By Alycia Hardy

On March 15, 2022, President Joe Biden signed the Consolidated Appropriations Act, 2022, which included $6.2 billion in annual discretionary funds for the Child Care and Development Block Grant (CCDBG). The annual appropriations process is an important opportunity for federal policymakers to invest in programs, such as CCDBG, that support children, families, and child care providers nationwide as well as respond to their needs. CCDBG is a critical support for families with low incomes who, without access to assistance, would likely be unable to afford their current child care arrangement. However, due to limited federal funding, the program only served 1 in 7^[1] eligible children in 2018.^[2]

The $6.2 billion in FY 2022 appropriations included a $254 million increase above FY 2021 funding, a 4 percent increase.^[3] However, annual inflation—or the change in prices from year to year—requires federal funding adjustments to ensure that as child care prices increase, due to inflation, federal funding also increases at the same rate to keep up with those increased costs. The pandemic amplified inflation, creating some of the highest increases in more than 30 years.^[4] Federal investments in child care that expand access to the types of affordable, quality child care families need can act as a tool to combat inflation. Expanded access to child care can create opportunities to start or advance careers, which helps expand the workforce, increase productivity, and drive down inflation.^[5] Unfortunately, the CCDBG appropriations increase for FY 2022 did not keep up with this increased rate, despite an overall increase in federal CCDBG appropriations funding.

The following table provides each state’s actual distribution of FY 2021 annual discretionary funds;^[6] the estimated distribution for FY 2022 discretionary funds; and the estimated increase from FY 2021 to FY 2022. The increases for each state range from $368,000 in Wyoming to $34 million in Texas.

[1] Nina Chien, Factsheet: Estimates of Child Care Eligibility & Receipt for Fiscal Year 2018, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, https://aspe.hhs.gov/sites/default/files/2021-08/cy-2018-child-care-subsidy-eligibility.pdf.

[2] The most recently available data for this statistic is from the FY 2018 analysis from the Office of the Assistance Secretary for Planning & Evaluation which was released in August 2021.

[3] CLASP calculation based on enacted appropriations amount according to each appropriations bill, Consolidated Appropriations Act, 2021, https://www.congress.gov/116/plaws/publ260/PLAW-116publ260.pdf, Consolidated Appropriations Act, 2022, https://www.congress.gov/bill/117th-congress/house-bill/2471/text.

[4] Alberto Cavallo and Oleksiy Kryvtsov, How the pandemic has affected the economy, empty shelves to higher prices, PBS News Hour, https://www.pbs.org/newshour/economy/how-the-pandemic-has-affected-the-economy-from-empty-shelves-to-higher-prices.

[5] Josh Bivens, Child care and elder care investments are a tool for reducing inflationary expectations without pain, Economic Policy Institute, 2022, https://www.epi.org/blog/child-care-and-elder-care-investments-are-a-tool-for-reducing-inflationary-expectations-without-pain/.

[6] CCDBG annual discretionary funds are distributed based on three main factors, the first of two which compare the ratio of the number of children within a state compared to the number of children in the country within the following categories: the number of children under five and the number of children who receive free or reduced priced lunch. The distribution is also based on a comparison of the three-year national per capita income with the three-year average state per capital income.

[7] Fiscal Year (FY) refers to the period from October 1 through September 30, during which states and territories may spend funds awarded in the current and prior years. Grant Year (GY) refers to the year the funds were awarded, although states and territories may liquidate some CCDF funding streams in later fiscal years. Child Care and Development Fund (CCDF) State and Territory Spending Under The Grant Yar 2019 Award as of 9/30/2019, Office of Child Care https://www.acf.hhs.gov/occ/data/ccdf-expenditures-overview-gy-2019-9-30-2019.

[8] State estimated discretionary funding distributions are based on the GY 2021 CCDF Allocations Based on Appropriations, U.S. Department of Health and Human Services, Administration for Children and Families, 2021, https://www.acf.hhs.gov/occ/data/gy-2021-ccdf-allocations-based-appropriations. Actual amounts may differ due to Secretary authority and discretion in set aside funding.

[9] The total includes funds for tribes, territories, and states, as well as funds for research, evaluation, technical assistance, and the CCDF hotline and website. The total does not reflect the $59 million transferred from CCDBG based on the discretion and authority of the Secretary of Health and Human Services, which reduced the total amount of funds allocated to $5.85 billion in FY 2022.

[10] The total includes funds for tribes, territories, and states, as well as funds for research, evaluation, technical assistance, and the CCDF hotline and website.

[11] The estimated increase in funds from FY 2021 to FY 2022 totals $319 million instead of $254 million, due to the $59 million that was transferred out of CCDBG under the authority of the Secretary of Health and Human Services. Therefore, the estimated overall increase in funds allotted from FY 2021 to FY 2022 is $319 million due to states receiving fewer dollars than were originally enacted through the Consolidated Appropriations Act, 2021, https://www.congress.gov/116/plaws/publ260/PLAW-116publ260.pdf.

>> View the fact sheet and analysis here