Childcare providers alarmed over proposed DHS cuts

OKLAHOMA CITY (KFOR) — Oklahoma childcare providers warn that families could soon find themselves with much fewer affordable childcare options if an emergency policy, proposed by the Oklahoma Department of Human Services, is approved.

If signed by Governor Stitt, an emergency policy change proposed last week by the Oklahoma Department of Human Services (OKDHS) would result in 15% fewer Oklahoma families qualifying for childcare subsides.

It would also make it much harder for childcare centers to maintain a five-star rating with OKDHS, causing any centers whose ratings drop, to lose out on subsidy money they had been budgeting for.

Hundreds of childcare operators from across the state held an emergency town hall via Zoom on Thursday, where they sounded the alarm over the proposal and its potential effects on childcare providers and the families they serve.

“A lot of us feel like we're a hostage in our own businesses,” said Janell Wheat with the Licensed Childcare Association. “You will see centers that will close because they just financially will not be afford to stay open.”

Currently, 85% of kids and families in Oklahoma qualify for childcare subsidies from OKDHS.

They can attend any of the more-than 3,700 childcare centers across the state licensed by OKDHS.

Right now, OKDHS assigns those childcare centers ratings on a scale from one to five stars.

Centers with five-star ratings are allotted the most amount of dollars-per-subsidized-student they have enrolled, while centers with one-star ratings are allotted the least.

Currently, licensed childcare centers with an accreditation from a reputable accreditation organization are automatically assigned five stars.

OKDHS periodically inspects childcare centers for violations. Depending on what violations are found, a school’s rating may or may not be affected.

But OKDHS told News 4 they are running out of subsidy money.

“The pandemic-era level of spend is unsustainable,” an OKDHS spokesperson told News 4.

That’s why OKDHS put forward that emergency policy proposal on September 11.

Under the proposed new policy, only 70% of Oklahoma kids and families would qualify for subsidies.

That could mean fewer childcare centers with subsidized students enrolled. Without subsidized students, those centers would lose OKDHS subsidy funding.

It would also put in place a much stricter criteria for the star rating system.

Under the proposed system, any minor policy violations found would automatically revoke a childcare center’s rating to two stars.

Childcare centers would only be able to earn back one star a year.

 “They basically can put you out of business by this financial revocation,” Wheat said. “We've been told that we're supposed to operate at pre-COVID costs and that would be fantastic if the world would comply.”

Wheat says centers whose ratings get cut from five-stars to two-stars for minor violations would effectively be losing half of their subsidy income under the proposed policy.

She says weighing minor violations that heavily is not standard practice in most, if any, other states.

“Nobody is suggesting to relax things that would harm children or put that in jeopardy,” Wheat said. “We're not talking about those things. But for a provider to get written up because they don't have a certain number of early learning guidelines on their posted lesson plan in their classroom—is just extreme.”

Wheat believes OKDHS is punishing good childcare centers for the department's own mistake.

“We want an audit to see where they're spending the money because we feel like that there's enough money with the federal dollars that the state receives with the state required match that these wouldn't be issues,” Wheat said.

And if these rules are to be approved, she says Oklahoma’s childcare shortage will grow exponentially worse.

“You'll see people not accept subsidy all and go to a private pay model in those markets that can support that,” she said. “They just won't accept subsidy students and all. But not every market can be fueled by private pay… A lot of rural Oklahoma has a high percentage of subsidy students, and they just financially won't be able to stay open.”

Ultimately, Governor Stitt would be the one to approve or deny the proposal. The deadline is November 1.  

An OKDHS spokesperson sent News 4 the following statement:  

The goal of Oklahoma Human Services is for families to have access to affordable, quality child care. The pandemic-era level of spend is unsustainable without a significant potential impact to other vital services that Oklahomans depend on every day. We have a fiscal responsibility to taxpayers to maximize both federal and state dollars for the betterment of the entire human services system, which is why, in addition to other actions, we are considering modifications to the subsidy and Quality Rating and Improvement System (QRIS or Stars) ratings. Our objective in this process is to have minimal interruption for those who depend on subsidy and the other clients that depend on the human services system.  We look forward to working with stakeholders to determine the best path forward for Oklahoma.

Oklahoma Department of Human Services