Cutting childcare subsidies costs money in the short- and long-term, California edition

[Former employee of a non-profit organization Clarissa] Doutherd, who lives in Oakland, Calif., with her 4-year old son Xavier, had been able to cover the nearly $1,000 monthly child care bill thanks to a state subsidy that helps lower-income working parents. The support disappeared after budget cutbacks last year.

"In June, I had to quit my full-time job," after her salary was insufficient to cover her child care costs, she said. "I was on the brink of being able to pay the full cost, just another raise away from being completely self-sufficient" (MSNBC).

I love a good cliché, and the one that works best here is "penny-wise, pound-foolish." How much money is the state of California saving by cutting childcare subsidies? Better to ask, how much income is the state losing? Now that California forced Ms. Doutherd to quit a full-time job where she was expecting a raise, the state treasury is no longer receiving from her . . .

• Income tax, which would likely have gone up with her raise
• Sales tax, to the tune of 8.75% minus Oakland's cut, on purchases other than groceries, medicines, etc.
• Tolls, which finance road construction and seismic retrofitting of bridges

I don't know exactly how much her subsidy was, but it was something less than $1,000 per month. Clearly, she probably wasn't paying $1,000 per month in taxes. But let's say that she was, or that the state was actually spending that full amount, while keeping in mind that a 4-year-old kid won't require full-time daycare for much longer. For $1,000 per month, the state of California was helping her earn, save, and spend money, keeping it moving around and working for her and for the businesses and services she used. It was allowing her to maintain and even build her skills, and spend time with her colleagues and professional peers. It was helping her "bank" time at her job so that she'd get seniority and earn a raise. The other side of that coin: the non-profit organization employer was guarding some institutional memory, and thus was better able to use its state tax-exempt status to the benefit of its constituents in the state, by avoiding turnover in her accounting job. And the state was moving money to the federal government in the form of income and social security taxes -- the federal government loses some taxes now, and Ms. Doutherd will have a number of months or years where she won't be putting money into her own social security for later. And more, the state was helping Xavier get pre-school enrichment and socialization outside of the home that will help him when he enters kindergarten or first grade, particularly if the program he was in was something like Head Start (PDF), (PDF).

How long will Ms. Doutherd's household make it before she needs to apply for food stamps, utilities aid, subsidized housing, or some other assistance? Luckily for her, the article appears to state, she has just the one kid, and at age 4 he'll be in full-time school sometime soon. Until then, the household will be treading water and doing absolutely nothing to rebuild the state or national economy, all to save the state under $1,000 a month, on the back of a single mother. Great job, California!