ANNUAL JLBC CHILD CARE REPORT
SFY 2007
Table of Contents

I.

Annual JLBC Child Care Report - State Fiscal Year 2007

............ Pages 1-4

II.

Table 1 - Families and Children Served and Total
Payments by Child Care Program

............ Page 5

III.

Table 2 - Transitional Medical Assistance (TMA)
& Transitional Child Care (TCC)

............ Page 6

IV.

Table 3 - Child Care Assistance Gross Monthly Income
Eligibility Chart and Fee Schedule

............ Page 7

V.

Table 4 - Maximum Reimbursement Rates for Child Care

............ Page 8

VI.

A.R.S. 46-810 - Department of Economic Security:
Child Care; Report

............ Page 9

VII.

JLBC Report Transmittal Letters

............ Pages 10-25

ANNUAL JLBC CHILD CARE REPORT

Pursuant to A.R.S. § 46-810, the annual report for members of the Joint Legislative Budget
Committee is provided. The information reflects statewide data for state fiscal year 2007, and
provides comparative information from state fiscal year 2006.
1.

The number of families served and total number of children served by each of the child
care programs administered by the Department of Economic Security.
In state fiscal year 2007, the total number of children served on an average monthly basis
was 44,609 and the total number of families served in all programs on an average monthly
basis was 24,223 (see Table 1). This is a .2 percent increase in terms of children and a
.2 percent increase in terms of families over fiscal year 2006.
Note: The average number of children served (paid for) in a given month was approximately
85.5 percent of the number authorized for service in that month in fiscal year 2007.

2.

The total number of dollars spent on child care for each of the child care programs
administered by the Department of Economic Security.
In fiscal year 2007, the estimated 1 total number of subsidy dollars spent for the
Department’s child care programs was $177,077,100 (see Table 1). This is a 7.1 percent
increase over fiscal year 2006 spending, which was $165,339,198. These figures do not
include operating expenditures and quality expenditures.

3.

The number of recipients eligible for Transitional Medical and Child Care benefits.
All Transitional Medical Assistance eligible recipients are enrolled in AHCCCS. As of
June 2007, there were a total of 42,583 children eligible and receiving Transitional Medical
benefits, a 2.9 percent decrease compared to June 2006 figures.
As of July 9, 2007, there were 9,630 children eligible for Transitional Child Care (TCC).
That is a 10.3 percent decrease from fiscal year 2006. The decrease in TCC participation in
fiscal year 2007 correlates with a 9.5 percent decrease in the TANF Cash Assistance
caseload for the same period. Based on fiscal year 2007 data, on average 86.0 percent of the
authorized Transitional Child Care children actually utilized child care assistance at any
given point each month.

4.

The number of recipients who accept Transitional Medical and Child Care benefits
specifying how many recipients have received these services for less than 12 months
and those who have received these services for more than 12 months.
In June 2007, the number of recipients of Transitional Medical Assistance, in the first 12
months of eligibility, was 42,583, a 2.9 percent decrease compared to June 2006 figures (see
Table 2). Beginning October 2002, Transitional Medical Assistance was no longer provided

1

Based on information from the Arizona Child Care Automated Tracking System report, a cash basis report intended
for use as a management tool report only and is not intended for use as a financial report.

Annual JLBC Child Care Report
September 20, 2007

Page 1

for the second 12 months of the transition period. The second year of TMA coverage was a
part of the EMPOWER waiver that expired November 1, 2002. Since state statute
A.R.S. § 36-2924 was passed to not extend the availability of the second 12 months, TMA
went to a maximum of 12 months effective October 1, 2002.
As of June 2007, there were 8,387 children, 4,850 in the first 12 months of eligibility and
3,537 in the second 12 months of eligibility, receiving Transitional Child Care (TCC).
This is a 5.6 percent decrease from fiscal year 2006. Table 2 shows the number of children
utilizing service throughout the year.
Although there was a 5.6 percent decrease in Transitional Child Care (TCC) participation in
fiscal year 2007, this is less than half of the 12.3 percent decrease in TCC experienced in
fiscal year 2006. The decrease in TCC participation in fiscal year 2007 correlates with a 9.5
percent decrease in the TANF Cash Assistance caseload for the same period.
5.

The number of applicants waiting for services under the state child care subsidy and
federal child care programs for working families.
A waiting list was not necessary in fiscal year 2007.

6.

