Rural Ohio child care providers, community leaders testify on proposed rate cut

COLUMBUS — Child care providers and community leaders from across Ohio provided testimony before the Senate Finance Committee last week.

More than a dozen representatives of the field gathered in support of a proposed budget amendment to “hold harmless” child care programs in 13 rural Ohio counties — Allen, Ashland, Auglaize, Belmont, Erie, Harrison, Knox, Ottawa, Portage, Preble, Sandusky, Seneca, and Trumbull — who are subject to a proposed rate cut as the Ohio Department of Jobs and Family Services updates its publicly funded child care rates.

The proposed ODJFS rate update was initiated when the federal government put Ohio on notice that its base child care rates were insufficient to ensure access for all Ohio’s children. While much of the effect of the proposed 2018 Market Rate Survey rate methodology is welcomed news, these 13 rural counties will see a rate cut under this proposal, which will create challenges to current providers being able to continue offering quality care to low-income families.

“Ohio’s publicly funded child care rates have been distressingly low – so low that the federal government has placed the state under a corrective action plan requiring a rate adjustment,” said Lynanne Gutierrez, Policy Director and Legal Counsel of Groundwork Ohio. “While we applaud Governor DeWine for using new federal child care dollars to adjust Ohio’s woefully low child care rates, the methodology has a negative impact on many of Ohio’s rural child care providers and the families and children they serve.”

“Our tracking of data shows that over the last biennium we have had a net loss of 16 percent of providers in Ohio’s rural counties as a whole,” Ronald J. Rees, Executive Director, Corporation for Ohio Appalachian Development, said. “In some of our rural counties, the loss has been 30, 40 and even 50 percent. The primary reason for so many centers closing in Appalachia is a rate structure that varies by county and results in a significant variance in rates across the state.

“The rate adjustment proposed for implementation in July results in modest rate increases for some providers and that will improve their chances of survival. But reducing the rates for providers in this already struggling environment will only exacerbate an already serious problem,” Rees said.

“Child care, and especially child care serving primarily subsidized children is a business that operates on slim profit margins,” said Peg Tazewell, Executive Director, Knox County Head Start. “Year to date, even with the increases received in December, my child care operations are in the red. When I calculate outstanding reimbursements due, I am in the black by a margin of 1.8 percent — it’s a fine line, especially for child care programs like ours that provide benefits, including health insurance, to our employees.”