DSS warns of childcare funding shortfall; county starts wait list as state guidance, fair hearings complicate options

The Washington County Department of Social Services (DSS) told the Health & Human Services Committee on March 13 that it expects a shortfall in state-subsidized childcare funding and has placed eligible applicants on a wait list while it seeks state guidance and monitors claims and fair‑hearing exposure.

The committee heard that the county projected a shortfall in the neighborhood of $250,000 if existing caseloads continue and if the state does not allocate additional funds. DSS staff said the shortfall projection reflects the 12‑month ‘‘guarantee’’ the state provides to cases the county has already opened and the county’s inability to immediately stop payments when a fair hearing is requested (the agency said applicants can request "aid to continue," which keeps payments flowing until a hearing is resolved).

Why it matters: The state-managed childcare assistance program serves working families; a county shortfall could force DSS to freeze new enrollments, place eligible families on a wait list and confront a backlog of fair‑hearing claims that may keep benefits flowing and increase local costs. Committee members pressed staff on prioritization rules, data collection and possible local mitigation.

What the county reported

- Wait list: Washington County has opened a formal wait list for new applicants after notifying the state that demand exceeds available funds. DSS said it has seven applications already on the list, three pending applications, and an additional seven recertifications coming due in April that would also be added to the list.

- Shortfall forecast: In earlier projections discussed by DSS staff, continuing the existing open cases through their 12‑month guaranteed period would create a funding gap the county estimated at approximately $250,000. DSS emphasized that estimate is a forecast subject to change depending on state allocations and case closures.

- Fair hearings and "aid to continue": Staff explained that when a family asks for a fair hearing after a denial or reduction, they may request aid to continue, which keeps subsidy payments flowing until the hearing concludes. Backlog at fair‑hearing offices can delay final resolution, making it difficult for the county to reduce spending quickly.

- Prioritization and eligibility: DSS described federal and state income‑eligibility rules and said federal guidance prioritizes households under 300% of the federal poverty level, families who are homeless and children with special needs. The county said it is discussing how to structure prioritization if additional openings become available.

- Possible options: Staff discussed but did not recommend concrete local funding actions; options described included using other county funds in the short term, applying child‑welfare funds in specific cases (which carries legal and audit risk), or continuing the wait list to document demand for the state.

Committee reaction and next steps

Supervisors and committee members asked for more precise historic and comparative data (three‑year trends, comparisons with neighboring counties, the number of households that might leave employment without childcare and the cost implications to county safety‑net programs). Staff said they will provide a more detailed lookback and continue to report as allocations and caseloads change.

The committee did not vote to commit local funds during the meeting; DSS staff said the agency will continue to operate the wait list, track expenditures, and provide updated reports to the board. The county emphasized it is following state regulations and that any deviation (for example, denying aid without a wait list) could trigger legal or administrative consequences.