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November 2009

New Funding for Child Care

Millions of working Texas parents depend on the state’s child care industry and will spend an average of $7,440 per family this year for full-time day care services.

New Funding for Child Care - Stimulus funds to aid parents searching for work

By Tracey Lamphere

It’s hardly news that the Leave It to Beaver ideal of family life – one wage earner, one stay-at-home parent who looks after the kids – is ancient history for most Texans. The number of families with a single parent or two working parents means that child care has become an absolute necessity for many.

Parents on The Job

Millions of working Texans need child care services.

Texas Parents in the
Labor Force
Household20072008
Married parents who both work2,327,7582,463,087
Single working parents with children living in the household1,744,3251,692,069

Source: U.S. Census Bureau, American Community Survey 2008

New federal stimulus funding will help ensure that more Texans can afford this vital assistance.

Working Families and Day Care

Recent statistics highlight the need for child care. The U.S. Census Bureau estimates that in 2007, 51.3 percent of married Texas couples had both husband and wife in the labor force, slightly less than the national average of 53.1 percent. And the Annie E. Casey Foundation reports that 33 percent of Texas children lived in single-parent households in 2008, just above the U.S. average of 32 percent.

Millions of working Texas parents depend on the state’s child care industry, and will spend an average of $7,440 per family this year for full-time day care services, according to the Texas Department of Family and Protective Services (DFPS), which licenses and regulates such operations.

That kind of spending has created a significant Texas industry. Employment in child day care averaged nearly 66,000 in 2008. Fortunately, the weak economy has had little effect on the availability of child care in Texas, although some consolidation appears to be occurring.

“We don’t see any empirical data that would suggest the availability of licensed child care has been affected by the current economy,” says Darrell Azar, DFPS communications manager. “But we do see a trend toward having more of the larger day care center operations.” DFPS reports that the total number of child care operations fell from 26,026 in fiscal 2008 to 24,980 in fiscal 2009, but the total capacity of Texas’ licensed child care providers remained stable at just above 1 million.

Care Costs

Day care can account for a substantial portion of family income, with some annual rates for infant and toddler day care surpassing the cost of a year of college tuition. Infant care, the most expensive and most labor-intensive, can cost up to 11 percent of the median annual income of married couples, and 32 percent of the median annual income for single parents, according to the National Association of Child Care Resource and Referral Agencies.

Valerie Bauhofer, association executive for the affiliated Texas Association of Child Care Resource and Referral Agencies, says the state’s climbing unemployment rate is the industry’s biggest concern.

“When a parent gets laid off, they usually have to take their children out of child care,” Bauhofer says.

Recently announced federal stimulus funding, however, will help more Texas parents keep their children in care while they work or look for work.

The Texas Workforce Commission (TWC) provides a subsidized child care program administered through the state’s local work force development boards. The program is available to working parents with children under the age of 13 who meet income and other eligibility requirements.

Phil Warner, TWC’s program supervisor for Workforce Policy and Program Assistance, reports that the subsidized program will receive an estimated $214 million in federal stimulus funds through 2011. Of this, about $36 million will go to various administrative improvements while $178 million will be divided among the local work force boards and provided to eligible families.

Importantly, the stimulus funding will be used to broaden eligibility for subsidized care. The current state program is available to working parents only, but the stimulus funding will be used to provide child care to unemployed parents who are searching for work or attending job training. FN

To search for child care services in your area, visit the Texas Department of Family and Protective Services. Look under the Find Services menu or use the Web site’s search feature.

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