Business

A separate but unequal system for day care

Worcester, MA- April 25, 2017: Teacher Latonya Hazard work on puzzles with students (left to right) Lilyana Waire (cq) , 2, Jordan Conrad (cq) 2, Caiden Groccia (cq), 2, and Joshua Davis (cq) 2, at the Guild of St. Agnes in Worcester, MA on April 25, 2017. The Guild of St. Agnes is an early education and care agency that relies on state subsidies for 95% of their students according to director Gloria Johnson. The availability of state-subsidized child care has been narrowing, and growing more separate from private daycare, as fewer providers accept low-income students. (Globe staff photo / Craig F. Walker) section: business reporter:
Craig F. Walker/Globe Staff
Teacher Latonya Hazard worked on puzzles with students, left to right, Lilyana Waire, 2, Jordan Conrad, 2, Caiden Groccia, 2, and Joshua Davis, 2, at the Guild of St. Agnes in Worcester.

Linda Cirino planned to go back to work after she had a baby in January, but she couldn’t afford child care at the Roxbury day-care center where she had worked for 16 years. And when she applied for a state subsidy to help cover costs, her baby was put on a waiting list — alongside more than 24,000 other children.

So she quit her job.

Now Cirino, 43, is at home with her daughter, relying on her husband’s maintenance job to pay the bills. They sold one of their cars, cut the cable, signed up to get free formula and milk, and applied for food stamps.

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“I didn’t want to leave my job,” Cirino said. “Sixteen years working with babies, that’s a job that I love to do. . . . Every time I think about it I feel like crying.”

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Parents such as Cirino are finding that, as state subsidies for child care have lagged over the years, some early education centers can’t afford to stay open or are admitting fewer low-income children. Instead, those centers are getting more of their income from families that can pay the far higher market rate.

To compound the problem, day-care teacher pay, which is based on the subsidy rates, is so low that many educators are leaving for better jobs, leading to closed classrooms and fewer spots for low-income kids.

Nonprofits with a mission to support low-income families are picking up some of the slack, taking in more subsidized kids — who bring in about $20 to $40 a day less than families that pay full price — and are struggling to keep their doors open. With fewer resources, some of these programs aren’t able to offer the services their privately funded counterparts do, and a separate but unequal system is emerging.

“Because of low rates, it’s become a system that is divided by socioeconomic means,” said William Eddy, executive director of the Massachusetts Association of Early Education and Care, a trade association for providers. “Essentially, poor kids, particularly urban kids of diverse backgrounds, are all in subsidized programs together. And there’s a second system of care where children of parents who can pay private market rates have many more choices.”

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For parents trying to hold down a job or take classes, child care is essential. And in Massachusetts, it’s often prohibitively expensive — $17,000 a year on average for an infant, the second-highest rate in the country.

When families can’t secure a subsidy, some quit their jobs and stay home with their children, as Cirino did, sometimes turning to public assistance to get by. Others drop children off at a grandparent’s or neighbor’s or at a lower-priced unlicensed provider, which means greater risk. In the first week of April, there were two deaths at unlicensed centers: an 18-month old in Sturbridge and a 10-week old in Mendon.

Roughly a quarter of the 225,000 children in the state’s early education system get subsidies, according to the Department of Early Education and Care. Most qualify for subsidized vouchers because of their parents’ low incomes, some are transitioning off welfare, and the rest are being served by the Department of Children and Families, the state’s child protection agency, who are guaranteed day-care space.

A rising share of slots in many facilities is being devoted to kids being served by the agency, as more families are ripped apart by the opioid epidemic and are more closely scrutinized following the deaths of several children in state care.

The state serves roughly the same number of subsidized children it did four years ago, but there are nearly 300 fewer providers that accept subsidies — reflecting a systemwide drop in the number of caregivers.

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Meanwhile, the state has let lapse subsidized vouchers once held by children no longer eligible — rather than reissuing those vouchers to new families. In addition, for the past two years the state has not increased the number of vouchers it funds.

In the past year, the number of these vouchers dropped by nearly 3,600.

At the Guild of St. Agnes in Worcester, the changes have been significant. St. Agnes is contracted to serve 300 kids in Department of Children and Families care but currently has twice that number. Nearly all of their 1,600 slots throughout Worcester County are now occupied by subsidized kids, said director of programs Sharon MacDonald. Three years ago, a third of families paid full price.

The shift has put a strain on St. Agnes, with less money coming in and more kids requiring higher levels of care. In the past year, at least 17 of the agency’s children had parents who died of drug overdoses or suicides, including seven in one center alone, MacDonald said. In another center, 55 of the 150 children were being cared for by a guardian or foster parent.

“It looks completely different than it did a few years ago,” she said. “We’re much more known as the center for poor kids.”

It is widely agreed that the state’s system is in crisis, but help could be on the way. House Speaker Robert A. DeLeo has made early education and care a priority, calling on business leaders to find ways to improve the system and pushing through budget proposals that would dedicate $20 million to raise the rate the state pays for child care in the next fiscal year. Governor Charlie Baker has proposed a separate $28 million boost — the biggest hike in 10 years. The administration also plans to add $9.3 million a year for infant and toddler programs and reissue 1,100 vouchers that were not filled this year.

Advocates are skeptical that all of the governor’s proposed funding will come through but hopeful that the state’s crippled early education system is finally getting the attention it desperately needs.

Of all programs designed to assist low-income families, studies show that government spending on early child care may have the most significant impact for parents and their children — leading to higher earnings, more education, better health, and less criminal activity. Yet the United States spends less on child care per capita than almost every other industrialized country.

“The child-care system is not structured to help low-income, at-risk minority families migrate into self-sufficiency,” said Wayne Ysaguirre, president of Nurtury, which has been providing child care for poor families around Boston since 1878 and was recently forced to close one of its centers in Cambridge because it couldn’t afford to make needed repairs. “It’s one of the key services that you need in this society to thrive, unless you’re wealthy.”

But as costs rise, and state rates lag, some providers are making difficult choices to stay afloat. Family Access of Newton, which began as a nursery school for the children of immigrant domestic workers in 1907, has dropped the share of subsidized slots it offers from 60 to 20 percent of its families over the past few years.

The state rates, which are about half what the center charges private payers, don’t cover the higher costs of day care today, said executive director Jon Firger. Along with skyrocketing health care costs, centers now need to offer competitive salaries to attract teachers with bachelor’s degrees in order to get a better rating from the state.

In Newton, there is huge demand for child care, Firger said, and plenty of parents who can pay full price, so it made business sense to bring in more of them. But that doesn’t mean he’s comfortable with the change.

“We’re being pushed into an economic model that sustains us,” he said. “But it pushes us away from our mission.”

The Cambridge Economic Opportunity Committee tried to stick with its mission. The center once had a few full-fee families among the 76 largely low-income, immigrant children it served in Somerville in a converted church recreation hall. But over the years, parents who could afford to send their children to more upscale facilities did so, said executive director Elaine DeRosa.

Relying solely on lower state rates meant less revenue, and as costs grew, the day-care center started falling behind. By the time the landlord announced a major rent hike in 2014, the center was $60,000 in debt. And that fall, after 40 years caring for children in the community, the day care shut down for good.

Katie Johnston can be reached at katie.johnston@globe.com. Follow her on Twitter @ktkjohnston.