WELFARE REFORM HITS CHILD CARE; FUNDS FOR FOOD REDUCED

Some child-care providers will have to find creative ways to make ends meet because of a reduction in governmental aid for nutritional meals.

Effective July 1, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 -- commonly known as the welfare reform law -- targets entitlement funds to low-income homes and group child-care homes and low-income children who are served in those homes. Previously, the funds were available to all licensed home child-care providers through the Missouri Department of Health's Child and Adult Care Food Program.

Regina Coffey, director of the food program in Portageville, said the new provisions mean child-care providers will have to do more with less.

"It will impact them as far as their providing groceries because the groceries aren't going down, and that's what this money is for," she said. "They will have to shop more at sales and discount stores and make sure they get the best deals for their money. Some of them will have to raise the prices to make sure they can feed them."

The new law will reimburse licensed home providers at two different rates for feeding children breakfast, lunch or supper and a snack. Qualified providers will be classified as Tier I and will receive the old rate of $2.90 per child per day in state entitlement funding, said Deborah Markenson, bureau chief of the MDH Nutrition and Child Care Program in Jefferson City. New Tier II providers will receive a smaller reimbursement rate of $1.35 per child per day if they or the children they keep aren't classified as low income, she said.

"Only those homes who aren't in low-income neighborhoods or serving low-income children will see a change in rate," Markenson said.

Providers must meet one of three requirements to continue receiving the higher Tier I reimbursement rate. To qualify, providers must either:

-- Be in a geographic area based on Census data in which 50 percent of the children meet the income guidelines for children receiving free or reduced price meals in the National School Lunch Program.

-- Be in an area served by an elementary school in which 50 percent of the enrolled children are eligible for free or reduced price meals.

-- Have household income that meets the criteria to receive free or reduced price meals.

Some providers said losing $1.55 for each Tier II child will make it harder for them to maintain their nutritional standards without raising their prices.

"I haven't done anything this summer, but I will raise prices in the fall," said Marilyn McFerren, owner of Marilyn's Daycare in Cape Girardeau. "I don't have any choice."

McFerren, a licensed home provider who keeps an average of nine children each day, said she was told by state contractors in St. Louis who administer her funding that she would be classified as a Tier II provider, although she will be reimbursed at the higher rate for the Tier I children she keeps. She's not sure yet how much money she will lose as a result of the policy, but she said the contractors told her she could "raise the price of child care and take it out that way."

Martha Dumars, owner of Miss Martha's home daycare, said she didn't support the reimbursement change. She said she hasn't had a price increase in five years, but parents of children she keeps will probably see an increase in the near future.

"There's just no way I can continue to do it and feed my kids the way I used to do," said Dumars, a licensed provider who averages about 11 children each day.