Family Economic Well-Being
An Excerpt From BBF’s “How Are Vermont’s Young Children & Families” 2017 Report
Family economic well-being considers whether families have adequate, sustainable financial resources to meet their needs. With a high cost of living, it is challenging for Vermonters to make ends meet while ensuring their children receive high- quality opportunities. In fact, research shows that poverty is the single greatest threat to a child’s well-being.36
Vermont has seen an overall decrease since 2009 in the percent of all families with young children under 5 who live in poverty (Figure 10). This includes a decrease in the percent of single mothers with related children under 5 living in poverty. However, the percent of single mothers with children under 5 living in poverty is three times greater than that of all families with children under 5 living in poverty. Many of these families face significant economic challenges affording basic needs such as food, transportation, housing, and access to early care and learning programs.
Wages in Vermont have not kept pace with expenses and single parent households are particularly vulnerable.37 Vermont’s Basic Needs Budget, developed by the Joint Fiscal Office, estimates the level of income needed by an individual or family to afford basic needs in both urban and rural Vermont. This budget demonstrates that a family would need to earn wages significantly higher than Vermont’s current minimum wage, and well above the federal government’s poverty threshold, to be able to comfortably afford living in Vermont. Table 8 summarizes some of the data from Vermont’s Basic Needs Budget.
To complicate matters, many of the Vermont benefits designed to remediate the challenges of poverty have a benefit cliff effect; as a family’s gross income increases, even marginally, it can result in the loss of critical benefits and a reduction in family resources.38
In 2016, 50.7% of Vermont families who rented and 32.6% of families who had a mortgage spent more than 30% of their household income on housing (Figure 11).
According to the Vermont Affordable Housing Coalition (VAHC), Vermonters would need to make $21.90 per hour (or $45,545 per year) to afford a modest, two-bedroom apartment at the Fair Market Rent. At Vermont’s current minimum wage, individuals would need to work 88 hours per week, or 2.2 full- time jobs, to afford this housing.39
Families who can’t afford housing may become homeless. For families experiencing homelessness, there are a number of publicly funded emergency shelters that offer safe sleeping spaces. While the number of children under the age of 18 who are sheltered has been variable over the past few years (Figure 12), their average length of stay in homeless shelters has been steadily increasing to a record high of 44 days.40
Child Care and Vermont’s Child Care Financial Assistance Program (CCFAP) Child care is unaffordable for many Vermont families, even in two-parent households where both parents work. Vermonters are spending a significant amount of their earnings on housing, which limits their options for childcare, nutrition, healthcare, and beyond. Using information from the 2015 Child Care Market Rate Survey conducted by the DCF Child Development Division, the annual statewide median cost for a two-parent family with one infant and one preschooler in a full-time, center-based child care program was $21,221.72.41
The Child Care Financial Assistance Program (CCFAP) helps families who meet certain work, education, and income requirements to afford child care for their children 6 weeks to 13 years. Children in protective custody, children and parents or guardians who meet certain health and income criteria, and parents or guardians in short term crisis are also eligible for CCFAP.
CCFAP makes payments (known as the reimbursement rate) directly to a child care provider on behalf of a family. The amount of the payment is determined by the age of the child, the income and size of the family, the type of child care program, the program’s quality designation in STARS, and the number of hours in which care is needed. Families pay a co-payment directly to providers to make up the difference between what the state pays and what the provider charges.
Over time, CCFAP’s reimbursement rates have not kept pace with the cost of child care due to program funding constraints. This leaves a gap between financial assistance payments and the current market rates for child care programs. It means that a family eligible for 100% financial assistance may still have a co-pay for their child care provider, often making early care and learning unaffordable.
Strategies to Turn the Curve
Below are several strategies underway in Vermont to improve family economic well-being.
- Increased Investment in CCFAP: For the last two years, the Vermont legislature has made incremental investments in the CCFAP. While more investment is needed, this commitment in a tough budgetary environment has helped support Vermont families.
- Housing bond: In 2017, Vermont passed a $35 million housing bond to support the creation of rental housing and home ownership opportunities for 550-650 low- and moderate-income Vermonters over the next two to three years. This new initiative represents the largest state investment in housing in more than a decade.