Co-payment levels for each of the child care programs administered by the
Department of Economic Security.
Child care assistance is a key component in helping families achieve and maintain selfsufficiency. It not only supports families in their transition off of Cash Assistance but also
is a vital service to those who, without childcare, would potentially need to apply for Cash
Assistance. Child care must be affordable to meet a family’s needs.
Both federal Child Care Development Fund (CCDF) regulations and Arizona statute require
the Department to develop a sliding fee scale, which maintains child care cost sharing
between the state and families.
Laws 2005, Chapter 328, required that co-payments be imposed for all children in nonmandatory categories, including low-income working, teen parent in high school, and
special circumstances, but not child protective services (CPS) referred families receiving
child care assistance.
The child care co-payment required of DES eligible parents must be reasonable and
affordable, and enable low and moderate income families access to good quality child care.
Families at lower income levels must spend an increasingly high percentage of family
income on necessities such as rent, utilities, food and clothing. The percentage of family
income available for child care is less than families at higher income levels.
The DES sliding fee scale (see Table 3), effective July 1, 2006, consists of six fee levels,
wherein parents are required to pay between $1 and $10 per day for the first child, and a
lesser daily co-payment for any additional child(ren) in the family. Child care assistance for
families eligible under the block grant eligibility categories (low-income working, teen
parent, and unable/unavailable) will be limited to six children in the eligible family at any
given point in time and co-payments will be assigned to all eligible children who require

Annual JLBC Child Care Report
September 20, 2007

Page 2

assistance. For families receiving Transitional Child Care (TCC), there is no co-payment
assigned beyond the third child in the family and no limit to the number of eligible children
who may be authorized for assistance.
In addition, families must pay any difference in cost between the maximum that the
Department pays and the amount the child care provider actually charges.
7.

The amount of co-payment money collected for each of the child care programs
administered by the Department of Economic Security.
In fiscal year 2007, the total amount of DES required co-payment collected for all programs
was $15.2 million. In fiscal year 2006, the total required co-payment collected was $14.3
million (see Table 1). This represents an increase of 6.3 percent. The increase is
attributable to the overall increase in the number of children served and a shift away from
children in mandated service eligibility categories that do not require co-payments. As
noted in the previous section and in addition to the required co-payments, families must pay
any difference in cost between the maximum that the Department pays and the amount the
child care provider actually charges.

8.

The total number of payments to relatives for child care and the number of children
served.
In fiscal year 2007, 8,580 children received child care assistance for care received from
relatives, which is a 10.0 percent decrease in the number of children from fiscal year 2006.
The total dollars reimbursed for relative care in fiscal year 2007 was $8.5 million. This
amount represents an 11.4 percent decrease from fiscal year 2006 figures.
The 10 percent decrease in the number of children who used relative care in fiscal year 2007
is likely explained by 2 factors: 1) Jobs participants historically use relative care to a greater
extent than other clients as it is the most affordable option; the Jobs Child Care caseload
declined by 16 percent during fiscal year 2007 due to the privatization of the Jobs Program;
and 2) some of the children in relative care shifted to formal care arrangements; the total
number of children served in fiscal year 2007 increased slightly by .2 percent.

9.

Any changes in payment rate schedules and maximum provider rates from the
previous fiscal year and the reason for those changes.
Eligibility for child care services continues to be set at 165 percent of the federal poverty
level (FPL) as specified in A.R.S. § 46-803. There was one change to the rate schedule
during the fiscal year. The rate schedule in fiscal year 2007 was adjusted to reflect the new
FPL guidelines (see Table 3).
Prior to fiscal year 2007, maximum reimbursement rates were based on the 75th percentile of
the 1998 market rate survey. Effective July 1, 2006, maximum payment rates for child care
providers for fiscal year 2007 were adjusted to reflect the 75th percentile of the 2000 market
rate survey (see Table 4).

10.

The number of families providing child care as a work activity in order to meet the
Federal Work Participation Rates established pursuant to Public Law 104-93.

Annual JLBC Child Care Report
September 20, 2007

Page 3

Public Law 104-193 identifies 12 activities as allowable work activities in reference to
individuals receiving Temporary Assistance to Needy Families (TANF) Cash Assistance.
This list includes “the provision of child care services to an individual who is participating
in a community service program.” This activity is distinguished from unsubsidized
employment as an allowable work activity in the law, and refers to the provision of child
care services by Cash Assistance recipients to other Cash Assistance recipients as an unpaid
work activity, solely for the purpose of meeting the work participation rate. A.R.S. § 46101.24 does not include this as a countable work activity; therefore, the Department does
not promote or track the provision of unpaid child care services by Cash Assistance
recipients for the children of other Cash Assistance recipients for the purpose of meeting the
work participation rate.
The rationale for not using this unpaid child care activity is described below:
1)

Encouraging the use of untrained and uncompensated Cash Assistance recipients as
child care providers could place the safety of children in jeopardy, and the
Department in a position of liability for any resultant harm or injury.

