Child care providers: Subsidy not enough

Business owners say new rates for Juneau won't cover their costs

Posted: Thursday, September 18, 2008

For the first time in seven years, the state raised its child-care assistance rates. But home providers say new rates for Juneau don't cover their costs.

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Source: Association For The Education Of Young Children, Southeast Alaska
Source: Association For The Education Of Young Children, Southeast Alaska

"After seven years of no raise, we got a whole $5-a-month raise," said provider Tami Bowman. "People are like, 'Why are there no child care providers?' Because we're not getting paid for it."

The state gets federal money to reimburse child-care providers for kids from low-income families - 5,300 kids statewide at nearly $26 million in fiscal year 2009.

The program is supposed to be a partial subsidy, according to Division of Public Assistance Director Ellie Fitzjarrald. Some states cover some low-income kids completely and wait-list the rest, but Alaska opts to cover everyone partially.

But many Juneau home child-care providers say they've kept their rates at or near state reimbursement rates.

"I know my parents can't afford to go any higher," Erin Ahrens said.

She said those rates don't cover the extra gloves, rain pants, snow pants, boots and other items parents forget or kids lose; the mortgage, gasoline, and fuel oil; the groceries, toys, car seats and everything else in the stuff-intensive business of child care.

Provider Faith Rogers said rising costs compound with a tendency to eat parents' debt.

"We don't know how to be hard-nosed, like other business people," Rogers said. "Most of us can't just look at a parent who can't pay and say, 'You have to pay me.' "

They and others in Juneau are rueful that they low-balled themselves, since the state used their current prices to decide how much to raise its reimbursement rates.

It's a chicken-and-egg problem, according to Bowman.

"We knew they were going to base future rates on the survey, but they were asking us, 'What are you charging now?' What I'm charging now is based on what the state will reimburse now."

Fitzjarrald said that overall, rates went up significantly.

Juneau providers aren't quibbling with all of the new rates. Full-time infant and toddler rates for licensed providers with eight or fewer children rose $43 and $60, to $625 and $613 per month. More troublesome is the reimbursement for preschool-age kids, which rose $5 to $500. Preschoolers are "the number-one age group for licensed home providers," according to Bowman.

The state asked for public comment on new rates earlier in the year, but the final rates for preschoolers released in August were lower than the proposed rates by $45. Providers said they didn't have an opportunity to explain to the state that the difference mattered to them.

Most providers have some children on assistance, said Ed Sasser of Catholic Community Services. The nonprofit agency handles reimbursements for more than 300 children per month in Southeast - not counting Haines, Sitka and Wrangell - and works with about 150 providers.

Providers say the problematic rates might be fixed if the state asked different questions such as how much businesses actually cost to run, instead of how much owners charge.

"That was the most objective thing we had to inform us," said Fitzjarrald of the survey's methods.

She also said the market survey was never intended to be the final word. Her department plans to conduct a second survey, with refined methods, early next year. New rates based on that survey would go into effect in mid-2009.

Sasser praised the department for taking "the right steps to rectify the situation."

But he worried that some providers would have trouble getting through the winter, to next fiscal year, when rates on the new survey would be enacted.

"We can't afford to lose one provider in this town," he said.

In the meantime, Faith Rogers will raise her monthly prices $50, and expects some parents will have trouble paying. This week, Ahrens is interviewing for a part-time second job.

• Contact reporter Kate Golden at 523-2276 or e-mail

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