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More Creative, Flexible Funding Needed for Federal Child Care GSA Study Finds Child Care Affordability Remains a Universal Concern

GSA #9414

May 21, 1997
Contact: Faith Wohl (202) 632-0186
Bill Bearden (202) 501-1231

WASHINGTON, DC -- A report issued today by the U.S. General Services Administration finds that federal child care centers need more adequate and creative financing if they are to be affordable to federal parents across the economic spectrum.

The GSA report is a response to directives by President Clinton and Congress for the agency to review the affordability of federal child care centers and to search for ways to help lower-income employees gain access to quality affordable child care.

The GSA report focuses primarily on the 225 non-military federal child care centers that operate across the nation. There are, in addition, more than 800 child care programs operated by the Department of Defense (DoD) worldwide. Because these centers operate under separate legislative authority, with different appropriations, they are far more affordable to military and civilian employees of DoD than those that operate in the non-DoD sector.

Acting GSA Administrator David J. Barram said, "At GSA, we have been concerned for some time that our centers were becoming out of reach for lower graded employees. We have taken a number of steps to try to help, but these have not been sufficient." He said that the study found that child care affordability is a universal "societal" concern and not unique to federal centers.

The report Barram forwarded to Congress on May 16 outlines steps GSA plans to take in the next several months. These are based in part on a new study commissioned by GSA from the National Academy of Public Administration as well as on GSA's experience as a sponsor of 108 on-site child care centers in 71 cities (including the District of Columbia) in 31 states.

Barram said that federal child care centers need more adequate funding to supplement fees paid by parents and the financial support provided by federal agencies that supply space, equipment, furniture and other facility services free of charge to private child care providers who operate centers in federal buildings. New monies must be found to support program operations and to help parents pay tuition at the centers. Barram said it could take as much as $10 million more per year to provide significant tuition support for lower income families.

GSA does not plan to seek additional appropriations from Congress. Instead, Barram said that GSA will take on a new fundraising and business development role to help centers become more affordable. The agency will also increase its efforts to provide leadership and assistance to the whole community of federal non-DoD centers to share best practices and experiences.

Barram said, "There is no silver bullet that will solve the affordability problem. What is required is a combination of many strategies to reduce costs, increase revenues and enhance the availability of scholarships to help families with limited means to pay for care." He added that the $10 million target is "a challenging goal, but one we're prepared to pursue."

Key Findings

Employer-sponsored child care is a cost-effective investment but requires steady, predictable funding. This is not just a challenge to the federal child care community, but to all child care centers operating in the United States.

Child care requires funding in three ways: program support to keep wages paid to child care workers at an appropriate level, while keeping fees reasonable for parents; tuition support for parents who can't afford to pay the full fee; and money to enhance center quality, staff training, security and facilities.

Quality child care is generally out of reach for low-income federal employees, a problem that will intensify as the federal government hires from the welfare rolls to meet the President's commitment. (Agency plans currently total about 10,000 jobs for former welfare recipients over the next four years. Ninety percent of this population are single mothers with young children.)

Local fundraising by individual federal child care centers can generate additional revenues to somewhat offset the high cost of care. (Centers in GSA buildings alone raised more than $1million in 1996.) But bake sales and local events are not adequate to provide sufficient tuition assistance. Needed are grants from the private and non-profit sector, as well as additional revenue from enterprising use of centers to add special programs and services for children.

Fundraising must become much more sophisticated and national in scope. GSA will retain experts in fundraising and financial development to develop a national fundraising strategy and implementation plan to help support all non-DoD centers.

GSA is prepared to require a sliding fee scale for every child care center operating in its buildings once adequate additional funding is generated. Otherwise, higher income parents would have to pay even higher child care fees to offset reduced fees for lower-income parents.

Some modification of the Trible Amendment (40 USC 490b: legislative authority for agencies to make space available for on-site centers) may be necessary to maintain center enrollments at capacity and to provide greater flexibility for federal agencies to collaborate with private sector organizations.

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