2)

Arizona operates a parental choice model with respect to the child care assistance
program (in accordance with Child Care & Development Fund regulations).
Requiring Cash Assistance recipients to utilize other Cash Assistance recipients in
the provision of child care services would be inconsistent with the parental choice
requirement which requires that the parent be allowed to select between different
provider types.

3)

Cash Assistance recipients who are not trained or compensated for the provision of
child care services are not increasing their potential to become gainfully employed.
Further, Cash Assistance recipients who express the interest and aptitude to pursue
employment in the child care field should be encouraged to pursue short term child
care training through the “Child Care Professional Training Program” (CCPT). The
Department contracts with community-based agencies and community colleges
throughout Arizona to deliver the 60-hour child care orientation and training
curriculum. Upon completion of the CCPT course, the Cash Assistance recipient
will be better prepared to pursue employment with child care facilities, Head Start
programs, or become self-employed as a DES certified family child care provider.
Cash Assistance recipients who are trained and compensated for the provision of
child care services would be represented in the “unsubsidized employment”
category.

4)

Developing and managing a process to track the hours of unpaid child care activities
would be administratively burdensome at best; it is doubtful whether the benefits of
this proposition would outweigh the costs since the activity would not lead to gainful
employment and would not assist the Cash Assistance recipient in becoming self
sufficient.

Annual JLBC Child Care Report
September 20, 2007

Page 4

TABLE 1
FAMILIES AND CHILDREN SERVED AND TOTAL PAYMENTS BY CHILD CARE PROGRAM
State Fiscal Year 2007

Child Care Program

Families Served (1,3)

TANF Cash Assistance Related
Employed Child Care
JOBS Child Care
Transitional Child Care
Transitional Child Care Extension
Low Income Working
Special Circumstances
Child Protective Services
Others
Totals

Children Served (1,3)

Expenditures (2,3)

Copayment Collected (2,3)

676
1,345
2,677
1,742

1,358
2,501
5,245
3,546

$
$
$
$

5,279,776
9,291,262
20,302,764
13,951,172

$
$
$
$

1,806,555
1,470,536

13,693

24,877

$

95,887,561

$

11,691,120

3,450
640

6,082
1,000

$
$

28,329,890
4,034,674

$
$

216,254

24,223

44,609

$

177,077,100

$

15,184,464

Notes:
(1) Monthly Average.
(2) Annual Total.
(3) This report is a summary of disbursements and caseload data made by the issuance of warrants from AzCCATS, the Arizona Child
Care Automated Tracking System. This report is not intended for use as a financial report.

JLBC Annual Report as Required by A.R.S. § 46-810

September, 2007

TABLE 2
TRANSITIONAL MEDICAL ASSISTANCE (TMA) & TRANSITIONAL CHILD CARE (TCC)
State Fiscal Year 2007
FY 2007 Month
July
August
September
October
November
December
January
February
March
April
May
June

TMA 01 - 12 Months (1)
43,728
44,326
44,371
45,805
46,500
46,704
47,324
46,316
45,774
44,379
44,348
42,583

TMA 13 - 24 Months

(1,3)

-

TCC 1 - 12 Months (2,4)
5,394
5,486
5,179
5,682
5,635
5,427
5,190
5,134
4,988
4,961
5,011
4,850

TCC 13 - 24 Months (2,4)
3,648
3,513
3,404
3,740
3,604
3,444
3,423
3,461
3,564
3,618
3,598
3,537

Notes:
(1) TMA eligibility recipients are all enrolled in AHCCCS.
(2) TCC is the number of children served (utilization estimated at 86.0% of the number eligible).
(3) In October 2002, a DHHS waiver that had been granted to Arizona expired. As a result of the expiration of this waiver, TMA was
no longer available to families beyond 12 months after Cash Assistance case closure.
(4) This report is a summary of disbursements and caseload data made by the issuance of warrants from AzCCATS, the Arizona Child
Care Automated Tracking System. This report is not intended for use as a financial report.

