Kids sliding down a tube slide
Getting a bill through the legislative process can be a long, tortuous process. Credit: dadblunders, flickr creative commons


Health advocates sigh with relief at the end of the legislative session if their program is fully funded for another year.

Or is it?

By Rose Hoban

During budget negotiations, lobbyists and advocates for social service programs haunt the offices of lawmakers, begging for each additional dollar for their programs. Then the budget comes and those same people can start planning their program expenditures for the coming year.

Except that …

For at least the past four budget years, state lawmakers have provided “flex cuts” to the Department of Health and Human Services, telling the department to find millions of additional savings in its budgets. The flex cuts are intended to be fulfilled by eliminating unfilled positions, defunct programs and redundancies.

Kids at Lulu's Child Enrichment Center find plenty of entertainment climbing on hay bales.
Close to 77,000 children across North Carolina get state-subsidized child care through Smart Start and the N.C. Partnership for Children. Image courtesy MG+BW

But for Smart Start, those flex cuts have meant additional – often recurring – cuts to programs for children, year after year. Over the past five years, the program’s total budget appropriation has decreased from $210 million in 2008 to $151 million this year.

Add on last year’s recurring $3.7 million flex cut, and Smart Start’s appropriation will be about $147 million – even though the budget document says the program will get $151 million.

Since 2010, fewer and fewer families have been receiving Smart Start’s child care subsidy assistance as those dollars are appropriated by DHHS. In fiscal year 2010-11, 2,804 child care programs served about 84,000 children. By last year, those numbers had shrunk to 2,558 child care programs serving about 76,740 children, according to statistics provided by the N.C. Partnership for Children, which coordinates the statewide network of Smart Start agencies.

Playgrounds, floors, ceilings

Linda Clark has been providing child care for 26 years, and she dotes on the five kids she looks after at the day-care based in her Cary home.

Linda Clark has been running a home-based child care center for 26 years.
Linda Clark has been running a home-based child care center for 26 years. Photo courtesy Linda Clark

“The kids are happy. They stay for an average of two-and-a-half to three years,” Clark said. “I still invite kids to a Christmas party every year. We have some who have come for 10 years.”

A few years ago, she received a grant from Smart Start to help her finish off her third room and install a sink where everyone can wash their hands. She also got a small grant to replace the leaky ceiling and the floor and set up an interactive playground in the backyard.

“We were told we needed to have a six-foot-high fence… and Smart Start gave me the money to put a fence up,” Clark explained. “Fifteen hundred dollars is not a whole lot of money, but it’s a lot more than I had.”

All told, she estimates that her grants added up to more than $5,000. Those grants also helped her get her fourth star on the five-star rating system for child care programs – that and the fact that she went back to school to get an associate’s degree in child development.

That extra star means she gets reimbursed at a slightly higher level.

But Clark still needs money for improvements. A recent heavy rain flooded the basement playroom; she needed to replace the carpet and lost two days of work. She needs a door and an outdoor drain to keep the flooding from recurring.

But there are fewer small grants for folks such as Clark because of the repeated trims to Smart Start’s budget.

“There’s still technical assistance for people who have one, two or three stars to help them get up to the higher level,” she said. “But the grants for improvement for four- and five-star facilities have dried up.”

Clark said she’s not looking for a handout, just some help to make her little business better.

“We don’t have a company behind us to help if something breaks or wears out,” she explained. “I’m in the family child care business, and I’m it. I don’t get bonuses, lunch hours, time off. I spend money at A.C. Moore and Michael’s for art supplies, the kinds of things that teachers do.”

“It all adds up,” she said.

Clark, like many other owners of small child care agencies, has not gotten a raise in rates in seven years. The legislature finally mandated a small rate increase in this year’s state budget.

Better parenting

Smart Start doesn’t just provide subsidies for child care to families, it’s a workforce support program, said Cindy Watkins from the N.C. Partnership for Children. She noted that the program is reserved for children of low-income working parents.

But there are limits.

“If a parent loses a job, in theory they lose child care. That’s not only disruptive for the child, it also hinders parents from looking for a new job,” Watkins said.

She said that if a parent does find a new job, they’ve often lost their subsidy and the child goes back on the waiting list.

“Some county Smart Start programs reach agreement with the county [Department of Social Services] to pay for a child to stay in care for up to six months while the parent looks for work,” Watkins said. But she said that the repeated trims to Smart Start funding give counties less flexibility to help newly unemployed parents.

“It reduces our ability to be… able to fill those gaps,” she said.

According to Watkins, also lost with the cuts are additional programs to help parents do better by their children.

“Sometimes children are receiving more than one service. Say they’re in a N.C. PreK program and the family is getting a child care subsidy, and the parent is also taking a parenting class,” she said.

Losses to those services driven by budget cuts are harder to quantify, she said.

“Now a similar number of children may be getting services, but they’re not getting the range of services they might have been getting in the past,” Watkins said.

Difficulty avoiding cuts

Watkins said she’s grateful that lawmakers in North Carolina do fund child care programs to the extent they do.

“I’m always impressed when I talk to a legislator and they acknowledge that this is important and there are long-term implications in investing early,” she said.

And some lawmakers say they realize the flex cuts have been eating away at Smart Start funding.

Rep. Justin Burr (R-Albemarle)

Nonetheless, this year’s budget contains instructions to DHHS to cut $16 million, achieving “the reduction through the elimination or reduction of contract expenses, vacant or filled positions and other state level administrative expenses.”

“We’ve had discussions with [DHHS] about trying to make sure that programs that are directly appropriated by the General Assembly [are] not ones that they choose to go after to reduce,” said Rep. Justin Burr (R-Albemarle). House budget writers worked to reduce the harm to programs such as Smart Start, he said.

The next line in the special provisions portion of the budget provides safeguard language that states, “In achieving the reduction, the Department shall not reduce or eliminate programs or services that provide direct services.”

But advocates say they worry about how DHHS will define “direct services.”

In response to an inquiry to DHHS about where flex cuts would come from, press officer Aaron Mullins said the question needed to be answered by the Office of State Management and Budget.

As of publication time, OSBM had not responded to inquiries about the cuts.

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