Iowa parents receiving child care assistance may pay more

Child care providers may ask low-income parents to make up the difference between a state subsidy and the market-rate cost of child care under a bill passed by both chambers of the Iowa Legislature.

Iowa offers child care assistance (CCA) to low-income families with parents who are employed, in school or actively looking for work. The state program reimburses child care centers by 50 to 75 percent the market rate for care, allowing children to attend at no cost to the family.

House File 2127 would allow child care providers to charge parents the difference between state child care assistance and the private pay rate at that center. It’s a recommendation from Gov. Kim Reynolds’ task force, which determined that the current program may “be a disincentive for child care providers to accept children receiving CCA.”

Sen. Mark Lofgren, R-Muscatine, said the bill “allows families to work with child care providers and negotiate rates,” potentially permitting a low-income family to attend a day care which would not normally accept CCA.

Democrats opposed the proposal, arguing it would be an additional burden on already-struggling parents. According to the task force, over 16,000 Iowa families used CCA in fiscal year 2021.

“These are folks that are going to be choosing between child care and buying food for their families, in a time when the prices for everything are going up,” said Sen. Sarah Trone Garriott, D-West Des Moines.

Democrats proposed an alternative: make CCA cover the full market cost of child care and allow more families to qualify for the program. Sen. Carrie Koelker, a Republican, responded Iowa “cannot take care of all of these holes” in the child care industry.

“When I had my children, it was my responsibility to provide them with a quality of life. It was my decision on the child care center I sent them to… and I needed to provide a living, to work for that,” Koelker, R-Dyersville said. “I didn’t expect that on the backs of taxpayers.”

The Senate passed the bill along party lines. The House passed the legislation in early March, so it is eligible to be signed into law.