JLBC Annual Report as Required by A.R.S. § 46-810

September, 2007

TABLE 3

ARIZONA DEPARTMENT OF ECONOMIC SECURITY
CHILD CARE ASSISTANCE GROSS MONTHLY INCOME ELIGIBILITY CHART AND FEE SCHEDULE
EFFECTIVE JULY 1, 2006

Family
Size
⇓

FEE LEVEL 1
(L1)
INCOME
MAXIMUM
EQUAL TO OR LESS
THAN 85% FPL*

FEE LEVEL 2
(L2)
INCOME
MAXIMUM
EQUAL TO OR LESS
THAN 100% FPL*

FEE LEVEL 3
(L3)
INCOME
MAXIMUM
EQUAL TO OR LESS
THAN 135% FPL*

FEE LEVEL 4
(L4)
INCOME
MAXIMUM
EQUAL TO OR LESS
THAN 145% FPL*

FEE LEVEL 5
(L5)
INCOME
MAXIMUM
EQUAL TO OR LESS
THAN 155% FPL*

FEE LEVEL 6
(L6)
INCOME
MAXIMUM
EQUAL TO OR LESS
THAN 165% FPL*

1

0 – 695

696 – 817

818 – 1,103

1,104 – 1,185

1,186 – 1,267

1,268 – 1,349

2

0 – 935

936 – 1,100

1,101 – 1,485

1,486 – 1,595

1,596 – 1,705

1,706 – 1,815

3

0 – 1,177

1,178 – 1,384

1,385 – 1,869

1,870 – 2,007

2,008 – 2,146

2,147 – 2,284

4

0 – 1,417

1,418 – 1,667

1,668 – 2,251

2,252 – 2,418

2,419 – 2,584

2,585 – 2,751

5

0 – 1,658

1,659 – 1,950

1,951 – 2,633

2,634 – 2,828

2,829 – 3,023

3,024 – 3,218

6

0 – 1,899

1,900 – 2,234

2,235 – 3,016

3,017 – 3,240

3,241 – 3,463

3,464 – 3,687

7

0 – 2,140

2,141 – 2,517

2,518 – 3,398

3,399 – 3,650

3,651 – 3,902

3,903 – 4,154

8

0 – 2,380

2,381 – 2,800

2,801 – 3,780

3,781 – 4,060

4,061 – 4,340

4,341 – 4,620

MINIMUM REQUIRED CO-PAYMENTS
1st child
in care
2nd child
in care
3rd child
in care
4th child
in care
5th child
in care
6th child
in care

full day = $1.00
full day = $2.00
full day = $3.00
full day = $5.00
full day = $7.00
part day = $ .50
part day = $1.00
part day = $1.50
part day = $2.50
part day = $3.50
full day = $ .50
full day = $1.00
full day = $1.50
full day = $2.50
full day = $3.50
part day = $ .25
part day = $ .50
part day = $ .75
part day = $1.25
part day = $1.75
full day = $ .50
full day = $1.00
full day = $1.50
full day = $2.50
full day = $3.50
part day = $ .25
part day = $ .50
part day = $ .75
part day = $1.25
part day = $1.75
For families receiving Transitional Child Care (TCC) there is no co-payment assigned beyond the 3rd child in the family
full day = $ .25
full day = $ .50
full day = $ .75
full day =$1.25
full day = $1.75
part day = $ .10
part day = $ .25
part day = $ .35
part day = $ .60
part day = $ .85
full day = $ .25
full day = $ .50
full day = $ .75
full day = $1.25
full day = $1.75
part day = $ .10
part day = $ .25
part day = $ .35
part day = $ .60
part day = $ .85
full day = $ .25
full day = $ .50
full day = $ .75
full day =$1.25
full day = $1.75
part day = $ .10
part day = $ .25
part day = $ .35
part day = $ .60
part day = $ .85

full day
part day
full day
part day
full day
part day

= $10.00
= $ 5.00
= $ 5.00
= $ 2.50
= $ 5.00
= $ 2.50

full day
part day
full day
part day
full day
part day

= $ 2.50
= $ 1.25
= $ 2.50
= $ 1.25
= $ 2.50
= $ 1.25

Full day = Six or more hours; Part day = Less than six hours.
Families receiving Child Care Assistance based upon involvement with Child Protective Services/Foster Care, the Jobs Program, the Arizona Works Program or those who are
receiving Cash Assistance (CA) and who are employed, may not have an assigned fee level and may not have a minimum required co-payment. However, all families may be
responsible for charges above the minimum required co-payments if a provider’s rates exceed allowable state reimbursement maximums and/or the provider has other additional
charges.
*

Federal Poverty Level (FPL) =US DHHS 2006 poverty guidelines.

