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Louisville, Ky (WDRB) -- Starting today, thousands of low-income Kentucky families are losing child care help due to budget shortfalls on the state level. Meanwhile, some low income family advocates say it could actually end up costing taxpayers more.
With a $86.6 million shortfall for Kentucky's Department for Community Based Services 2014 budget, the department decided to make major cuts to the Child Care Assistance Program.
With the new income requirements kicking in July 1, low income parents say they are scrambling to find a solution--a solution that some say may include accepting welfare checks instead of working. While daycares say, they too are feeling the hit.
Ceatrice O'Neal of Cuddles to Cuddles daycare in West Louisville says with many of her customers losing state assistance, enrollment is down. With less children to care for, she's already laid off two full time employees since March and is preparing to lay off a part-timer. "I don't even know if a year from now I'll even be in business, because without kids how do you run a daycare?"
She says 98% of the families she serves are low income, and without assistance, child care will eat up more than half their paycheck. At $125 a week per child, Ceatrice says she would like to help families affected by the cuts, but she has to take care of her employees and her business too. "Even if we reduced the price for parents, how are we going to make a living?"
Starting July 1, income requirements for parents in the program changed from 150% of the poverty level--$33,075 for a family of four--to 100% of the poverty level--or $22,050 for a family of four.
According to Executive Director of Kentucky Youth Advocates Terry Brooks, the changes to the program puts Kentucky at the bottom when it comes to federal assistance for low income families. "No state in the country supports families with less money than Kentucky." In fact, he says, one in four children in Kentucky are living in poverty.
Brooks predicts that instead of saving money, the state will actually end up spending more because more low income parents will collect unemployment instead of working and paying increased day care rates. "Suddenly we have created a situation where there is strong incentive for folks who are low income working families now to become unemployed families."
Terry says it won't take long to see the trickle down effect on kids, daycares, and the state's bottom line.
O'Neal fears it may not only put her out of business, but will increase crime in the neighborhood. She says with more kids staying at home un-supervised and less receiving early education, crime rates will likely rise.
Only time will tell, but Brooks says he doesn't predict anything good to come. "It's really a lose, lose, lose situation."