National Report on States’ Childcare Licensure Reveals Inadequacies in Oversight, Funding

On November 6, 2013 Applied Research Center (ARC) was rebranded as Race Forward: The Center for Racial Justice Innovation. The content on this page was published on the ARC website prior to the rebrand.

Low Income and Minority Children Disproportionately Affected


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04.22.2009 – New York: A national study released today by the Applied Research Center (ARC) shows the effects of unlicensed care on the quality and safety of childcare for low-income families. Fourteen states, including AL, AR, FL, IL, IN, LA, MD, NY, and VA have exemptions from licensure, allowing some faith-based, private school, and/or other unlicensed childcare centers to operate without basic standards that protect children. Such licensing exemptions include immunity from staff-to-child ratios and from staff educational and safety requirements. In the most egregious states, unlicensed centers receive exemptions with ease from state authorities who provide little to no oversight. Often such unlicensed programs nevertheless qualify for state subsidies for the care of low-income children.

While some unlicensed childcare centers are of excellent quality, others of questionable safety and quality have opened in increasing numbers in those states without supervision, standards, and oversight. The ARC study examines national trends in the state administration of childcare and provides detailed case studies of three states, Alabama, California and Maryland. It finds that Alabama, for example, has seen an increase of 31% of its unlicensed centers (from 628 to 821) since 2000, and a decrease of 17% of its licensed centers (243 of 1429).

The report quotes a county-level health inspector in Mobile, AL who said “I saw a center with 58 kids spread across three rooms and only one or two adults looking after them. We saw a center with one adult and nine babies in a building that wasn’t [fireproof] sprinkled!” Such unlicensed facilities are not inspected by the Department of Human Resources, the state agency that licenses and inspects all licensed facilities in Alabama. And because unlicensed facilities do not have the same business overhead costs, they are often able to charge lower fees than licensed care, providing an incentive to low-income families to choose these unregulated centers.

“If we believe that a set of minimum standards for childcare is necessary to protect the health, safety, and well-being of children, then why do we choose to protect some children and not others?” asks Sophia Bracy Harris, Executive Director of the Federation of Child Care Centers of Alabama (FOCAL).

However, safety concerns in childcare facilities do not exist solely in states with licensure exemptions. For example, in California, a state with no licensure exemptions, insufficient funding for oversight has resulted in similar problems. The state ranks among the nation’s most lenient on frequency of inspections (once every five years), yet California has not been able to meet its inspections targets, according to the state auditor.

“The key point is that when there are no mechanisms in place for monitoring and reporting in so many states, or when oversight funding is woefully inadequate, we are in the dark about the safety of many of our most vulnerable children,” says the reports principal author and ARC Research Director Dominique Apollon. “We are simply running on faith in these states that unlicensed, unmonitored facilities are following basic health and safety standards, and that’s just not good enough.”

Often, it’s low-income children that are suffering from the underserved and underfunded systems. Because high-quality childcare is not accessible or affordable for many low-income families, government assistance is a critical issue for states. Yet with the recent national economic downturn, state subsidy programs are in jeopardy from coast-to-coast, which will exacerbate access problems. ARC Executive Director Rinku Sen stresses “It is precisely during such times of economic crisis that we must maintain and even increase federal and state funding for childcare subsidies and oversight. Otherwise we will make it even more difficult for low-income parents, who are disproportionately people of color, to find and retain work during this recession, and we will also disrupt the continuity of care for those subsidized children who are lucky enough to be in quality programs currently.”

The report concludes with recommendations for all states to:
Abolish state exemptions and fund transition costs, strengthen licensing requirements and adequately fund state oversight, and improve record keeping in state government.