TABLE 4

ARIZONA DEPARTMENT OF ECONOMIC SECURITY
Division of Employment & Rehabilitation Services
Child Care Administration
MAXIMUM REIMBURSEMENT RATES FOR CHILD CARE
Based on the 75th percentile of the 2000 Child Care Market Rate Survey
as indentified in the Fiscal Year 2007 Appropriation Report
(effective for services provided on or after 7/1/06)
CENTERS

Age Group
Birth < 1 yr:
Full day
Part day
1 yr < 3 yrs:
Full day
Part day
3 yrs < 6 yrs:
Full day
Part day
6 yrs < 13 yrs:
Full day
Part day

District I

District II

District III

District IV

District V

District VI

30.20
22.40

27.00
19.80

22.40
18.40

21.00
19.00

30.00
25.00

32.00
25.00

26.60
20.00

25.00
18.16

20.80
18.00

19.00
18.00

28.00
15.00

20.80
17.60

23.80
17.00

22.09
16.00

20.00
15.00

18.00
16.00

20.00
12.40

19.00
13.00

23.40
16.00

22.00
15.00

17.00
14.00

17.00
15.00

20.00
13.33

19.00
13.00

Age Group
Birth < 1 yr:
Full day
Part day
1 yr < 3 yrs:
Full day
Part day
3 yrs < 6 yrs:
Full day
Part day
6 yrs < 13 yrs:
Full day
Part day

District I

District II

District III

District IV

District V

District VI

24.00
16.00

22.00
16.00

23.00
23.00

20.00
14.00

19.00
12.50

21.20
18.00

22.00
15.00

22.00
16.00

22.00
15.00

18.00
12.00

19.00
12.00

21.25
17.00

20.00
15.00

20.00
16.00

22.00
13.95

18.00
12.00

19.00
12.00

18.50
16.00

18.00
14.00

20.00
15.81

17.00
13.95

18.00
12.00

19.00
12.00

18.50
17.00

Age Group
Birth < 1 yr:
Full day
Part day
1 yr < 3 yrs:
Full day
Part day
3 yrs < 6 yrs:
Full day
Part day
6 yrs < 13 yrs:
Full day

District I

District II

District III

District IV

District V

District VI

20.00
14.00

19.00
12.00

18.00
10.00

18.00
10.50

20.00
12.00

18.00
10.00

20.00
13.00

18.00
12.00

17.00
10.00

17.00
10.50

20.00
11.00

17.00
10.00

18.00
12.00

18.00
12.00

16.00
10.00

17.00
10.50

18.00
10.00

16.00
10.00

17.00

18.00

16.00

16.00

18.00

16.00

12.00

11.00

10.00

10.00

10.00

10.00

GROUP HOMES

CERTIFIED FAMILY HOMES & CERTIFIED IN-HOME PROVIDERS

Part day

The actual reimbursement amount is equal to the reimbursement rate minus any DES designated co-payment. However, in no event shall the
amount reimbursed exceed the lesser of the provider’s actual charges or the maximum reimbursement rate minus any DES designated co-payment.
Payment Rates for Non-Certified Relative Providers (NCRPs) will be $10.50 for Full day and $6.00 for Part day, minus any DES designated copayment. This rate will be paid to NCRPs statewide for care provided to children of all ages.
The maximum reimbursement rates may be increased by up to ten percent for child care providers who are nationally accredited.
Full day = six or more hours per day. Part day = less than six hours per day.
DES defines six local areas based upon geographic proximity/common characteristics, as Districts. They are comprised of the following counties:
District I - Maricopa
District IV - La Paz, Mohave, and Yuma
District II - Pima
District V - Gila and Pinal
District III - Apache, Coconino, Navajo, and Yavapai
District VI - Cochise, Graham, Greenlee, and Santa Cruz

46-810. Department of economic security; child care; report
The department of economic security shall provide the following data by October 1 of
each year to the members of the joint legislative budget committee:
1. The number of families served and total number of children served by each of the
child care programs administered by the department of economic security.
2. The total number of dollars spent on child care for each of the child care programs
administered by the department of economic security.
3. The number of recipients eligible for transitional medical and child care benefits.
4. The number of recipients who accept transitional medical and child care benefits
specifying how many recipients have received these services for less than twelve
months and those who have received these services for more than twelve months.
5. The number of applicants waiting for services under the state child care subsidy and
federal child care programs for working families.
6. Copayment levels for each of the child care programs administered by the
department of economic security.
7. The amount of copayment money collected for each of the child care programs
administered by the department of economic security.
8. The total number of payments made to relatives for child care and the number of
children served.
9. Any changes in the payment rate schedules and maximum provider rates from the
previous fiscal year and the reason for those changes.
10. The number of families providing child care as a work activity in order to meet the
federal work participation rates established pursuant to Public Law 104-193.