A rate setting model is used to determine reimbursement rates for child care programs accepting WCCC subsidies . The new cost of quality care rate setting model is meant to replace the current methodology , which is based on market prices that families can afford rather than on operating costs incurred by child care providers . In addition to informing DCYF ' s rate setting model , the cost estimation model allows policymakers and stakeholders to examine per-child costs and revenue sources to identify sustainable models for supporting child care programs in Washington .
To develop a cost of quality care estimation model for Washington , a study was designed by Prenatal to Five Fiscal Strategies ( P5FS ) ( Appendix E ). This cost of quality care study centered the experiences of providers . P5FS used several modes of information gathering and input from providers and stakeholders , including a provider survey , interviews with providers , and focus groups . Based on the cost of quality care study , P5FS developed a cost estimation model to help policymakers estimate the costs of operating a child care program . The cost estimation model is meant to estimate per-child costs ; it is not a budgeting tool .
The cost of quality care study and the cost estimation model confirm that current sources of revenue are insufficient for licensed child care programs , both public and private . Even when estimating the cost of care using current provider wages ( which are overwhelmingly low ), subsidy reimbursement rates barely cover the cost of providing care – in some cases , subsidy rates fall short of actual costs . The cost estimation model highlights the essential need for public investments in living wages , benefits and activities that support quality improvement .
Per the Legislature ' s directive , the task force is pleased to present P5FS ' s technical report ( see Appendix E ) and related recommendations for adopting the cost of quality care estimation model to make child care more affordable for families and more sustainable for providers .
Per the Legislature ' s directive , the recommendations in this report are focused on the child care workforce and are in service of increasing access to affordable , high-quality care for children and families . 11 The task force discussed the Working Connections Child Care ( WCCC ) subsidy system as a potential mechanism for addressing workforce compensation and expanding access for families most in need . However , because only 13 % of eligible children from birth through five years currently receive assistance through the WCCC subsidy program , there are limitations to relying on subsidy rates alone to fix the broken child care market . 12 Ultimately , the task force adopted the four recommendations below to stabilize the industry — public and private programs alike — in anticipation of future expansions to WCCC . These synthesized recommendations are outlined in greater detail in the Recommendations section of this report .
Recommendation 1 : Adopt a WCCC rate setting model in the 2025-27 biennial budget based on the cost estimation model and incorporating
living wage salaries , benefits , and resources for program enhancements that support quality .
Recommendation 2 : Distribute significant relief payments to licensed child care programs serving children from birth through age 12 and to individual members of the child care workforce .
2022 COST OF QUALITY CHILD CARE LEGISLATIVE REPORT 8