General Assembly Proposals Seek to Stabilize Child Care
Leading Senators on Health & Social Services and Education Committees have introduced two bills responding to advocate priorities focused on Purchase of Care, a state subsidy, which has been underfunded for decades. The bills will pay child care providers a statewide rate and stabilize support for families and providers.
Senate Bill 58 will extend policies adopted during the COVID-19 public health emergency, in which the Delaware Health and Social Services (DHSS):
- …Did not charge “copays” for Delaware families earning up to 200 percent of the federal poverty level. Copays are the amount families are required to pay on top of the state subsidy; in some cases, Delaware had copayment requirements in place well beyond the federal recommended maximum of seven percent.
For example, a family making $44,000 pre-tax would be paying $4,000 in copays toward child care per year. (This is on top of “plus” payments that child care programs are allowed to charge families to make up the difference between the state subsidy rate and their own tuition rate.) By limiting copays for families who have the greatest need for support, the state provided stability to families and the early learning programs supporting them.
Brain development does not start at age five; all children deserve opportunities for early learning and development. In the future, we may reach the level of other developed nations that provide comprehensive care and education to all families. Short of that, Delaware may put in place a sliding scale, where the families most in need pay nothing and as a family’s income increases, they pay a portion up to seven percent of their income. This is a strategy some nonprofit providers already employ in Delaware by “scholarshipping” some (or all) students to offset the low rate the state pays.
- …Reimbursed Purchase of Care providers for 15 absent days per child per month. Unlike pre-K-12, where schools are funded for a child for the year, child care is funded based on daily attendance reporting, which can be unpredictable. With absent days covered by the state, providers have assurance that the child’s place in the classroom can be held, ensuring continuity of care and building the bonds and strong relationships key to child development.
Delaware’s state-sponsored pre-K option, Early Childhood Assistance Program (ECAP), has avoided this challenge thanks to its unique funding structure. The program is managed through state contracts, similar to pre-K-12, where children’s slots are funded for the year. Starting in the fall, this program will serve zero-through-five year olds statewide with higher quality standards.
In the future, we hope all early learning programming can be managed through contracts, which create predictability and stability for providers and families—while establishing oversight and transparency for government. Contracts ensure funds are being used to support high-quality programs with fairly paid staffs.
DHSS included both of these items in its full FY23 budget, so these can take effect immediately upon being signed into law and avoiding a disruption in the policies being “unwound” as part of the end to the public health emergency.
Another bill, Senate Bill 59, directs DHSS to pay a statewide rate to all child care providers aligned with the rate paid to providers in New Castle County. For decades, early care programs in Kent and Sussex counties—and those who operate statewide—have been penalized as much as 40 percent for providing the same service.
How? State subsidy rates have been based on a faulty “market rate” that doesn’t actually reflect the cost of providing care to children. The market for child care is considered to be fundamentally broken nationally—and named as such by the U.S Treasury and U.S. Department of Labor in recent years.
Costs, on the other hand, are similar statewide. Teacher salaries, which make up the majority of providers’ budgets, are similar, with most providers paying minimum wage or more to keep up with other employers, and costs for supplies and food have been rising similarly.
This bill would take effect May 1; a recent DHSS report indicates that existing funds can cover this expense in the current budget year—and the state is receiving an additional annual $4 million from the federal government that can go toward evening out investment levels.
These are common sense policy changes that will stabilize child care in Delaware as we build toward our long-term aspirational system where children get the developmental experiences they all deserve—and where young families are supported and attracted to Delaware. We thank the General Assembly for their action and leadership on these issues—and look forward to working with the Joint Finance Committee to increase rates to cover the cost of child care in FY24.