Colorado’s Child Care ‘Cliff Effect’ Strands Many on Cliff’s Edge

Several recent stories highlight the consequences of Colorado’s current patchwork of policies for child care subsidies, or the Child Care Assistance Program (CCAP). The worst of it is what’s known as the ‘cliff effect’–a term used to describe the point at which a modest rise in income leads to the loss of hundreds or thousands of dollars in public assistance–that inhibits many from earning more money for fear that they’ll be worse off.

While lawmakers have attempted to address the child care cliff effect, their efforts have been thus far unsuccessful. The policy solution to the cliff effect is rather simple: instead of cutting off assistance when a families income goes above a certain level just phase it out. The Durango Herald reports:

Colorado Counties Inc., the lobbying organization for the state’s 64 counties, twice has lobbied against legislation requiring the counties to phase out child care assistance to counter the cliff effect. Each time, the counties lobbied successfully to make the proposals voluntary. The 2012 bill called for a 10-county pilot project to test phasing out the benefit. So far, no county has volunteered.

Compounding the problem is the fact that Colorado’s system of government emphasizes local control more so than most states–in Colorado, policy for certain government assistance programs is set by counties giving. This can give rise to large disparities in services across county boundaries. Again, The Durango Herald with an example of the inequity in child care assistance eligibility between counties:

For example, in southeast Colorado, Prowers County cuts off child care at $25,000 for a three-person family, while adjacent Bent and Kiowa counties allow up to $44,000. A 2008 state audit found that more than 1,000 families denied child care assistance because their incomes were too high would have qualified in a neighboring county.

Comprehensive solutions to the cliff effect problem continue to be illusive and policymakers must find a solution that is equitable and provides incentive to people to continue to achieve instead of dreading the cliff’s edge.

The following is a list of recent stories highlighting the child care cliff effect:
‘Cliff Effect’ Blamed for Keeping Coloradans in Poverty – The Durango Herald
In Colorado, Child Care The Key Between Self-Sufficiency and the Cliff – KUNC
The Lives of Three Colorado Women on the Edge of the ‘Cliff’ – KUNC
Working Single Dad Takes Pay Cut to Keep Childcare Benefits – NBC Rock Center

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