South Carolina Investing $2.5 Million in Child Care with Limited Family Coverage

In South Carolina, as federal COVID-19 aid diminishes, fewer families will receive assistance with child care costs, with the state replacing only a quarter of the lost funding.

During the global pandemic, the federal government incrementally increased income thresholds, allowing more parents to qualify for federal funds to cover child care expenses. However, this aid is set to expire in approximately nine weeks.

Although state lawmakers allocated several million dollars from state taxes to support the program, the allocated amount is insufficient to accommodate all the parents who benefited from the expanded guidelines.

Based on data provided by Department of Social Services spokeswoman Connelly-Anne Ragley, approximately 2,250 children will no longer meet the criteria for child care scholarships.

These scholarships typically cover a significant portion, if not all, of the annual daycare costs by directly remitting payments to eligible child care providers for each child whose parents fall within the income thresholds.

Prior to October 2020, working parents qualified for federally funded daycare aid if their income was 85% or less of the state median income, translating to $64,063 or below for a family of three in South Carolina.

Beginning from October 2020 until September 2023, applicants had to demonstrate income below 300% of the federal poverty level, which equates to $74,580 or less for a family of three.

The Department of Social Services approximated that an additional $10 million would be necessary to sustain child care expenses for 3,000 children under the expanded eligibility criteria, which the agency’s Director Michael Leach included in the budget request to lawmakers.

In contrast, Governor Henry McMaster proposed $5 million in his budget plan, while legislators reached a compromise by assigning $2.5 million to support scholarships effective from July 1.

According to data from Social Services, this amount is sufficient to provide aid for 750 out of the 3,000 children previously covered.

“Many families expressed disappointment upon receiving news about the expiring funding as they had grown reliant on this benefit,” Ragley mentioned regarding parents’ reactions when informed last autumn.

The duration that the one-year scholarships extend varies based on the application date, and certain families may have already reached the end of their aid. Notably, the expanded eligibility guidelines concluded in September, signaling the termination of the final daycare payments by the end of this September for scholarships granted in September 2023.

Martha Strickland leads First Steps, overseeing the private providers in South Carolina’s full-day preschool initiative catering to underprivileged 4-year-olds. Parents enrolling 4-year-olds in private preschool qualify for child care scholarships to cover the remaining duration of their workday for both their 4-year-old and any younger sibling up to 12 years old, as documented in the Post and Courier.

Strickland recounted a poignant instance where a mother was overwhelmed with emotion after discovering her eligibility for complimentary child care for her children, deeming it “a miraculous solution” for her family.

Despite not securing the full $10 million requested, the Department of Social Services expressed gratitude for the allocated funding and is currently devising updated eligibility criteria for its distribution, as conveyed by Ragley.

“Recognizing the considerable demand from families for child care assistance, we aim to address their needs effectively,” she emphasized.

From October 2020 to July 2023, the agency provisioned over 71,200 52-week scholarships for children of parents meeting the expanded eligibility thresholds, considering children multiple times if they received aid persistently, Ragley explained.

The value of each scholarship varies depending on the child’s age and the rating of the child care facility.

To accommodate children under the scholarships, child care centers must voluntarily participate in South Carolina’s ABC Quality Program and adhere to enhanced health and safety standards beyond the state’s baseline requirements, encompassing thorough background screenings for all staff members.

Ragley underscored the reassurance parents gain by entrusting their children to these facilities while they engage in work or educational pursuits.

In her personal experience as a working mother, Ragley acknowledged the challenges the absence of child care presents, noting that not all parents possess the luxury of supportive family or paid time off to fill this gap.

“The escalating child care expenses might lead some parents to opt for staying home rather than pursuing employment, considering the minimal financial gain after offsetting child care costs,” Ragley commented.

Highlighting the enduring child care challenges exacerbated by the COVID-19 crisis, Ragley emphasized the pressing need for enhanced funding to sustain their programs in the forthcoming state budget and beyond.

The forthcoming budget request is anticipated to incorporate provisions for child care scholarships, wage incentives to attract more professionals to the child care sector, startup grants for emerging centers, and tax benefits for employers offering child care benefits, Ragley elaborated.

In leveraging Georgia as a model, which extends state tax credits to businesses endorsing or sponsoring child care for employees, Ragley underscored the potential benefits of similar incentives for South Carolina employers.

The South Carolina Chamber of Commerce advocated for an update to the state’s existing albeit underutilized tax relief for employers facilitating or funding child care solutions for their workforce, yet this proposition remained unaddressed.

Elsewhere around the nation, Maine is subsidizing child care for individuals earning up to 125% of the state median income, according to the Center for American Progress.

Michigan is prolonging its COVID-19 relief policy by extending subsidies to those at 200% of the federal poverty level.

Minnesota is injecting an additional $252 million for the current fiscal year into its scholarship initiative with a promise of $58.9 million more in the subsequent budget year. Montana is broadening child care subsidy eligibility to encompass individuals up to 185% of the federal poverty level, as noted by the center.