Oregon Child Care Among the Least Affordable

Oregon Child Care Among the Least Affordable

SALEM — Oregon has among the least affordable child care in the nation, with relatively high costs and relatively low median state income, according to an audit released today by Secretary of State Kate Brown. In addition, the audit found that new federal safety rules may increase the cost of child care in Oregon.

The costs of new federal inspection and fingerprinting requirements, which take effect in 2015, are largely unknown, and state agencies responsible for child care oversight have yet to determine how they will manage them. These new regulations could prompt child care providers to raise rates or stop providing care altogether, further reducing affordability and access.

Although the state currently offers subsidies and tax credits for child care, the tax credits are scheduled to sunset in 2015 and 2016.

“Child care helps children with early learning and helps parents enter the workforce,” Secretary Brown said. “Oregon has to ensure access to affordable child care so that families can succeed.”

One national study ranked Oregon as the least affordable state for center-based infant care in 2012 for a married couple. The average yearly cost for center-based care was about $13,000 for an infant;$10,000 for a four-year-old; and $5,000 for a school-age child, according to a study by

the National Association of Child Care Resources and Referral Agencies.

Many factors drive child care cost, including payroll, regulation, facility rent, mortgage payments and utilities. Cost of living differences within regions also impact child care costs. Within Oregon, care in urban areas is significantly more expensive than care in rural areas.

Throughout Oregon, providers in 4,360 child care facilities and homes offer about 150,000 slots for 165,000 children needing care. For many Oregon child care providers, the new federal rules will require more comprehensive background checks and fingerprinting, increased on-site monitoring and more information posted online at state websites for parents to reference.

Oregon’s Department of Education and Department of Human Services implement child care regulations. Auditors found the state’s limited fingerprinting services may not meet the increased demand among child care providers.

The higher workload resulting from new inspection requirements–up to a 71% increase–may exceed the capacity of state field offices across Oregon, according to the audit.

The rules could improve safety. For example, Oregon currently inspects only licensed child care facilities. The new regulations will require inspections of most providers who serve families receiving government subsidies for care, even providers that are not required to be licensed.

The downside to the new regulations could be increased child care costs, and the audit detailed options for policy makers to consider when addressing affordability. Several states, including Oregon, use child care subsidies and tax credits to help parents pay for child care.

Some states, including Georgia and Oklahoma, provide universal preschool, which reduces child care costs for parents. Other countries offer extensive paid leave policies for new parents. In the United States, only California, Rhode Island, and New Jersey offer paid leave.

“Our audit can help the state evaluate policies that affect Oregon’s child care industry, whether they are policies on affordability, access, safety, or quality of care,” Audits Director Gary Blackmer said.

State agencies can improve their preparation to comply with the new regulations, the auditors found. They recommended that ODE and DHS initiate administrative or statutory changes required to allow inspections of unlicensed providers.

ODE and DHS also should determine the costs of the new regulations and monitor whether the state is meeting the demand for fingerprinting services and inspections.

Secretary Brown commended ODE and DHS for agreeing to the audit recommendations to comply with proposed federal regulations and potentially reduce their impact on providers, parents, and their children.

The audit can be found at on the Secretary of State’s website or at: http://sos.oregon.gov/audits/Documents/2014-25.pdf