RD469 - Annual Child Care and Development Fund (CCDF) Report – October 1, 2021

Executive Summary:

House Bill 30 (Chapter 1289) of the 2021 General Assembly Regular Session, Item 137 M., directs the Virginia Department of Education (VDOE), in collaboration with the Department of Social Services (VDSS), to prepare an annual Child Care and Development Fund (CCDF) report.

Activities funded by CCDF are critical to the health, safety and well-being of Virginia children and their families. CCDF is the primary federal funding source for Virginia’s Child Care Subsidy Program (CCSP), which helps low-income families access child care while they work or participate in education or training programs. In addition to funding direct services for families, CCDF dollars also support broader quality improvement and supply building efforts for the entire child care system.

In SFY 2021, over 26,000 children participated in the CCSP, a 12 percent decline in the unduplicated count of children served in SFY 2020. SFY 2021 was characterized by significant instability for the child care sector as the COVID-19 pandemic continued to threaten providers and families’ personal health and financial well-being. The Virginia Department of Social Services (VDSS) and the Virginia Department of Education (VDOE) worked together to provide needed policy flexibility and supports to providers and families over the course of SFY 2021, including temporarily waiving copayments, increasing payment rates for Level 1 providers, and increasing the number of paid absence days.

CCSP participation reached a recent low of 14,883 in March 2021--a 33 percent decline in participation from pre-pandemic levels. Soon after, the General Assembly voted to leverage COVID relief funding to expand CCSP eligibility, allowing families in which parents were searching for work to enroll and increasing the income eligibility limits to 85 percent of the state median income (SMI) for families with young children. Taken with other policy flexibility, this expansion in eligibility has contributed to a steady increase in participation in the last few months of SFY2020. As of the submission of this report, more than 23,000 children are enrolled, exceeding enrollment before the start of the pandemic in February 2020. While enrollment declines were observed across all ages and reacial and ethnic groups, some were impacted more significantly than others. See Table 1 on page 2 of the report.

However, the CCSP is still serving Virginia’s most economically vulnerable families, with 55 percent at or below the poverty level and 93 percent below 200 percent of the federal poverty guidelines.

Through September 30, 2024, Virginia has access to an unprecedented level of federal support to provide financial relief to struggling child care providers, expand access to child care assistance, invest in quality supports, and build the supply of child care across the Commonwealth. Projected expenditures and participation levels take these one-time resources into account and assume the state’s efforts to restore the subsidy program are effective. However, it is important to note that the pandemic remains a fluid influence on providers’ operations and families’ need for services. VDOE and VDSS will continue to work closely with key stakeholders to be nimble and responsive to the changing context.

The following sections of the report address:

• CCDF Expenditures
• Program Service Levels (Statewide and By Locality) for:
o Number of Children Receiving Child Care Subsidies
o Number of Providers Receiving CCDF Dollars
o Overall Number of Child Care Providers
o Waitlist for Subsidy Services
• CCDF Annual Report to the Federal Office of Child Care