There were two major victories for children’s advocates in the budget deal Congress reached earlier this year; the creation of the Family First Prevention Services Act (view our webinar for an overview) and the significant increase in federal funds for child care through the Child Care Development Block Grant (CCDBG). This February Congress approved the largest ever single-year increase in child care funds, $2.4 billion per year, of which approximately $42 million will come to Virginia. The CCDBG funds can be used for financial assistance to help low-income working families afford child care, as well as system-level improvements to promote safety and quality.
The most significant impact of the additional child care funds is a reimbursement rate increase for licensed providers that went into effect on June 1, 2018. The Virginia Department of Social Services (VDSS) will now reimburse licensed child care providers up to the 70th percentile of the market rate. That means families receiving a child care subsidy should be able to afford the cost of 70% of the child care providers in their community. Since rates have not been increased since 2013 this action will have a significant impact on child care providers!
The market rate is based on a survey of costs in each Virginia locality and thus the increase varies from locality to locality, age of child, and type of care.
The rate increases are significant in Northern Virginia where child care is the most expensive for families. For example, in Northern Virginia:
In the Richmond region, where child care is still expensive but costs are slightly lower, the subsidy rate increase translates to:
These increases are so significant that we hope they will enable low-income families to afford higher quality programs and to choose licensed, rather than unlicensed, providers. We also would like to see program administrators use the additional funds to increase salaries for early childhood educators, one of the lowest paid professions.
In addition to reimbursement rate increase, the additional federal dollars will be used to support system-level improvements to promote safety, improve eligibility, and promote quality. These items include:
VDSS is required to give a report to the General Assembly by September 1, 2018 for its plans to use the additional federal dollars, an additional $23 million in FY19 and $42 million in FY20. While the increase is authorized for two years, it is now included in the base budget at the federal level and we anticipate it will continue to be funded.Read More Blog Posts