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December 17, 2018 11:19am

Expanded child care program offers a boost to workforce development in Kentucky

A recent policy change in Frankfort will give a much-needed boost to workforce development in Kentucky by helping more children access high-quality child care and better positioning working parents to move up the economic ladder. Workforce development in Greater Louisville has long been one of GLI’s top policy priorities.

Earlier this month, the Kentucky Cabinet for Health and Family Services (CHFS) announced that it intended to use an additional $42 million in federal grant funding to significantly expand the impact of the Commonwealth’s Child Care Assistance Program (CCAP). CCAP is a state subsidy program focused on assisting low-income working parents afford child care. Approximately 27,000 young children and infants benefit from CCAP in Kentucky.

Thanks to the funding increase, CHFS implemented several important changes to the administrative regulations governing CCAP, but two of them are especially critical for access to quality care and workforce development.

First, CHFS increased the maximum reimbursement rates for providers to the 40th percentile of the market rate. In coordination with other incentive programs already in place, this increase will support more high-quality child care facilities throughout the Commonwealth, including in Greater Louisville. Only 50 percent of Kentucky children enter Kindergarten ready to learn. Increased access to high-quality child care can help raise that number.   

Second, CHFS made a meaningful adjustment to the “threshold for discontinuance,” the income threshold for losing access to CCAP subsidies. Prior to this month’s policy change, a working parent was eligible for assistance if their gross income was at or below 160 percent of the Federal Poverty Level (FPL). For a family of four, this amounts to $40,160 per year. When CCAP recipients go to reapply, their income could only have risen to 165 percent FPL—$41,415 for a family of four. The downside to this approach is that it discourages working parents from pursuing better-paying jobs or accepting wage increases. Under new CHFS policy, initial eligibility is still set at 160 percent FPL, but the threshold for discontinuance will now be 200 percent FPL. Raising the threshold will help to encourage working parents to pursue better-paying jobs and promotions and compete for wage increases—all without the fear of losing CCAP support.  

To develop and maintain a globally-competitive workforce, Kentucky needs smart, targeted policies that support early childhood programming, economic mobility, and labor force participation. CHFS’ updates to CCAP are welcomed regulatory changes that will promote workforce development and stimulate economic growth.

Read more about the funding increase and regulatory changes to CCAP here.