operate at the higher-quality levels . Programs need to serve mixed ages to cover some of the steepest losses , but in all instances , programs are operating at an overall loss .
• The cost model results show where state quality requirements are misaligned with the reality of program operations . State policies on child-to-adult ratios and taxing structures affect the program bottom line and drive decisions that impact quality and costs levied on families . For example , the current rate structure disincentivizes serving 3-year-olds in a 5 Star program , and licensing ratios and group size requirements are the same for 3- and 4-year-olds until a program reaches a 5 Star designation . 44
New York state engaged in a cost of quality care study in 2019 to inform advocacy efforts . QUALITYstarsNY ( QSNY ) is the state ’ s quality rating and improvement system . It is used as the starting definition of quality for the state – staffing patterns in the model reflect personnel needed to meet QSNY star level 3 . Model assumptions for wages included mandatory benefits for full-time employees , including workers compensation , unemployment insurance , and disability insurance . Discretionary benefits are based on the QSNY benefit options for full-time staff , which includes health insurance ; 5 days of paid leave ; and $ 1,000 annually per staff for training / consulting .
Analysis includes three scenarios to understand cost at different quality levels :
• Scenario 1 : With current salaries ( based on Aspire registry data ) by age group and region . Compares costs and gaps in revenue between current subsidy payments .
• Scenario 2 : Increased salaries . All staff earn at least $ 15 / hour and other salaries adjusted proportionally ( a 36 % increase to salaries for most staff ). Compares costs and gaps in revenue between current subsidy payments .
• Scenario 3 : K-12 teacher parity , by age group and geographic region . Lead teachers paid equivalent to 25th percentile of classroom teacher salaries , reflecting higher turnover rates among the early childhood workforce . Other staff receive proportionate raises . Compares costs and gaps in revenue between current subsidy payments .
In the family child care home model , the owner receives a salary equivalent to a lead teacher in each of the scenarios above .
Key findings from New York Cost of Quality Analysis : Current child care subsidy rates are insufficient to cover the cost of quality
• The size of the gap between subsidy rates and the true cost of quality varies by region , but exists across the state for infants and toddlers .
• In family child care homes , subsidy rates are insufficient to support a living wage for the provider .
Insufficient revenues keep workforce wages low and limit provider quality
• Current annual lead teacher salaries average around $ 30,000 outside of New York City and $ 43,000 in New York City , the equivalent of $ 14.50 / hour and $ 20 / hour , respectively .
44 Jeanna Capito , Jessica Rodriguez-Duggan , Simon Workman , “ Understanding the cost of quality child care in New Mexico : A cost estimation model to inform subsidy rate setting ,” ( Prenatal to Five Fiscal Strategies , 2021 )
2022 COST OF QUALITY CHILD CARE LEGISLATIVE REPORT 34