There was a time when Sharanette Cottonham felt she had to be on welfare because all of the jobs she found barely covered child-care costs for her four children.

It was only when the 34-year-old Silver Spring resident received her first day-care vouchers through a county welfare-to-work program in 1994 that she was able to get on her feet--first as a McDonald's manager, then as an auditor for a medical insurance company.

Slowly, she disengaged herself from government checks and food stamps. But she said she couldn't have made it without the more than $800 in monthly child-care vouchers she still receives from the state.

"I wouldn't be working if they didn't help me," Cottonham said.

June will be her first month without any state aid except for the vouchers.

For Cottonham and other Maryland residents trying to escape the welfare rolls, adequate day care is critical.

Since President Clinton signed the federal welfare reform bill in 1996, about 139,000 Maryland residents have dropped off welfare rolls. From January 1997 to January 1998, applications for day-care subsidies rose 29 percent, according to a report published this month by the National Center for Children in Poverty.

Maryland helps low-income families afford day care by giving vouchers for about 25,000 children statewide with no time limits on subsidies. Maryland also has been able to provide vouchers without putting families on waiting lists as other states have.

That is primarily because Maryland's day-care voucher program helps just the poorest of the poor, said Helen Blank, director of the Children's Defense Fund child-care division.

For a family of three to qualify for state aid, it must make less than $18,409, although that eligibility will be raised slightly by next year, state officials said. The parents pay a portion of their income, and the state pays the rest.

The eligibility standards for co-payments are stringent so the state can help all qualified families, Maryland officials said. But some advocates such as Linda Rogovin, director of public policy for the Maryland Committee for Children, say the standards hamper the efforts of many mothers to wean themselves from welfare.

Jennifer Bailey, a day-care center operator in Gaithersburg, said many of the parents at her center struggle with the financial requirements.

"I've seen parents [decline] raises because it would cost them more in the long run to keep their child in care than what they would make in the raise," she said.

Parents' difficulties in finding stable, long-term work also can produce bumps in child care; half of the children who used vouchers in 1997 were dropped from the program, at least temporarily. Blank said that's likely because their parents either lost, quit or changed jobs.

Once the parents found work, the vouchers were provided again. But the interruptions and changes in care can be developmentally disruptive to children, especially ones who already may lead chaotic lives because of their parents' financial troubles, Blank said.

Blank said she hoped the data provided in the report would lead to policy discussions about creating steady care for children even if their parents' work patterns are in disarray.

The report, which also studied the use of vouchers in Illinois, is one of dozens of attempts by think tanks and advocacy groups to gauge the changes brought about by welfare reform.

Although voucher use has increased 58 percent in Maryland alone since 1997, information about families who apply for subsidies is still sparse. State officials said that knowing who uses vouchers and what kind of care families purchase with them is critical to creating policy.

"By looking at the patterns of usage, then we can extend plans to build capacity and meet the needs of the families that require subsidized care," said Linda Zang, program chief in the child-care administration of Maryland's Department of Human Resources. "It's a really good planning tool."

Among other findings, the study noted that most Maryland families with subsidies use center-based care, as opposed to informal family care. State child-care experts said that could be attributed to the heavy regulation of family care in Maryland, making licensed informal programs harder to come by.

And, according to the study, about a quarter of the children using subsidized care in 1998 were infants and toddlers. About two-fifths were school-age. Child-care advocates said those figures highlight the demand for more programs regardless of whether they are subsidized.

There are slots for about 200,000 children in Maryland's licensed centers and family programs, but more than twice that many youngsters in the state have mothers who work. Infant care is especially hard to come by, advocates said.

"We have a waiting list longer than 100 names," said Judith Smith, director of Bright Horizons Children's Center in Silver Spring. "We may see them when their child is a toddler or a 2-year-old."

J. Lee Kreader, a senior policy analyst at the National Center for Children in Poverty, said he hoped the study would prompt officials to ensure that children are getting the best quality care.

"States need to look at where their babies are being cared for," he said.