Providers say they won’t survive cuts made by the Oklahoma Department of Human Services (DHS) to child care subsidies for school-age children. Oklahoma’s largest trade association for the child care industry is suing the department to stop it from enforcing the directive it made during the federal government shutdown.
The suit was filed by the Licensed Child Care Association of Oklahoma in the Oklahoma County District Court, over a month after DHS sent a letter at 5 p.m., Oct. 30, to child care providers.
The department announced the removal of a $5 per day “add-on” to providers’ subsidy rate schedule – implemented during the COVID-19 pandemic – for children ages six and older. It also halted new applications and renewals for these children, with exceptions for those in foster care, with disabilities and who are unhoused. Subsidies expire on a rolling basis.
Both policies became effective Nov. 1.
What are providers and DHS saying?
Kelly Gomez is the owner of Our House Learning Center in Norman. The child care center is licensed for 87 children and works at full capacity. All of them receive subsidized child care, with school-age kids making up the largest portion of her enrollment.
She said the $5 per day enhanced rate drastically impacted the quality of care her center could provide by allowing her to pay her teachers better and not worry about purchasing extra activities for her kids.
“They started us on this idea that this funding was going to be there, that we were going to be able to receive good pay for the children and the hard work that we were doing,” Gomez said.
“How can I go to a teacher and say, ‘I'm sorry, I'm going to pay you $2 less an hour now.’ You can't do that to people.”
Following the department’s Oct. 30 directive, Gomez said families have shown up at her door in tears, saying they can’t get their older children’s cases renewed and don’t know what to do. For now, that won’t stop her from serving them.
“As these kids fall off, and DHS isn't paying, I am still going to provide care to these families. I'm not turning them away,” Gomez said. “A lot of facilities won't do it, and I'm not saying that I can do it. I'm going to do it until I can't make the rent anymore. And that's scary.”
In a press release, DHS argues that factors like the expiration of temporary federal COVID-era funding, rising enrollment and continued uncertainty following the government shutdown resulted in the need for action.
It said the state was given additional, one-time federal incentives, which allowed more families to access care, supported school-age services and increased reimbursement rates for providers.
“When those federal funds were fully exhausted, Oklahoma Human Services used Temporary Assistance for Needy Families as a short-term bridge to help families continue receiving care,” the press release said. “No replacement appropriations have since been approved to sustain those emergency-level expansions.”
The agency has asked for $70 million to “stabilize the child care system and prevent future funding cliffs.”
“The system cannot continue to swing between emergency funding and emergency cuts,” said DHS Director Jeffrey Cartmell after a Wednesday Child Care Advisory Committee meeting. “Oklahomans need reliable, high-quality child care access for working families, and stable funding is the only way forward.”
What does the lawsuit entail?
Tammy Maus, president of the Licensed Child Care Association of Oklahoma, said the lawsuit originated out of an effort to support the group’s members.
“We really evaluated it, we reached out to legislators, and we honestly felt like we had reached a dead end on every single avenue,” Maus said.
The lawsuit argues that DHS treated the $5 per day add-on as a standard component of its reimbursement structure, representing it as a measure “to promote stability, improve quality, expand capacity and support Oklahoma families and providers.”
“Providers reasonably developed reliance interests based on this stability, structuring staffing, budgeting, enrollment, facility operations, and long-term financial commitments, including loans and banking arrangements, in accordance with the reimbursement rates OKDHS itself established and maintained,” the lawsuit reads.
It states that DHS “reversed course,” characterizing the add-on as “temporary, unplanned and COVID-dependent.” The association argues that because the Oct. 30 decision alters eligibility, reimbursement and access for providers serving school-age children, it should require a statewide policy change with formal rulemaking. The lawsuit adds that DHS did not satisfy the requirements for emergency rulemaking.
The association also maintains that, under state law, an agency “may not adopt, amend or repeal a rule by internal policy, memorandum, bulletin, guidance document, directive or letter.”
“DHS’s use of an internal directive letter to impose sweeping statewide policy changes violates this statutory prohibition,” the lawsuit reads.
It also suggests DHS acted beyond its statutory authority, and “arbitrarily and capriciously.”
The lawsuit asks the court to reinstate the $5 per day add-on, resume school-age applications and renewals and refrain from implementing policy changes absent compliance with state law.
Gomez, the child care owner from Norman, said this year has proved difficult for providers. Facilities also navigated new DHS rules based on the Quality Rating and Improvement System, known as the Stars program. It awards different ratings to early childhood programs based on their abilities to meet standards related to curriculum, child outcomes and learning environments.
DHS assigns programs a quality rating between one and five stars, which are tied to reimbursement rates. To maintain the highest level of reimbursement, non-accredited five-star programs were required to get nationally accredited. They were given months to complete a process that typically takes one to two years, or face a star reduction.
Gomez met the moment, getting accredited in three months only by working late into the night and returning to work early the next morning. She said she has done everything that has been asked of her.
“But this last cut, this facility will not be able to survive,” Gomez said.
Gomez worries facilities won’t be able to wait for a $70 million appropriation to get approved.
“We're hoping, and we're praying that this judge sides with us, that they pause it, and that they at least have to continue to fund it for the time being, which also gives us more time,” Gomez said.
StateImpact Oklahoma is a partnership of Oklahoma’s public radio stations which relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online.
