In response to an unexpected freeze on federal funding, Colorado child care providers and advocates are working diligently to demonstrate compliance with regulations. This decision by the U.S. Department of Health and Human Services (HHS) has raised concerns over the welfare of thousands of families and the state’s economic stability.
Funding Freeze Overview
On January 31, 2023, HHS notified Colorado Governor Jared Polis of a freeze impacting three essential programs:
- Child Care and Development Fund (CCDF)
- Temporary Assistance for Needy Families (TANF)
- Social Services Block Grant (SSBG)
This action follows allegations of fraud concerning the Colorado Child Care Development Fund, which provides critical support for low-income families.
Impact on Families and Providers
The freeze could result in a loss of $91 million in child care funding for the current fiscal year. Approximately 27,000 children, from 18,000 families, stand to be significantly affected. Without these funds, child care providers may struggle to remain operational.
Providers express fears that many could face closure, particularly those in low-income areas where child care options are limited. The situation threatens families’ stability, potentially forcing parents to miss work or seek unlicensed care options for their children.
Economic Concerns
Mathematical implications are severe; Colorado already loses more than $3 billion yearly in unfulfilled income due to inadequate child care options. As federal funds run out, rural regions, with 51% designated as child care deserts, will feel the pinch even more acutely.
State officials assert that a total of 120 state workers could lose their jobs by mid-February due to funding reductions.
Verification and Accountability
HHS has placed Colorado under a “temporarily restricted drawdown” until a compliance review is completed. The department is keen to ensure that federal funds are managed lawfully to reassure families relying on these services.
Currently, the Department of Early Childhood in Colorado administers about $138 million of federal funding annually, which supports numerous families and providers statewide. The CCDF is central to ensuring low-income parents can maintain employment or pursue educational opportunities while their children receive proper care.
Provider Perspectives
Child care operators, like Krystal Gastineau of Cribs 2 Crayons in Aurora, have voiced their concerns over the impending financial strain. Gastineau serves 45 children, of whom 24 receive CCCAP subsidies. Without these families, many centers fear they won’t meet operating costs.
Next Steps and Future Outlook
Governor Polis has emphasized the importance of preserving child care funding, stating that no child should suffer from federal policy repercussions. The Colorado state government is committed to working closely with providers and families as they navigate this challenging scenario.
Advocates urge that Colorado’s current systems of financial oversight already surpass federal standards, alleviating concerns over fraud. Stakeholders remain hopeful that through collaborative efforts, the child care funding crisis can be alleviated, ensuring vulnerable communities do not bear the brunt of administrative actions.
