Thank you for the opportunity to provide public comment on the 2025-2027 Child Care and Development Fund (CCDF) state plan. While the dilemma of access to quality early learning and care was present prior to March 2020, the onset of the COVID-19 pandemic magnified the need to increase the investment in and refine the child care subsidy system in Missouri. With CCDF being the largest source of support for families with low-incomes to pay for child care and the programs that serve them, now is the time for Missouri to redefine how public funding is used to support the early learning and care industry, and more specifically the workforce. Since the CCDF state plan will not be revised again for three years, the current process provides a critical opportunity for DESE to improve current child care subsidy policies and practices.
The Office of Childhood has included the following critical improvements to Missouri's child care subsidy program in the current draft plan:
Payment to providers based on enrollment rather than attendance to stabilize child care, so that providers are able to provide services and families are able to access child care (aligned with 2024 federal CCDF rule)
Ensuring providers are paid increased rates for providing quality services via stacked quality enhancement differentials:
20% rate differential for accreditation
30% rate differential for disproportionate share (50% or more of children in their program are low-income)
50% rate differential for both accreditation and disproportionate share
Assuring family co-payments cannot exceed 7% of income (aligned with 2024 federal CCDF rule)
Why is this important for Missouri's families and workforce?
Access to affordable and high-quality child care supports not only the child's development, but also Missouri's workforce. Missouri's lack of access to child care has created a $1.35 billion dollar problem - the estimated annual loss for Missouri's economy simply because parents who would like to be in the workforce have difficulty accessing and affording child care. Solving the child care problem in Missouri has the potential to economically impact families, regions, and the state. In order to solve the child care crisis in Missouri, the Office of Childhood must go beyond the improvements in the current draft plan and include the following recommendations:
Recommendation 1: Increase subsidy reimbursement rates so that programs can provide quality care Missouri currently utilizes market rate surveys to set child care subsidy rates, a method that gathers data on the rates that parents can afford to pay (what programs charge), rather than the actual cost of providing care. On top of that, subsidy rates in Missouri are not funded at 100% of the market rate. Instead, current Missouri rates are 58% of the 75th percentile of market rates in most counties. By setting rates at this level, 42% of all providers accepting subsidy potentially operate at a loss when compared to non-subsidized families. Even if Missouri were to raise rates to the 75th percentile of the market rate, a quarter of all programs would be in the same situation.
1a: Ensure that the DESE Office of Childhood complies with current state guidelines and 2024 federal rule by including results from the 2024 market rate analysis in the 2025-2027 state plan
1b: Pay providers at least the 75th percentile of market rate in compliance with federal recommendations
1c: Uniformly increase reimbursement rates in all regions of the state to reflect inflation and cost of living
1d: Move toward paying providers based on the true cost of quality care and away from reliance on the market rate survey in setting reimbursement rates
1e: Ensure family child care provider reimbursement rates are equitable with center-based care reimbursement rates
Recommendation 2: Implement prospective payments to mirror the payment practices of parents in the private market to support the sustainability of providers' operations and encourage more providers to accept subsidy
2a: Articulate that providers will be paid in advance of services rendered or that they will be paid no less than six (6) business days for monthly invoices and payment resolution requests, including for differential rates
Recommendation 3: Increase and stabilize family access to child care subsidy
3a: Allow more financially-in-need families to qualify for subsidy - expand eligibility levels for families that qualify for full subsidy from 150% to at least 200% of the federal poverty level to ensure more families have access to needed assistance in paying for child care
3b: Pre-approve families beyond the two-week waiting period who likely qualify for subsidy while they await authorization, which is currently taking up to six (6) weeks, so that working families have timely access to assistance when they need it most
3c: Provide case workers or individualized support for families, so that they can navigate the complicated authorization system and the current malfunctioning online portal
Recommendation 4: Support caregivers, who are the heartbeat of the ECE workforce
4a: Provide additional benefits such as wage supplements for workforce participation, access to health care, or access to subsidy for the child care workforce, regardless of income
Thank you for your consideration.