Murphy Administration Boosts NJ Child Care Subsidies by $54M

Colleen O'Dea | September 9, 2019 | Social
Children’s advocacy group and lawmakers say more funds are needed to help NJ parents cover pay raises for child care workers statewide as a result of increased minimum wage

Credit: Kokab Deen/Pixabay
Daycare
In a state where the high cost of child care can make it difficult for families to make ends meet, the Murphy administration has announced it is increasing child care subsidies for needy New Jersey parents by $54 million this year.

The higher subsidies are beginning two months after New Jersey began to increase its minimum wage. Base salaries for most workers rose to $10 on July 1 and will continue to increase by $1 a year, until hitting $15 on Jan. 1, 2024.

Advocates for Children of New Jersey (ACNJ) had told the administration last May that an additional $19 million would be needed to cover pay raises for all child care workers in the state. Lawmakers had also been concerned, adding $9 million to Gov. Phil Murphy’s budget last June to increase the amount of vouchers given to Work First New Jersey recipients to pay for child care because of expected increases in charges by daycare centers to cover higher wage costs.

The state Department of Labor and Workforce Development’s salary database estimates that more than 18,000 child care workers in New Jersey received an average wage of $11.80 per hour last May. But some make less. According to Indeed.com, some daycare assistant teachers were being paid less than $10 an hour.

Last week, state officials announced that they would use $30 million in federal dollars and $24 million in state funds to increase the amount of subsidies to working families who have been receiving assistance through the program. Subsidies will increase by as much as 10 percent, depending on the age of the child, and will be provided in two phases — the first this month and the rest at the beginning of next year.

A big expense for young families

“A mother should never have to choose between paying her rent and keeping her baby in quality child care,” said First Lady Tammy Murphy in a statement announcing the increased subsidies.

In a blog post, ACNJ expressed support for the increases in subsidies, writing that it “commends the Murphy administration for continuing its strong investment in our youngest children.”

Child care can be expensive. A family with two young children can pay between $1,500 and $2,000 a month on daycare for an infant and preschooler, according to ALICE budget estimates prepared by the United Way of Northern New Jersey. It is one of the costs that makes it difficult for ALICE — Asset Limited, Income Constrained, Employed — individuals and families to afford to live in the state, which is one of the most expensive in the nation.

The state Department of Human Services operates the child care subsidy program, which helps families with low-to-moderate incomes afford daycare when parents are either working, participating in job training or in school. About 5,000 child care providers in New Jersey participate in the program, which serves some 100,000 children per year. The DHS website provides a calculator that allows individuals to input their income and learn whether they might be eligible for a subsidy.

Second year in a row for raise

The subsidy increase in the 2020 fiscal year budget is the second hike in a row. Last year, the administration provided $30 million to hike rates, marking the first substantial increase in nearly a decade, DHS officials said.

In total, support for infant care is set to increase by almost 40 percent since Gov. Phil Murphy took office in January 2018 — from about $724 a month to $994 by Jan. 1, according to DHS. For parents who use an infant care provider with a three-star rating from the Grow NJ Kids quality improvement program, that rate will rise even further, to $1,093. Toddler care rates will reach $830 per month, up from $717 at the start of the Murphy administration, and preschool rates will rise to $690 per month by January, with higher rates for quality rated programs.

“Quality, affordable child care is what working families want and need to succeed in New Jersey,” said Carole Johnson, DHS commissioner. “We know that it is hard to be successful at work or in school if you don’t have confidence that your children are getting the care they need.”