DATE: Tuesday, June 24, 1997                TAG: 9706240299

SECTION: LOCAL                   PAGE: B4   EDITION: FINAL 

SOURCE: BY ELIZABETH SIMPSON, STAFF WRITER 

DATELINE: RICHMOND                          LENGTH:   90 lines

VA. PLAN TO DISTRIBUTE CHILD CARE SUBSIDIES CAUSES A LOT OF CONCERN SOME WORKING POOR FAMILIES MAY BE CUT OFF.

Some working poor families who currently receive child-care subsidies will be cut off from the funding under a new plan proposed by the state.

The Virginia Department of Social Services is proposing lowering the ceiling of income that families can earn and still receive the subsidy in some areas, and also limiting the number of years a family can receive the subsidy.

Elizabeth Riopelle, a policy director for the state department, said the change will shift money to the neediest families, and reduce the long waiting lists.

About 10,000 families across Virginia are on the waiting list for the subsidies. About 6,800 Virginia families receive them.

The state Department of Social Services must submit a plan by July 1 to the federal government outlining how it will dole out approximately $101 million in child-care subsidies.

``What we propose doing is serving the families in the highest level of need,'' Riopelle said. ``Some waiting lists have not moved for two years. We want to make sure the waiting list is rolling.''

Child advocates and social agency workers from across the state aired complaints about the plan here Monday before the Commission on Early Childhood and Child Day Care Programs, a legislative panel that oversees the development of quality child care services in the state.

Some advocates said the income and time limits would edge out the working poor families who have had jobs all along, but who don't make enough money to survive without the subsidy.

``While the intent of serving the poorest of the poor is positive, income limits will seriously affect the affordability of care,'' said Paul McWhinney, the chairman of the Virginia League of Social Services Executives.

``The income limits may have the unintended consequence of denying child-care assistance to those families who need it to remain employed and off of public assistance.''

To qualify for the subsidy now, families can earn no more than 50 percent of the state median income, or $2,083 a month for a family of four. Localities can opt to serve families who make up to 75 percent of the state median income, which would be $3,125 a month for a family of four.

Under the new plan, income limits would be set according to local median income levels and the federal poverty rate. In Norfolk and Portsmouth, for instance, a family of four could make no more than $1,873 a month. In Suffolk, the same family could make $2,007 a month, while in Virginia Beach and Chesapeake, a family of four could make $2,141.

Riopelle said the department doesn't yet know how many people will have to be dropped from the child-care subsidy program under the new guidelines, but said that those families would receive the subsidy for one year to enable them to make the transition toward paying their own child-care bills.

The plan also for the first time limits how long a family can receive the payments. Families receiving welfare payments will not have to pay anything for child care.

Families not receiving welfare payments but qualifying for the child-care subsidy will be allowed up to three years of paying 10 percent of their gross income if they have one child, or 12 percent if they have two or more children in their family. The fourth year, a family will receive a subsidy that's equal to 30 percent of the market rate of the care in that area. The fifth year, that subsidy will drop to 20 percent of the market rate.

After that time, local Departments of Social Services can continue the 20 percent subsidy for a sixth year with funding funneled to them from the state.

Child advocates at Monday's meeting raised concerns about the system under which the child-care subsidies will be paid. Under the plan, a family that finds less-expensive care will pay a lower co-payment than a family that chooses more expensive care.

``If a family can go to unregulated care because the co-pay is less, is that really parental choice?'' said Toni Cacace-Beshears, executive director of Places and Programs for Children, which runs child-care centers in Norfolk, Suffolk, Chesapeake and Portsmouth.

Cacace-Beshears said the highest quality child care does not tend to be the cheapest child care.

But Riopelle said the system was designed to replicate the real-world decisions that families must make. ``It's a more budget-based, reality-driven system,'' she said. The system will also enable the department to spread the funds to more people.

Rick Cagan of the Virginia Head Start Association described the child subsidy plan as a shell game. ``It's clear that we are operating with inadequate resources,'' he said.

While the child-care subsidy plan would go into effect on Oct. 1, changes can still be made after it's submitted to the federal government. ``There's some flexibility,'' Riopelle told legislators.

Riopelle said Virginia has $13 million to try and winnow down the waiting list of 10,000 families. That amount of money will serve about 3,000 families.

``There are a lot of hard choices to be made,'' Riopelle said.

That concern was echoed by many speakers Monday, including Suzanne Johnson of the Action Alliance for Virginia's Children and Youth.

``It's a hellish question to ask whether we give to this needy child or that needy child.''

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