Arkansas Department of Education officials said Thursday it will review whether a “stop-gap” proposal to soften the blow of cuts coming to reimbursement rates for child care vouchers is workable, hoping to come to a decision by Friday afternoon.

Stacy Smith, deputy commissioner of the division of elementary and secondary education, said Thursday a plan from a “emergency work group,” to rework planned cuts coming to the state School Readiness Program “is doable,” indicating the Department may choose to go with an alternative to their planned cuts. However, the Department likely can’t afford to lower the co-pays for parents, she said.

Earlier this week, the work group presented a plan that it said it could serve a stop-gap measure to help offset the worst of looming cuts to child care.

The Department of Education is set to implement lower reimbursement rates Saturday for its School Readiness Assistance program, vouchers that pay for child care for working parents, mostly funded through the federal Child Care Development Block grant.

The new rates are part of what Arkansas Education Secretary Jacob Oliva said is a needed overhaul to keep the School Readiness Program solvent, after the federal government unexpectedly cut Arkansas’ funding.

To keep the voucher program solvent, the Department of Education said it would implement a new reimbursement plan that would compensate providers at a flat rate, no matter the level of care they provide. However, some providers said the flat rate would upend their business models and could lead to closure of many centers around the state.

Child care providers are reimbursed on a six-tier level. Under the current rate structure that’s set to expire on Saturday, the higher the level of care, the more the provider is reimbursed by the state.

In response, an emergency work group created by the Arkansas Early Childhood Commission formed its own plan it thinks the Department of Education could implement before Nov. 1.

The plan calls for lower reimbursement rates, but keeps some of the tiers, meaning providers would still be compensated more for providing a higher level of care.

Smith said the Department will “run projections in-house” on the proposal for the reimbursement plan and announce Friday afternoon what the compensation plan for providers will be going forward.

According to data from the Department, the state’s rate plan would cost $69.9 million, while the proposal from the work group would cost $76.9 million.

Part of the Department’s restructuring also included requiring parents with a voucher to make co-pays. That means, “Families who are working or in school and are at or below the federal poverty level will not pay a copayment for children before kindergarten. Families who are working or in school and are above the poverty level will pay a copayment that adjusts according to income.”

The work group proposed lowering the threshold needed for a family to be exempted from making a co-pay from 40% of the state median income – which is currently in place – to 60%. The group also proposed a cap for households with multiple children at 7% the household income.

However, Smith said it is unlikely the Department could go ahead with the work group’s plan for co-pays. “The co-pays are much harder to run projections on,” she said.

nearley@adgnewsroom.com

Neal Earley covers state politics for the Arkansas Democrat-Gazette. He joined the paper in 2020 and is a graduate of Indiana University.

Comments