Washington State has a demonstrated commitment to supporting the needs of young children and families . The Child Care Collaborative Task Force , created by the state legislature in 2018 , has helped elevate the needs of the early childhood sector , especially considering the impacts of the COVID-19 pandemic . A key part of the Task Force ’ s charge is to increase access to affordable child care for all Washington families . To further this goal , the Task Force commissioned a study to better understand the true cost of providing high-quality child care across the state .
In fall 2021 , Prenatal to Five Fiscal Strategies ( P5FS ) launched a child care cost of quality study , which included developing a dynamic cost estimation model to address the immediate questions around cost and to serve as a tool to support long-term planning in the state . This work built on efforts begun in 2019 , when P5FS supported a
cost study and development of a cost model . This work was interrupted by the COVID-19 pandemic and the study team opted not to add additional burden to providers by requesting their participation . As a result , the study was missing a vital component in that it did not include input and feedback from child care providers themselves . For this most recent study , the P5FS team conducted deep constituent and provider engagement to inform the study , determine assumptions , vet cost data , and review initial results from the cost model . Development of the model was commissioned by the Department of Commerce on behalf of the statewide Child Care Collaborative Task Force , with support from the Department of Children , Youth and Families ( DCYF ), the state agency with responsibility for Working Connections Child Care Program subsidy rate setting . The model was also developed with input from the Seattle Department of Early Education and Learning , and King County Best Start for Kids , to develop a tool that could also support local efforts to better understand the true cost of care .
This report provides background on the provider engagement activities that informed the cost model , details on the cost model methodology , and results of default scenarios to illustrate the functionality of the cost model tool .
Subsidy Rate Setting in a Broken Child Care Market
The prevalent method of setting reimbursement rates for publicly funded child care under the federal Child Care and Development Fund , or
CCDF , is through a market rate approach . This approach , currently used in Washington to set Working Connections Child Care subsidy rates , relies on a study of market prices for child care through a market rate survey . Data from the market rate survey is then used to set maximum reimbursement rates for subsidized child care . States are required to conduct CCDF rate setting every three years and are encouraged to set rates at a level that provides for “ equal access ” to the market for families using subsidies and those paying full tuition .
However , the market-based approach to subsidy rate setting results in subsidy rates that reflect prices providers charge families , which are frequently a reflection of what families can afford , not the actual cost of the care . The cost of child care for a family with young children can be an overwhelming burden , particularly for a family earning a low
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