsidies. )

Care for Families Receiving Cash Assistance

The 1996 federal welfare reform law strongly encouraged state subsidies for child care by prohibiting states from reducing or terminating cash welfare benefits for single parents who refuse to work because of the lack of affordable child care.

While Care 4 Kids is designed to help all low-income working families, the first priority for subsides is given to families who are receiving cash welfare (Temporary Family Assistance) or are transitioning off this assistance. TFA families who are engaged in state-sanctioned work-related activities can get subsidies. In addition, families with a working parent who have received TFA can continue to get subsidies for two years after they leave TFA.

Although enrollment for Care 4 Kids has been closed several times over the years due to the lack of funds, welfare-related care has remained available. However, PA 03-2 lowered the income limits for continued eligibility from 75% to 55% of statewide median income.

Use of Subsidies—Licensed vs. Unlicensed Care

Recent DSS data shows that there has been a fairly sharp decline in the use of unlicensed care during the last two and a half years and a corresponding increase in the use of licensed care during the same period. DSS reports the same trend with respect to the active TFA population. (We are trying to graphically depict the data and will forward it as soon as possible. )

FEDERAL CONTEXT—CHILD CARE DEVELOPMENT BLOCK GRANT (CCDBG) AND CHILD CARE DEVELOPMENT FUND (CCDF)

Congress passed the Child Care Development Block Grant provisions as part of the 1990 budget reconciliation act. The provisions, which provided the state with additional federal funds, required states to spend 75% of their block grant allocation on improving the quality and affordability of child care, with the remainder on activities to improve quality and increase availability of early childhood development programs and before- and after-school care services.

More recently, as part of the 1996 federal welfare reform legislation (the Personal Responsibility Work Opportunity Reconciliation Act (PROWRA)), Congress passed new child care provisions and appropriated additional child care funds, consistent with the law’s overall goal of making families self-sufficient sooner. These new funds were to be subject to the CCDBG act, which the 1996 act reauthorized. Since PROWRA required all of the child care funds to be administered as a uniform program, the federal oversight agency named the combined funds the Child Care and Development Fund (CCDF), which today is the principal source of funding for Care 4 Kids

Child Care Development Fund

As a condition of receiving the federal CCDF funds, states must submit two-year plans showing how they will spend the funds in compliance with CCDF requirements.

Spending Parameters. CCDF actually comprises three separate funding streams (or four if a state elects to transfer some of its Temporary Assistance of Needy Families (TANF) funds for child care) and additional state funds. Under this structure, each state qualifies each year for (1) a share of an amount of discretionary federal funds (subject to annual Congressional appropriations); (2) a share of mandatory funds, which represents the amount of funds the state received from a set of federal child care programs at a base period in time; and (3) matching federal funds, if the state maintains its level of funding at the time of the base period and commits to additional state funds to draw down the matching funds.

CCDF allows states to spend no more than 5% of their total funds on program administration, and requires them to spend at least 70% of their mandatory and matching funds to meet the child care needs of families (1) receiving TANF-funded assistance, (2) who are attempting through work activities to transition off TANF, or (3) who are at risk of becoming dependent on TANF. This latter criterion gives states a good deal of latitude in deciding whom to serve. Additionally, states must spend at least 4% of their CCDF funds on “quality” activities. Of the remaining funds, states must spend a substantial portion on providing child care services for low-income working families.

Program Eligibility. The CCDF establishes outer limits for program eligibility but states are not required to reach them. The law states that families can qualify for services if their income does not exceed 85% of state median income for the family’s size but most states’ income limits, including Connecticut, do not go that high. And it prohibits states from providing assistance for children over the age of 12 (unless they have a disability). (The Center for Law and Social Policy (CLASP), a progressive think tank, estimated in 2000 that only about 10% of “eligible families” were being assisted under the program, while the Children’s Defense Fund in 2002 put this figure at one in seven or 14%. )

Other Features. The regulations also include a provision allowing states to create waiting lists when they lack adequate funds for all who may be eligible, establish payment rates for providers, and establish a sliding fee scale to determine the family share of the cost of care. But states must also adhere to two important principles of the federal law that can affect how they set the program’s parameters: equal access and parental choice. For example, the U. S. Department of Health and Human Services (HHS), which oversees the law’s implementation and promulgates its regulations, has deemed a state’s payment rates sufficient to promote equal access if they are set at a level no lower than the 75^th percentile of the local market rate. And a family’s co-payment should not be more than 10% of income to be considered affordable. (Although apparently neither standard has actually been promulgated in a regulation. )

Parental choice means that a state’s CCDF plan must include assurances that it will not restrict parental choice. The regulations give examples of how choice could be restricted, including expressly or effectively excluding any category of care, type of provider, or any types of provider within a category.

Interestingly, the CCDF law does not specify what the services should look like, unlike Head Start, which has numerous federal requirements relating to education, health, parent involvement and social services. But the regulations include provisions that ensure the health and safety of participating children.

