Pennsylvania’s Child Care System: Access, Affordability, and Quality
Both state and federal resources provide funding for CCW. The federal Child Care and Development Block Grant Act (CCDBG) authorizes the Child Care and Development Fund (CCDF) program. OCDEL administers CCDF and outlines how these federal funds can be used to provide financial assistance for low-income families to access child care. States must develop plans to show how they will provide that assistance so parents/caregivers can work or attend job training or an educational program. States also must provide a match for a portion of their CCDF dollars and may allocate additional funds for child care through their state budgets. OCDEL makes “base subsidy payments” directly to providers through the Early Learning Resource Center network to help support the cost of subsidized care to individual children. The base subsidy payments are determined through a market rate survey process conducted by OCDEL, which is completed every three years. Cost of Quality Care Pennsylvania reimburses child care providers for the care of children receiving child care subsidies at a rate that significantly shortchanges child care providers for the hard work they do. Each year, a market rate survey (MRS) examines the fees that child care providers typically charge families per unit of care in the priced child care market and uses this data to set the reimbursement rate for child care providers serving children who receive a subsidy. The objective of the MRS is to understand what families who do not receive a child care subsidy are being charged for child care services so that payment rates can be set. However, the market rate survey reflects the price that families can afford to pay, not the actual cost
of care providers spend to serve children, as many child care programs do not want to charge beyond what families can afford for fear of losing clients or harming families’ ability to provide for their children. When using this reimbursement method, the federal Office of Child Care recommends that subsidy rates be set at the 75th percentile or higher of the current market rate to allow for equal child care access for families participating in the child care subsidy program. This federal benchmark is a proxy for equal access but is insufficient. Most states, including Pennsylvania, do not meet even this flawed benchmark. Pennsylvania’s rates rose to the 60th percentile because of one-time American Rescue Plan Act funding that will expire in September 2024. 36 Before that funding, Pennsylvania’s reimbursement was at the 25th percentile, covering only a fraction of the cost of providing child care. Market rate surveys deepen inequities in communities where families cannot afford high- cost child care, as the prices reported in the MRS skew low due to families inability to afford the true cost of care. This means that child care providers in those communities ultimately receive lower subsidy reimbursement rates than providers in communities where families can afford a higher cost for child care. While intended to reflect the local cost of living, the impact of using a market rate survey system to set subsidy payment rates exacerbates low quality and low wages while also disproportionately affecting people and communities of color. 37
Continued on next page
2023 State of Early Care and Education
13
Made with FlippingBook - Online magazine maker