Ohio Senate Finance and Financial Institutions Committee
Regarding Am. Sub. H.B. 95
On Behalf of the Children’s Defense Fund-Ohio
May 29, 2003

Senator Harris, members of the Committee, thank you for the opportunity to speak this afternoon on behalf of Ohio’s children. I am Eileen Cooper Reed, Executive Director of the Children's Defense Fund-Ohio. The Children's Defense Fund exists to Leave No Child Behind® and to ensure that every Ohio child has a healthy start, a head start, a fair start, a moral start, a safe start and safe passage to adulthood with caring families and communities. We do not accept government funds and are a non-partisan, not-for-profit organization.

I had the honor to speak before many of you and your colleagues on the Senate Education Committee, where I outlined the Children's Defense Fund-Ohio’s positions on the education portion of the budget. I have attached a copy of that testimony to my remarks. I want to take this opportunity to thank you for addressing many of our concerns.

Thank you for restoring Average Daily Membership to the school funding formula. We applaud the House’s intent to hold school districts accountable for student attendance and subsequent achievement, but we agree that major changes to the funding formula should wait until the Governor’s proposed Blue Ribbon Panel on Financing Student Success convenes.

Thank you for restoring much of the funding for professional development. To close Ohio’s persistent achievement gaps, teachers must be ready to teach and school administrators must be ready to lead. We encourage you to go farther and fully restore the funding for professional development to the levels recommended by Governor Taft.

We still have major concerns about the proposed Head Start Plus program.
Stakeholders from the child care and Head Start communities have worked diligently since Governor Taft’s budget was introduced to develop a proposal that would address their concerns on a variety of issues raised in the Head Start Plus proposal. We support the work of the stakeholder group and endorse the Head Start/child care alternative proposal.

We urge you to include the Head Start/child care alternative proposal in this bill. The alternative proposal addresses five key issues not met by Head Start Plus:

1. appropriate funding for child care and Head Start providers to fully maintain their partnerships;
2. a mechanism to investigate partnerships that aren't working;
3. a committee to work with ODJFS and ODE on what the two systems would look like in 2005. Current language calls for a committee to plan and monitor the implementation of Head Start Plus. We believe that an implementation committee is premature at this point;
4. a funding source that would allow for the continuation of Head Start services to foster children and homeless children, and to allow for medical services to be provided to those who needed it;
5. the continuation of the Head Start performance standards.

We recommend that you remove the Head Start Plus language from the budget bill and replace it with the current Head Start language until all parties have come to an agreement about how best to reform the system of providing Head Start and child care services to Ohio’s neediest children.

Eight years ago, Children's Defense Fund-Ohio was one of many advocacy groups and service providers who worked with the General Assembly to craft a system of supports that would encourage parents to leave welfare, enter the workforce and break the insidious cycle of poverty and dependence.

The welfare reform partnership between the state and its citizens has paid off enormously. More than 60% of low-income single mothers of young children are in the workforce. Currently, more than 100,000 Ohio children are receiving child care assistance, nearly double the number in 1996. Of these, more than 4 in 5 live in low or moderate income working families, and less than 1 in 5 live in families participating in Ohio Works First. Ohio’s working poor have kept their end of the bargain.

We acknowledge that Ohio’s fiscal crisis is real and that you must take action to bring the budget into balance. However, we do not agree that reducing the eligibility level for child care assistance from 185% to 150% of the federal poverty level is an effective cost-containment measure.

Parents earning between 150% and 185% are the most stable child care customers. They tend to stay employed and are more likely to pay their co-pay. Their higher co-pays means that the state pays less for these children than for those whose parents earn less than 150% of the federal poverty level.

These parents are, however, extremely vulnerable. You have heard compelling testimony this week from parents who are at risk of losing their coverage in September: the mother who makes $7 too much to keep her son enrolled in the Y’s after-school program; the young couple, working and attending college, whose monthly daycare bill will increase 700% from $200 per month to $1600 a month.

An investment in high-quality early childhood care and education is an effective and strategic use of public dollars. You know that child care keeps parents working. It also drives a significant portion of our state’s economy. The child care sector generates $1.5 billion in revenues, supports over 30,000 direct, indirect and induced jobs; provides support for businesses that need stable employees; and it generates much-needed sales and income taxes.

The economic benefits of child care far exceed its costs. Good child care contributes to reductions in special education costs; lower school drop-out rates; decreased levels of criminal activity; and increased earning power, including reduced risks of poverty.

We respectfully request, therefore, that you restore eligibility to 185% of the federal poverty level from the 150% adopted in House Bill 40. Children's Defense Fund-Ohio supports the use of federal fiscal relief monies to pay for the restoration. Ohio will be receiving $386 million in temporary grants -- $193 million in federal fiscal years 2003 and 2004. The Legislative Service Commission has projected that the cost of covering children up to 185% of the federal poverty level will cost $79 million in FY 2004 and $91 million in FY 2005 for a total of $170 million over the biennium. Ohio can afford this investment.

We understand the concern about using one-time monies to fund essential services, however, this fiscal relief will give stakeholders, legislators, and the administration two years to work on finding a stable revenue source for child care.

We also ask that you use the federal relief funds targeted for Medicaid to restore parental health care for low-income working parents. Ohio can receive an additional $147 million in federal fiscal year 2003 and $238 million in federal fiscal year 2004. These additional dollars can offset the $33 million cost over the biennium to restore coverage for 50,000 working parents earning up to 100% of the federal poverty level. Ohio can afford this investment.

Please note that states that reduce their Medicaid eligibility will not be eligible for the federal aid. Ohio cannot afford to miss this opportunity. Most importantly, however, these working families with children deserve work supports as they lift themselves out of poverty.

We applaud you for supporting the Healthy Start program and maintaining the current level of eligibility for children. This is a tremendous and thoughtful investment in children that is cost effective. You are probably well aware that Healthy Start/ Healthy Families provides health care to approximately 75% of Medicaid recipients while accounting for only about 25% of Medicaid costs. We thank you for continuing to support Healthy Start/Healthy Families coverage for children.

As you well know, Ohio’s constitution requires a balanced state budget. These critical supports that I have outlined have to be funded some way and we believe it is an appropriate and imperative investment for this state to make. The Governor’s revenue proposals took a significant step toward reforming the state tax code. Unfortunately, the current revenue proposals are insufficient to resolve Ohio’s structural deficit and continue the trend of shifting Ohio’s tax burden from corporations to middle and income taxpayers. We ask that you reconsider the Governor’s tax proposals and take action to raise revenues in a fair and equitable manner that invests in our most precious commodity – our children and their families.

Thank you for your time and I will be happy to answer any questions.

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