With respect to providers, the CCDF regulations require them to be

1. center-, group-, or family home-based, or in-home care that is licensed, regulated or registered or

2. someone who is 18 or older who provides child care services only to eligible children who are relatives and who complies with any applicable requirements that govern child care provided by the relative involved.

Comparing and Contrasting CCDF and Head Start

In addition to the differences in CCDF- and Head Start-funded services described above, CLASP also notes other important differences between the two programs. These are in the area of performance monitoring, staffing, and facilities.

CLASP asserts that the CCDF gives the federal government a “minimal” role in monitoring state performance, in contrast with Head Start. CCDF regulations authorize HHS to monitor CCDF-funded programs for compliance with the federal law, but impose no specific frequency schedule for such monitoring.

With respect to staffing, federal law places no requirements for educational or other qualifications of provider staff, although states can impose them, subject to the constraints of parental choice. Head Start, conversely, requires states to set aside 2% of funding for training and technical assistance.

And while Head Start allows money to be used for construction of facilities, CCDF regulations expressly bar states from spending funds for purchasing or improving land, or purchasing, constructing, or permanently improving of any building or facility. This bar applies to state or local agencies and nonsectarian agencies and organizations. But funds can be spent for minor remodeling and upgrading facilities to ensure that providers meet state and local care standards.

DAY CARE CAPACITY AND DEMAND

Current capacity data suggests that about half of Connecticut’s children under age five can be accommodated in existing licensed child

Capacity

In 2000, there were nearly 225,000 children under age five in Connecticut. The state’s day care centers, group day care homes, family day care homes, nursery schools, and Head Start programs currently can accommodate just over half—119,000—of these children. Combined, they can serve 23,000 infants and toddlers and 96,000 preschoolers. Nearly half of the preschool slots (46,000) are in nursery schools and Head Start programs. (This data comes from a fall 2003 survey of child care providers conducted by the United Way of Connecticut Child Care Infoline. )

Infoline data from individual towns mostly reflect this 1: 2 capacity to population ratio, that is child care facilties in most towns have the capacity to serve about half of their children. The exceptions are New Haven and Waterbury and the smaller towns like Lyme, North Stonington, and Goshen, where the ratio is far below the state ratio, and the larger, more affluent suburbs like Farmington, Glastonbury, and Westport where the ratio exceeds the state’s. Among major cities, New Haven and Waterbury have significantly lower than average capacity ratios (see Attachment 3).

The Department of Public Health (DPH), which licenses centers and group and family day care homes, reports that these operations can serve about 122,000 children, but this figure includes school age children. DPH does not break down capacity categories in the same terms as Infoline. It shows that centers and group day care homes can serve about 19,000 infants and toddlers, while family day care homes can serve about the same number of preschoolers. But it does not report on centers’ preschool capacity or family homes’ infant/toddler capacity (see Attachment 4).

Demand Data

We could find no single source of child care demand data. But two sources provide indirect data: the Infoline annual survey includes vacancy data and a separate Infoline report tallies, by town, the calls its child care hotline receives for day care services and information.

The 2003 survey data indicate that more than 90% of child care slots statewide are filled. But wide variation in vacancy rates exists among the various types of care and age groups. The vacancy rate in nursery and Head Start programs is a negligible 0. 3%, while nearly 25% of the family day care slots for preschoolers are unfilled. The vacancy rate for infants and toddlers in day care centers and group day care homes is 10. 1%, the rate for preschoolers in those facilities is 8. 5%, and the infant/toddler vacancy rate in family day care is 18. 4%. Licensed family day care homes appear to be an underused resource.

These variations appear even greater at the local level. In larger cities, for example, Bridgeport shows nearly no nursery school vacancies while the vacancy rate for both infant/toddler and preschool slots in family day care in Hartford and Bridgeport exceeds 30%. Day care centers in cities have few vacancies; rates range from 2. 6% (preschool in Stamford) to 6. 3% (infant/toddler in Bridgeport). The variations are similar, although not as dramatic, in large suburbs, like Hamden, Manchester, and West Hartford. Vacancy rates in centers there ranged between 2. 8% and 15. 1% while family day care vacancies ranged between 13. 9% and 25%. In smaller towns (e. g. Derby, Stafford, and Winchester), vacancy rates varied tremendously, even for the same type of care. Winchester’s infant/toddler rate in centers was 2. 7%; Stafford’s was 30. 6%. Family home preschool vacancies ranged from 13. 8% in Winchester to 25. 5% in Derby. Nursery school and Head Start vacancies in all nine communities are low; Winchester’s 12. 5% rate is the highest, while five towns have no vacancies.

Calls to Infoline for day care information is the other indirect demand measure. In FY 04 Infoline received over 21,000 calls. Over 40% were for preschool age care, and almost 35% were for infant care. As might be expected the largest number of calls came from large cities (although only 635 calls came from Stamford). And some mid-size towns like Bloomfield, Derby, Manchester, and West Haven showed a substantial number of calls relative to their child population. Attachment 5 shows the calls received during FY 04, by age group and town.

