Lawmakers consider boost to MN's child care assistance reimbursement rates

Minnesota’s Child Care Assistance Program provider reimbursement rates are well below the national average, and providers say that’s jeopardizing the industry and disadvantaging families.

Sponsored by Rep. Liz Boldon (DFL-Rochester), HF1747 would increase the rates paid to child care providers under the assistance program and eliminate the basic sliding fee program waitlist for families.

The bill was held over by the House Early Childhood Finance and Policy Committee Tuesday for possible omnibus bill inclusion. The companion, SF1574, awaits action by the Senate Human Services Reform Finance and Policy Committee. Sen. Melissa Wiklund (DFL-Bloomington) is the sponsor.

The program provides subsidies to low-income families for early childhood opportunities while parents are working or in school.

Under current law, the state’s reimbursement rate for providers is set at the 25th percentile based on the 2018 child care provider rate survey administered by the Department of Human Services. The bill would increase the maximum rates to the 75th percentile of the most recent survey.  

The bill would also direct Minnesota Management and Budget to include the basic sliding fee child care assistance obligation in the February and November economic forecasts, beginning in November 2021. This would help to eliminate a waitlist of approximately 2,000 families who are eligible to participate but haven’t been served due to a lack of funds. The proposal includes a yet-to-be-determined appropriation.

Liz Harris, a family child care provider, says the rate increase would be a game changer and could help address child care shortages.  

“By raising the CCAP reimbursement rate and eliminating the waiting list it would entice more providers like me to participate in the program, expanding choices for parents who use it,” she said. “It may also attract new providers into the field.”