More Iowa parents would qualify for child care assistance; would have to work more hours

DES MOINES — Iowa lawmakers have advanced a bill that would raise eligibility requirements for child care assistance and child care provider reimbursement rates, while also increasing work requirements for parents of children who qualify for assistance.

While an improvement, Senate Democrats criticized the bill for increasing work requirements, and say the funding still is inadequate to address child care staffing shortages and high costs keeping Iowans out of the labor force.

“Our reimbursement rates are the lowest among all the states surrounding Iowa by a lot,” Sen. Claire Celsi, a Democrat from West Des Moines and former child care provider, said.

Iowa is among the lowest five states in the country for child care reimbursement rates, and has not increased its rates for at least more than a decade, according to the Iowa Department of Health and Human Services.

“The states around us have done a much better job in realizing how important child care is,” Celsi said. “And those other states — most of them — have also raised the minimum wage in the same time period. So we’re just digging a hole deeper and deeper for families in poverty. And this bill, while a big baby step, is not anywhere near adequate in solving this problem.”

Republicans argue the bill will help more Iowa families find affordable child care and return to the workforce, and note Gov. Kim Reynolds has approved more than $500 million in state and federal funding to increase access to child care across the state since the start of the pandemic.

“Fifteen percent is a huge increase,” Sen. Mark Costello, a Republican from Imogene who chaired a subcommittee hearing on the bill, said.

The Senate Appropriations Committee voted Wednesday to advance House File 707, which passed the House unanimously earlier this month, sending it to the Senate for final passage.

The bill would increase income eligibility limits for families with children to 160 percent of the federal poverty level, up from 145 percent currently. That equates to a household income of $48,000 for a family of four.

For a family with children needing special needs care, the income limit would be set at 200 percent of the federal poverty level, or 85 percent of the state median gross monthly income.

The bill also increases child care provider reimbursement rates by $51 per child to $454 per month.

A fiscal analysis by the nonpartisan Legislative Services Agency estimates an additional 1,756 children will qualify for child care assistance on average monthly.

The Iowa Department of Health and Human Services says it intends to use a $107.8 million surplus of federal funds to absorb the estimated $20.7 million annual cost increase from the program changes.

Celsi noted the income eligibility threshold falls far below that established by Republican lawmakers for families to qualify for state taxpayer-funded savings accounts to pay for the cost of sending children to private school.

A student enrolled in a private school with a household income at or below 300 percent of the 2023 federal poverty guidelines — $90,000 for a family of four — is eligible to receive funding for the 2023-24 school year.

“So we’re kicking low-income Iowans in the teeth, as usual, while giving people who don’t need the money free money,” she said. “And that’s state money. That’s right out of the general fund money; not federal money like this. … I just want to point out the hypocrisy of this Legislature, and how our citizens who need the help most are getting short shrift once again.”

Sheila Hansen with Common Good of Iowa, said the income eligibility and reimbursement rate increases are long overdue to help more Iowans enter the workforce, but questioned the impetus for increasing work requirements, noting Gov. Reynolds’ child care task force did not discuss or recommend doing so.

The program provides assistance to the children of income-eligible parents who are absent for a portion of the day due to employment or participation in academic or vocational training.

The bill would modify eligibility rules for receiving child care assistance, requiring that recipients work or participate in an approved training or academic program 32 hours per week, an increase from the current requirement of 28 hours per week.

Kate Walton with the Association of Early Childhood Iowa Area Boards and Advocates said the increased work requirements will make it harder for families to use the program. She noted many working mothers are working part-time, entry-level positions with hours that fluctuate that would make it difficult to meet the requirement.

Sen. Jeff Edler, a Republican from State Center, argued the bill “goes a long way to help Iowa families.”

“When the taxpayer is giving money to expand eligibility, myself, I don’t know that it’s a lot to ask when we’re in a workforce crisis to see if we can get some extra hours out of them,” Edler said. “Let’s leverage the money we’re putting in and try to get productivity back out.

“I see that as somewhat of a common-sense move. If it’s problematic, we’ll have to look at that.”

Costello shared concerns over the work requirements.

“Are we incentivizing mothers to go to work and putting their kids in child care?” Costello asked. “Where, you know, no one loves your kids like you do. … We have to consider that.”

Sen. Janet Petersen, a Democrat from Des Moines, also criticized state officials for “sitting on” $107.8 million in federal money instead of disbursing dollars to help families in desperate need of child care providers, while at the same time “pushing young new moms to work another four hours per week” or lose their child care assistance.

“This bill is not doing nearly enough that we could and should be doing for young families in our state,” she said.

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