FISCAL NOTE
Date Requested: January 25, 2023
Time Requested: 04:37 PM |
| Agency: |
Health and Human Resources, WV Department of |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2890 |
Introduced |
HB3022 |
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| CBD Subject: |
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FUND(S):
0403 Division of Human Services General Administration Fund, 8817 - Child Care and Development
Sources of Revenue:
Other Fund Both General and Other Fund (Federal)
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to require child subsidies shall be based on monthly enrollment rather than daily attendance.
The Department estimates the fiscal impact related to this legislation to be $22,912,396 - approximately $21,424,420 State.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
22,912,396 |
22,912,396 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
22,912,396 |
22,912,396 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Currently, child care assistance in West Virginia is made possible through the Federal Child Care and Development Fund (CCDF) Block Grant. Federal block grant rules require states to set reimbursement rates at a level that supports the fixed costs of providing care:
45 CFR 98.45(l)(2)
To the extent practicable, support the fixed costs of providing child care services by delinking provider payments from a child's occasional absences by:
(i) Paying based on a child's enrollment rather than attendance;
(ii) Providing full payment if a child attends at least 85 percent of the authorized time;
(iii) Providing full payment if a child is absent for five or fewer days in a month; or
(iv) An alternative approach for which the Lead Agency provides a justification in its Plan.
The Department is currently providing Child Care Services by enrollment under ARPA. This Bill would continue paying by enrollment versus reverting to the attendance-based subsidy. The Department covers child care for those residents under 85% of State Median Income (SMI).
West Virginia currently fulfills this requirement by providing full payment if a child is absent for seven or fewer days in a month. Per the January 2020 ACF 801 Report, infants spend an average of 180 days per year in care, toddlers spend an average of 192 days per year in care, preschoolers spend an average of 180 days per year in care, and school age children spend an average of 152 days per year in care. However, paying based on enrollment will increase the number of days paid per year for each child to 260. Because it is not the intent to reduce current eligibility at the 85 percentile of state median income, other funds besides CCDF would have to be secured to offset the cost for this change to the payment structure. This would increase the cost to the subsidy program and result in reduced eligibility for families unless additional State funds are allocated to the program.
Current cost based on enrollment is approximately $7,902,035 per month. Under the previous attendance based subsidy, monthly costs were approximately $6,076,002. This increase of $1,826,033 monthly ($21,912,396 annually) would partially need to be covered by state dollars as it would exceed the Department's regular CCDF federal funding by $20,424,420. If child care subsidies based upon enrollment are to be continued to the population under 85% of SMI after the public health emergency, the cost indicated would revert to State funding. However, if the intent is to remain within current funding, eligibility criteria would need to be revised, resulting in a significant number of families losing benefits.
Programming changes to existing data systems to enable payments may lead to an additional impact with estimates between $500,000 to $1,000,000.
Memorandum
Other issues become apparent with this change. Currently, CCDF regulations prohibit paying two providers for the same hours and service period or during the hours when public school is open and available to the child. Paying a provider based on enrollment would violate the requirement that services not be paid for when public school is available. Because many parents participate in work activities that are considered “nontraditional” (i.e. working at night or during the weekend) the system would have to be restructured to allow providers to only accept one certificate per slot, whether the child attends or not.
This change could cause a waiting list for child care services to occur. West Virginia currently has no waiting list and a very prompt approval process for parents that meet eligibility guidelines. A waiting list would require additional staff to maintain and manage the waiting list. A waiting list would also represent a hardship to parents entering or currently in the workforce.
Person submitting Fiscal Note: John Jackson
Email Address: DHHRBudgetoffice@wv.gob