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Federal Formula Grants: Federal Child Care Programs
Tim Ransdell and Shervin Boloorian

June 2005

The fast-growing, multibillion dollar federal child care financing system provides resources primarily to low- and moderate-income families to subsidize child care services and activities. With women entering the workforce in record numbers in recent years, government-supported public and private child care networks have come to serve as an economic aid for growing numbers of working families, including federal welfare recipients. Studies monitoring the effect of child care services indicate that the availability of such services can measurably increase the likelihood that a welfare family will successfully transition from government assistance to self-sufficiency.

This report reviews federal child care programs and the formulas used to distribute child care assistance funds to states, discusses California’s child care receipts under the current formula framework, compares the state’s experience to that of other states, and considers the effect of key child care reauthorization proposals in Congress on child care financing policies.