LINK TO THE ACTION PLAN: Goal #3, “High-Quality Opportunities for All Children,” includes implementation of policies that enhance family stability and economic security, including initiatives that address homelessness and housing needs.
Click here to view the full How Are Vermont’s Young Children & Families 2017 report
36 National Center for Children in Poverty. (2016). Topics: Child poverty. Retrieved from http://www.nccp.org/topics/childpoverty.html.
37 Vermont Legislative Joint Fiscal O ce. (2017). Basic needs budgets and the livable wage: Prepared in accordance with 2 V.S.A . § 505. Retrieved from http://www.leg.state.vt.us/jfo/reports/2017%20BNB%20Report%20Revision_ Feb_1.pdf.
38 The University of Vermont. (2017). The bene ts cli . Retrieved from https://www.uvm.edu/~vlrs/EconomicIssues/Bene ts%20Cli .pdf.
39 Vermont A ordable Housing Coalition. (2017). A ordable housing is out of reach for low-wage Vermonters. Retrieved from http://www.vta ordablehousing. org/news/wp-content/uploads/2017/06/2017-VT-Out-of-Reach-press-packet.pdf.
40 Vermont Department for Children and Families. (2017). Housing opportunity grant program (HOP) annual report – State scal year 2017. Retrieved from http://dcf.vermont.gov/sites/dcf/ les/OEO/Docs/HOP-Final-Report.pdf.
41 Vermont Department for Children and Families. (2017). 2015 Vermont child care market rate survey. Retrieved from http://dcf.vermont.gov/sites/dcf/ les/ CDD/Reports/Market_Rate_Survey_Report_2015.pdf
F14. U.S. Census Bureau. (2009). Table DP03: Selected economic characteristics (Vermont), 2009. American Community Survey 1-Year Estimates. Retrieved from https://fact nder.census.gov/faces/tableservices/jsf/pages/productview. xhtml?pid=ACS_09_1YR_DP3&prodType=table.
F15. U.S. Census Bureau. (2010 – 2016). Table DP03: Selected economic characteristics (Vermont), 2010 – 2016. American Community Survey 1-Year Estimates. Retrieved from https://fact nder.census.gov/faces/tableservices/jsf/ pages/productview.xhtml?pid=ACS_15_1YR_DP03&prodType=table.
F16. U.S. Census Bureau. (2010 & 2016). Table S0201: Selected population in the United State (Vermont), 2010 & 2016. American Community Survey 1-Year Estimates. Retrieved from https://fact nder.census.gov/faces/tableservices/jsf/pages/ productview.xhtml?pid=ACS_09_1YR_S0201&prodType=table.
F17. Vermont Department for Children and Families. (2016). Housing opportunity grant program (HOP) Vermont annual report – state scal year 2016. Retrieved from http://dcf.vermont.gov/sites/dcf/ les/OEO/Docs/HOP-Final-Report.pdf.
T20. Vermont Joint Fiscal O ce. (2017). Basic needs budgets and the livable wage. Retrieved from http://www.leg.state.vt.us/jfo/reports/2017%20BNB%20 Report%20Revision_Feb_1.pdf.
T21. U.S. Census Bureau. (2016). Table B19119: Median family income in the past 12 months (in 2016 in ation-adjusted dollars) by family size (Vermont), 2016. American Community Survey 1-Year Estimates. Retrieved from https://fact nder.census.gov/faces/tableservices/jsf/pages/productview. xhtml?pid=ACS_15_1YR_B19119&prodType=table.
T22. Vermont Department for Children and Families. (2017). 2015 Vermont child care market rate survey. Retrieved from http://dcf.vermont.gov/sites/dcf/ les/CDD/Reports/Market_Rate_Survey_ Report_2015.pdf.
T23. Vermont Department for Children and Families. (2017). Child care nancial assistance rate schedule and sliding fee scale – August 21, 2016. Retrieved from: http://dcf.vermont.gov/sites/dcf/ les/CDD/Docs/ccfap/CCFAP_Rate_Schedule_ E ective_August_2016.pdf.
T24. U.S. Department of Health and Human Services. (2016). US federal poverty guidelines used to determine financial eligibility for certain federal programs. Retrieved from https://aspe.hhs.gov/poverty-guidelines.