Ohio will receive more than $1 billion in additional funding for child care from the latest federal COVID relief package, and some advocates want state leaders to put part of it toward expanding the number of families eligible for publicly funded child care.

Various sources estimate the American Rescue Plan (ARP) will provide Ohio in the neighborhood of $800 million for “stabilization grants” to help child care providers address fallout of the pandemic -- increased operating costs from COVID protocols and lower enrollment, among other effects -- as well as about $500 million in Child Development Block Grant funds for child care. There’s also a relatively small, ongoing increase of about $18 million per year in federal child care funding.

With an initial income threshold for subsidized child care that’s near the bottom among states and a need to help more families enter or rejoin the workforce, Ohio should use the block grant funding to expand eligibility, said Lynanne Gutierrez, assistant director and legal counsel at Groundwork Ohio, an advocacy organization focused on early childhood issues.

“We think it has to go to expand eligibility. Families need help. Families need to go to work,” she said.

Families can enter the publicly funded child care system if they earn up to 130 percent of the federal poverty level. Gov. Mike DeWine proposed in his biennial budget plan to increase that to 138 percent, or 150 percent for families of children with special needs. Groundwork and other organizations want Ohio to increase eligibility to 200 percent, as proposed in bipartisan legislation from Reps. Andrea White (R-Kettering) and Mary Lightbody (D-Westerville), HB145. The legislation is up for proponent testimony Thursday in the House Families and Aging Committee.

Before the pandemic reshaped daily life, Groundwork organized the launch of Ready, Set, Soar Ohio, a coalition of dozens of education, health and child welfare organizations with a set of early childhood policy priorities that included expansion of child care eligibility to 200 percent of poverty. (See The Hannah Report, 2/26/20.)

As a comparison point to the size of the ARP’s block grant funding, Gutierrez said an estimated $54 million over the next two years could increase eligibility to 150 percent for all families.

“It was already operating as a disincentive to work, so we really need to raise the floor of eligibility to get more families access and create the pipeline for additional child care capacity in the state, and be able to target resources in areas where we already know we’re lacking capacity,” Gutierrez said.

Ohio is supporting its publicly funded child care program with a significant share of the state’s Temporary Assistance for Need Families (TANF) funding, including use of a TANF reserve fund built up over years but set to be exhausted by the end of the coming biennium. Former Ohio Department of Job and Family Services Director Kim Henderson had told a House budget subcommittee the projected shortfall in child care funding is $289 million in FY24 and $350 million in FY25. (See The Hannah Report, 3/4/21.)

“The truth is, since the last recession, even when we’ve had the money, we’ve not made this a priority, and it put us in a really poor position going into the pandemic,” Gutierrez said.

“The bottom line is, this has to be a priority. The feds cannot save us. We can’t deregulate our way out of this. We need more state investment,” she said.

Gutierrez said she would not recommend using authority in the ARP to expand eligibility to groups of workers deemed essential regardless of income. “We just have far too many families that don’t have access to be delineating between sectors,” she said.

Gutierrez said quality must be a focus in any expansion, given how much is known now about early brain development. Moreover, she said, providers have been making business and program decisions based on the progression of Step up To Quality (SUTQ) rating requirements -- all programs must have a three-star rating by 2025 to qualify for funding -- so halting that progression would be disruptive to their operations.