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Spotlight on early childhood: child care subsidy rates drive quality

*By Michele Rivest, Executive Director of the NC Child Care Coalition

This post is part of a blog series on the crucial role of quality early childhood education and child care in caring for our youngest residents, creating thriving communities, and promoting a healthy economy. Learn more about the programs we are discussing this week and take action here.

Although low-income working families rely on child care subsidies to work and for their children’s early learning opportunities, child care centers rely on adequate rates to support high quality program operations.

When child care rates fail to keep pace with actual market costs, the entire child care system is jeopardized — child care programs are unable to attract and retain qualified teachers because of inadequate salaries, classroom teacher-to-child ratios are increased, educational materials become scarce, and facility environments are neglected.

Worst of all, inadequate rates can lead to fewer low-income children being served as child care centers refuse to accept low-income working parents who can’t pay the full cost of care. When priced out of the market of high quality programs, these parents have fewer child care options and may be forced to accept low-quality care which can compromise a child’s learning and development, and even safety.

Without a doubt, the cost of operating a high quality child care program is high—the average cost of a two-year-old child in a 5 star-rated license program is $997 a month.  This cost is beyond the ability of many families, but especially those who are low-income.

North Carolina’s most recent market rate study was conducted in 2012, but child care subsidy rates have been frozen since 2007. As a result, the gap between the actual market rate and reimbursement rate for child care continues to grow.  For example, in Mecklenburg County, the 2013 market rate for a two-year-old child in a 5 star-rated license child care center is $975 per month, although the reimbursement rate is only $751, or a gap of $224.  And it’s not just an urban problem: child care centers in rural counties face the same issue with reimbursement rates falling significantly short of actual costs each month.

Child care programs deserve to be paid the true cost of their services, but not just for the sake of the sustainability of the child care industry. Research clearly shows that only high quality child care programs produce results and benefits for disadvantaged children, and offer the best return on the investment of public dollars. It’s time for North Carolina to invest smarter and pay better child care rates now to guarantee its own future prosperity.

Child Care Subsidy Reimbursement Rates for a 2-Year-Old Child in a 5 Star Center

2013 Rates

2007 Rate Paid

Gap

Wake

$1,153

$845

$308

Mecklenburg

$975

$751

$224

Buncombe

$742

$611

$131

Pitt

$763

$693

$70

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