Transcript presented several scenarios

SB12-022: Concerning
Maintaining Child Care
Assistance for Working
Families
Possible Scenarios
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Bell Policy Center
THE CLIFF EFFECT

Occurs when an increase in income, which causes a client to become
ineligible, does not cover the loss of public benefits the client was receiving (1)

Subsidy cliff vs. real cost cliff
Cliffs for a Single Parent with Two Children in Denver County (2)
Child Care Cliff
Food stamp Cliff
CHP+
Cliff
2
CCCAP BACKGROUND
A
federally funded program
CCDF block grant
 Requirements

<13 years of age
 Eligible activity
 Income below 85% SMI

 County



administered
Eligible activities
Income eligibility levels
Provider reimbursement rates
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STATE’S ROLE

Sets the parent fee schedule for the entire state (3)
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SB12-022 (4)
Attempts to mitigate the cliff by providing
terminated clients with a transition period of 2 years
 How this transition would occur is not fully known
 Possible scenarios

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ASSUMPTIONS
3 Counties: Logan, Denver, Mesa
 Family of three: 1 parent, 2 children (1<school age;
1>school age)
 Income stays the same over two years
 Center based care, at the highest quality level
 Those who may be affected by the bill/cliff effect
have incomes 30-40% below the eligibility cutoff
point
 The family is right at the eligibility cutoff point

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COUNTY DATA
County
Logan
Denver
Mesa
Rural
Urban
Urban
70 cases
2,099 cases
837 cases
no waitlist
401 cases/790 children
48 cases/82 children
Income Eligibility Cutoff (6)
130%
165%
225%
Income when Terminated (3)
$2,007/month
$2,548/month
$3,474/month
Cost of Child Care (7)
$1,010/month
1,623/month
$1,010/month
50.32%
63.70%
29%
Parental Contribution at
Termination (3)
10% of income=200.70~
$201/month
12% of income = $306/month
14% of income = $486
Cliff in Benefits upon
Termination
$809/month
$1,317/month
$524/month
19/70 cases or
411/2,099 cases or
76/837 cases or
Type
Number of Low Income
CCCAP Families (5)
Waitlist/Number (6)
Child Care as % of Income
Who may be affected? (5)
27.14~27% of
19.58%~20% of
9.08%~9% of
low income CCCAP
families in Logan
low income CCCAP
families in Denver
low income
CCCAP families
in Mesa
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SCENARIO 1: EQUAL MONTHLY
INCREMENTS OVER TWO YEAR PERIOD

Monthly Increment
 Logan = $34
 Denver = $55
 Mesa = $22
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SCENARIO 2: STEEPER INCREMENTS IN
YEAR 2 (33/66 BREAKDOWN)
Monthly Payment Increments
County
Logan
Denver
Mesa
Monthly Increment:
Year 1
$23
$37
$15
Monthly Increment:
Year 2
$45
$73
$29
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SCENARIO 3: STEEPER INCREMENTS IN
YEAR 2 (25/75 BREAKDOWN)
Monthly Payment Increments
County
Logan
Denver
Mesa
Monthly Increment:
Year 1
$17
$28
$11
Monthly Increment:
Year 2
$51
$82
$33
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THE STATUS QUO
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Benefits
Provides families with support to successfully
transition off the CCCAP program
 Provides parents with support to continue working
 Provides children with consistent, safe, and
stimulating care
 Allow counties to maintain control over whether
they decide to participate in the program
 Potentially reduces worker turnover and associated
costs for employers
 Provides the state and this committee with much
needed data

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References and Notes
(1) Dinan, K.A., Chau, M., & Cauthen, N.K. (2007). Two steps forwards and three steps back: The
‘Cliff Effect’—Colorado’s curious penalty for increased earnings. Denver, CO: The Women’s
Foundation of Colorado.
This piece was the seminal academic work, that proved quantitatively, that the cliff effect existed.
(2) (Dinan, Chau, & Cauthen, 2007, p. 3). This graph was constructed in 2007 when the minimum
wage was $6.85. The current minimum wage is $7.64. However, this increase in minimum wage
does not alter the cliffs. If anything, the increase results in termination occurring at a quicker pace,
especially since many counties have dropped their eligibility levels since 2007.
(3) Colorado Division of Child Care (2011). Child care and development fund for Colorado: FFY 20122013. Denver, CO: Colorado Department of Human Services. Attachment 2.4.1: Sliding Scale for
Child Care Services
(4) An act concerning maintaining child care assistance working families. S.B. 022, 68th Colo. Gen.
Assembly (2012).
(5) Colorado Division of Child Care (2010). CCCAP annual program information: State and county for
2010. Received through personal communication with Leslie Bulicz, Associate Director of the CO
Division of Child Care on 10/28/2011
The numbers for the number of CCCAP families and who may be affected, is from the CCCAP
Annual program information in 2010, encompassing the period between July 1, 2009 and June 30,
2010. Due to the new CHATS system and the transition, a new annual report for the whole state
hasn’t been acquired as of yet. Thus, with the data we have, these are the best estimates of the
number of cases in each county as well as the percentage of CCCAP recipients who may be
affected
(6) Data retrieved from Leslie Bulicz, personal communication, 11/2/2011
(7) Colorado Division of Child Care (2011). Child care and development fund for Colorado: FFY 20122013. Denver, CO: Colorado Department of Human Services. Attachment 2.7.1: Payment Rates
for Child Care Services
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