The state of North Carolina's response to the federal government shutdown also has hurt the ability of many counties to continue offering child care subsidies to low-income families.
The state's child care subsidy program serves about 72,000 families and is budgeted for about $340 million this year in federal and state dollars. Families must pay for a small portion of their child care. When the shutdown began Oct. 1, the state stopped getting federal block grant and child care funds that pay for almost 90 percent of the program.
While other states have made up the difference using state funds, North Carolina health agency officials decided it couldn't count on Congress reimbursing the state after the shutdown, which could end soon after congressional leaders announced a tentative deal Wednesday.
So the Department of Health and Human Services decided to use left use leftover funds to ensure that the most at-risk children — those in protective services among them — get subsidies through December. DHHS told county social services offices earlier this week how much less money they'd have as the shutdown continued.
"Counties are making determinations about whether they have additional funds at the county level to make up the difference," DHHS spokeswoman Julie Henry said. As of late Tuesday, at least 36 of the 100 counties told the state they had reduced child care subsidy programs or were considering it.
The situation may soon be resolved, as Congress raced to pass a bill by late Wednesday that would reopen the government and avoid exhausting the nation's debt limit. But Henry, whose agency has furloughed about 200 workers whose jobs are paid for entirely with federal dollars, said there are still many questions about the flow of funds once any deal is signed by President Barack Obama.
"What we don't know is when the funding is resumed, will it be retroactive, what is the amount and how soon will it get here?" Henry said.
Social services advocates are still scratching their heads why the state hasn't tapped into cash reserves or moved cash around to make up the difference in the subsidies and in Work First, the state's welfare-to-work program. DHHS announced Monday the suspension of processing Work First applications or renewals because there were no guarantees of federal reimbursement. Work First, which provides cash benefits to families with unemployed or underemployed parents, served more than 20,000 people in September.
North Carolina appears to be the only state in the country that suspended processing Work First applications and limited child care assistance in response to the government shutdown, according to officials at CLASP, a Washington-based group advocating for programs to help the poor.
Rob Thompson with the Covenant with North Carolina's Children said Wednesday that other states apparently are confident enough the federal government will repay them for money it spent to make up for lost federal funds. North Carolina's decision puts parents who rely on the subsidy in a difficult situation — if even for a few days. They must either stay home from work or put their child in an unstable care situation, perhaps with a relative or neighbor, Thompson said.
"There's an insensitivity to the challenges that low-income families face in this state," Thompson said. Programs like the subsidy "are often the only thing keeping these families out of poverty and these parents at work."