PROVIDENCE — Scott Smith doesn’t want to turn children away from the YMCA.

“I think that people want to be able to turn to the Y as one of those places they can always rely on,” he said.

But starting this week, the YMCA and other child-care providers will begin denying service to many lower-income families on state-subsidized childcare. The providers say they have no choice, given years of stagnant reimbursement rates from the state and a new rate formula approved by the General Assembly that takes effect today.

Roughly 1,900 children were disqualified from the state child-care program Sept. 1 after the Assembly narrowed eligibility requirements. But countless more children in before- and afterschool programs stand to lose placements this week, Smith said, because of the new reimbursement rates.

“These cuts directly affect the agencies. That means we can no longer afford to operate centers, we have to close sites,” Smith said. “We’re turning a lot of families away. The reality is we’re not able to accept certain types of these vouchers. It’s just not fair.”

The YMCA of Greater Providence has already closed six urban centers and laid off between 12 and 15 staff members because so many of its children lost child-care eligibility last month, Smith said. And the rate changes will probably lead to more reductions.

The YMCA simply can’t afford to accept some children for less money, he said.

Until this week, the state paid a flat rate for children in daycare before or after school, even if they spent less than an hour there. The new arrangement dramatically reduces payments to providers by paying them essentially for only as long as the children are in care.

Before today, the state paid a child-care center as much as $85 weekly for the two to three hours each weekday a child spends at the YMCA. This week, however, that same provider will receive $33.

The daycare centers complain that they will be asked to provide the same services for less money; and they have limited ability to reduce costs. They cannot, for example, hire staff for just two or three hours a day.

Advocacy groups also note that while the rate structure has been adjusted, the actual rates are based on a market survey conducted in 2002. Federal law requires each state to conduct surveys every two years to ensure that reimbursement rates are adequate.

And researchers continue to produce the surveys, although the rates have not been adjusted in the last five years.

The state has contracted with the University of Rhode Island to conduct comprehensive market rate surveys in 2004 and again 2006. Each cost more than $14,000.

But actual rate increases have been delayed by the General Assembly in recent years in order to help balance the budget.

That means that parents who pay for child care with state vouchers receive enough money for adequate child care at 2002 costs. The result, according to Rhode Island Afterschool Alliance head Jeff Gale, is that low-income Rhode Islanders have fewer and fewer daycare centers to choose from. Facilities with better-trained staff and better facilities can simply deny children trying to pay with outdated vouchers.

It will be difficult to track how many children will lose placements this week. Smith says he doesn’t keep such records. And it’s equally difficult to determine where parents are turning if they can’t depend on places such as the Y.

Gale worries that some parents may depend on unlicensed facilities, leave children home alone, or forgo work to care for their children.

“Essentially, the child-care program helps working families to actually work. It’s a work-force development issue,” Gale said.

House Finance Committee Chairman Steven M. Costantino, D-Providence, said he would have loved to have improved child-care rates, but the money simply hasn’t been there.

“When you have diminishing revenues and a budget deficit, you try to prioritize which of those items you want to add money to,” he said. “We just haven’t been able to fund the increase that the market study says we should be at.”

In this past session, Costantino said, Assembly leaders made a decision to amend the governor’s proposal to reduce child-care eligibility from families earning 225 percent of the federal poverty level to 150 percent. The legislature restored $11.8 million to the program based on the governor’s proposed cut, raising eligibility to 180 percent of the federal poverty level — approximately $30,906 for a family of three.

“We felt the eligibility issue was the key issue,” Costantino said. “After we did that, the money for the other issues just wasn’t there.”

And while places such as the YMCA have been forced to deny children, other daycare centers are struggling to find grant money or hold fundraisers to keep their children.

The East Providence Boys & Girls Club expects to lose $20,000 to $30,000 over the course of the next year because of the rate cuts, according to director Erin Gilliatt.

Afterschool care, she said, costs the nonprofit center about $89 each week per child. Under the state’s new financing formula, Gilliatt’s facility would receive a reimbursement of $67. That wouldn’t cover their costs, she said.

“Our board is prepared to do the extra fundraising we need to do to ensure we’re there for the community,” Gilliatt said, adding that the Boys & Girls Club hopes to avoid denying care for any children.

“We don’t want to see a 5- or 6-year-old getting dropped off at a bus stop and walking into an empty house. I am horrified at the tough spot people have been left in.”

speoples@projo.com