North Carolina lawmakers diverted funds for child care development, leaving thousands without assistance, new report finds

RALEIGH (June 18, 2019) – North Carolina lawmakers have raided federal funds for child care expansion, reducing existing state commitments to early childhood programming rather than fully committing to deliver the highest level of assistance to North Carolina children and their families, according to a new report from the Budget & Tax Center, a project of the NC Justice Center.

With current conference on the final budget between the House and Senate underway, the report shows how critical the decisions will be in the coming days for the state’s youngest children.
In March 2018, U.S. Congress increased funding for the Child Care Development Fund Block Grant (CCDBG)—the primary funding source for child care assistance. According to the report, North Carolina received an additional $74 million in CCDBG funds as part of the expansion, but rather than demonstrate their commitment to affordable quality child care, legislative leaders diverted two-thirds of the CCDBG expansion funding.

Read the full report.

During FY 2019, legislative leaders took $50 million recurring TANF dollars from the child care subsidy program, allocated those dollars to NC Pre-K, and made up for the $50 million cut from the child care subsidy program by replacing it with the new CCDBG funding. Legislative leaders then removed $50 million in state funding from NC Pre-K so that lawmakers could use it for other purposes, the report said.

“The child care subsidy program and investments in child care centers and workforce are critical to advancing family economic security, intergenerational economic mobility, and stronger communities,” said Martine Aurelien with the Budget & Tax Center and co-author of the report. “When supported with public dollars, working parents earning low wages are more likely to obtain and maintain work with child care subsidy assistance, young children are more likely to be placed in quality care settings, and the child care industry is better able to innovate and advance new practices.”

The report documents existing unmet needs across the state — approximately 33,098 eligible children are without child care assistance, the presence of persistent child care deserts, and barriers to enhancing quality through professional development and compensation programs for early childhood workers.

The trend of swapping federal dollars could continue with proposed budgets for FY2020 and FY2021, the report said, as the House and Senate budgets supplant $7 million and $5.4 million of state funding with federal funding for the child care subsidy program, respectively.

“This session North Carolina policymakers have the opportunity to build a child care system that serves more children with quality programming,” said Alexandra Sirota, director of the Budget & Tax Center and co-author of the report. “Legislators must choose to allocate federal funding to the purpose of enhancing access and quality as it was intended and re-commit state dollars to this purpose.”