Implements automatic market rate increases for child care assistance

• Democratic18

◆ The sponsor's argument

Why Jessica Ramos says this is needed

In New York, child care providers that exclusively serve families and children on subsidies must complete extensive paperwork to receive mark- et-rate payment increases, as their operating costs increase. This unnecessarily disadvantages providers that serve low-income families, and hits home-based providers acutely. Providers may choose to offer child care to private pay, low-income families that don't qualify for subsidies, and still serve subsidized families. However, under the current system providers who serve private pay, low-income families are still penalized because they are paid less than the market-rate for any subsidized families served. Counties that allocate subsidy slots using contract systems are allowed to lock programs into old market rates, even when the rate increases mid-contract, for the duration of the contract. The date their contract is up for renewal is due to no fault of the provider, and does not take into account whether their costs to provide care have increased since the previous market rate was established. This burdensome process is not a requirement of the federal Child Care and Development Fund (CCDF) program, which helps states administer child care assistance. It is implemented solely at the discretion of New York State. Removing this barrier will allow more families to be served, and ensure our providers are reimbursed at the appropriate cost for care. Additionally, every two years OCFS conducts a market rate survey among licensed, registered and legally-exempt child care providers. The survey collects data on what child care providers are charging for child care. The data collected is then used to set a payment rate to providers for subsidized care. While useful in setting rates, the market rate survey does not necessarily reflect the actual costs of providing child care. Child care providers have many fixed costs such as maintaining adequate staff, complying with building codes as well as regulatory and licensing requirements; yet they can only charge what the market is willing to pay. When corresponding subsidy rates are not high enough, the quality of child care sometimes suffers as providers struggle to make ends meet. This bill states that a cost estimation model can be utilized for each category of care for which a market rate is determined. A cost esti- mation model provides valuable data on the actual cost of providing child care, not just what price is charged to parents. Such information can then be used to determine the adequacy of the rate paid to provid- ers, as well as infolin policy decisions to ensure child care providers remain stable.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.