The number of calls to Infoline for services to infants, toddlers, and preschoolers has dropped steadily during the past four years. In FY 01, it reported receiving over 26,000 calls for these services. This number dropped to 23,400 in FY 02 and 22,700 in FY 03. Calls for infant/ toddler services dropped significantly during that period (20%), while calls for preschool services held steady.

INCENTIVES FOR EMPLOYERS TO OFFER CHILD CARE TO THEIR EMPLOYEES

States have tried a number of different strategies to get more employers to offer on-site care or subsidize their employees who seek outside child care services. These have met with mixed success. The most widely used one has been tax credits, which have been around for some time but have not proven overly successful, according to a recent study. Other initiatives include different regulatory requirements for on-site care and government-business partnerships.

Tax Credits for Employer Investment in Child Care

State Credits. Although 28 states had enacted tax credits for employers who assisted their employees in obtaining child care in 2002, a recent study suggests that they are underutilized when compared to the total number of corporate state tax filers and may not offer enough of an incentive to get more employers to provide on-site care. The Little Engine That Hasn’t: The Poor Performance of Employer Tax Credits for Child Care, published by the National Women’s Law Center (NWLC) (http: //www. nwlc. org/), examined 20 states’ credits for which data was available. It found that in 16 of these, five or fewer corporations out of tens of thousands of corporations that filed state tax returns had claimed the credit, and in five of these, not one corporation filed a claim.

The study tried to determine why utilization was so low. It looked at how the credits were structured, specifically, their size, scope, and reach. Although one would expect that the more generous and far-reaching the credit, the more employers would use it, the study found no strong correlation and suggested that other factors might be influencing an employer’s decision to offer a child care benefit, such as the concern that the benefit would only benefit a small portion of the company’s workforce and the legal liability associated with offering child care assistance in any form.

Recognizing that many policy makers still believe that tax credits are the best incentive, the study offers policy makers cautionary notes. For example, they refer to a “crowd-out” effect, which means that states may set aside a certain amount of funding for such credits while possible short changing other programs that might benefit low-income families even more, such as direct subsidies.

We have requested but have not been provided with any utilization data on the federal tax. But the NWLC report posits that the same problems that may plague the state credits could apply to the new federal credit as well. And it points out that in 1997, less than 2% of all corporations owed at least $ 150,000 in federal taxes, and 60% of filers owed no taxes, suggesting that few employers could take full advantage of it.

Other Incentives

The NWLC study highlights a few states’ programs as alternatives to traditional employer tax credits and suggests that they may offer greater incentives to prospective employers. They might have greater appeal for a number of reasons, including being broader in scope and available to many more taxpayers. And the pooling of resources in two states’ programs gives states more control over how assistance gets distributed.

The NWLC report cites Colorado’s child care contribution credit, which is available to anyone or any corporation that makes a monetary contribution to promote child care in the state. The credit equals 50% of the contribution and is limited to $ 100,000. Although no credit is made to donors who receive something of value in exchange for the contribution, companies that contribute to a child care center from which its employees get discounted care can get the credit. Although utilization data was not available on this credit, data on a similar, smaller credit that promotes child care in enterprise zones showed that while it was used, the average child care spending by donors was relatively small.

Florida’s Child Care Executive Partnership allows businesses to contribute for their own employees or to low-income families (income below 200% of the federal poverty level). For every dollar an employer, foundation, or local government provides, the state matches it using

A relatively new pilot tax credit certificate program allows Oregon employers to invest in child care. For each dollar contributed to either the state’s Child Care Division or another selected community agency, the state offers a dollar tax credit certificate. The money is pooled at the state level and allocated to nonprofit community agencies and then distributed to child care providers through an application process. The centers that apply for assistance must demonstrate that at least 25% of the families served have incomes 80% or less than the area median income, that their employees have adequate training and will attend required state-run training, and limits fees charged to these low-income families.

In addition to these credit programs, the National Conference of State Legislatures reported in 2000 that a number of states have tried partnerships and other strategies to encourage employer involvement. For example, California law created a new licensing category—employer-sponsored child care centers, and allows certain waivers from licensing requirements. A 1999 Maine law established the Business Advisory Commission on Quality Child Care Financing and requires it to examine available financing and economic development incentives to encourage the development of quality child care and early education. The Nevada legislature directed large employers to conduct a study, if an employee requested it, to assess their employees’ child care needs and to determine whether they should offer on-site care or reimburse employees for child care expenses.

We have attached a copy of a 2000 OLR Report (2000-R-0846), which describes Connecticut’s incentive programs for your additional review. We will continue to research this issue and will report back to you under separate cover.

FYs 1999-2000 to 2004-05

na = not available

Source: Office of Fiscal Analysis (2004)