Child care subsidy adjustments clear first-round

The state’s child care subsidy for low-income families would be modified under a bill given first-round approval March 30.

Introduced by Omaha Sen. Tanya Cook, LB81 would align the subsidy to mirror existing Aid to Dependent Children (ADC) and Temporary Aid to Needy Families (TANF) programs. Cook said the change would address the “cliff effect” that cause workers to decline raises because the additional income would make them ineligible for the subsidy but would not be enough to cover their child care costs.

“The purpose and intent of LB81 is to create a transitional child care program for working families who are working their way toward economic stability,” Cook said.

Under the bill, if a family’s income at redetermination of eligibility exceeds 140 percent of the federal poverty level (FPL), the family would continue to receive transitional child care assistance for up to 24 consecutive months or until the family income exceeds 185 percent of FPL. The transitional child care assistance would be based on a sliding scale.

Cook said approximately 2,000 families per year would be impacted by the bill, which would help to address the issue of intergenerational poverty in Nebraska.

“I think a big part of breaking that cycle is to live in a home where you see people going to work every day—putting money aside, getting ahead,” she said. “And I believe that LB81 is part of the solution to make that happen.”

Lincoln Sen. Kathy Campbell spoke in support of the bill, calling it an important workforce issue. The Omaha Chamber of Commerce testified in support of LB81 at the bill’s public hearing, she said, which was a first during her tenure on the Health and Human Services Committee.

Sen. Jeremy Nordquist of Omaha also supported the bill, giving an example of a single mother working a full-time job and earning $8 per hour. A modest increase in her hourly wage would result in the cliff effect, he said, and significantly reduce the family’s child care subsidy.

“She’d come out $339 a month less in her family budget by getting a $2 an hour raise,” he said. “That is the unfortunate situation we are in with this program.”

Lawmakers voted 28-0 to advance the bill to select file.