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House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted:	May 23, 2017 12:41 PM
From:	Representative Jason Ortitay
To:	All House members
Subject:	Legislative Budget and Finance Committee Study of Child Care Costs

In the near future, I will introduce a resolution to direct the Legislative Budget and Finance Committee to conduct a study on the costs of high quality child care compared to available funds. The last study by the Legislative Budget and Finance Committee on child care was published in 1999 - nearly 20 years ago. In the interim, Pennsylvania’s Office of Child Development and Early Learning (OCDEL) has been created. The office has implemented many programs to incentivize continuous quality improvement and affect subsidy rates, including Keystone STARS, tiered reimbursement, and Pre-K Counts and Head Start Supplemental Pre-K programs. Despite these improvements, the percentage of employees in the early childhood field who continue to receive poverty wages has not changed substantially in the last two decades. Many providers struggle to blend public dollars with private payments to effectively maintain operations and provide quality care. Among the largest costs include staff wages and benefits, staff professional development, and facilities costs. The number one factor affecting the quality of a program is staff-child interactions, meaning investments in human capital are essential for the industry. For children at risk, the most common form of public support is subsidized care through Pennsylvania’s Child Care Works program. Child care subsidy rates in Pennsylvania have been frozen since 2007, although expenses for child care providers continue to rise. In 2015, Pennsylvania’s subsidy rates fell in the 33rd percentile of what providers charge, far below the 75th percentile that the federal government cites as necessary for giving low-income families a similar choice of quality programs as more affluent families. The federal government has raised concern about Pennsylvania’s rates in its CCDBG conditional approval letter, and indicated an impending further review and monitoring visits. Child Care Works subsidy rates are not meant to fully support a program. Yet as programs accepting children on subsidy decrease, high numbers of children on subsidy are becoming more concentrated in fewer programs. The revenue received for children on subsidy is not sufficient to retain quality staff and meet the state’s QRIS standards. Programs that do not receive revenue through Child Care Works subsidies also struggle to make ends meet. A study conducted by the Legislative Budget and Finance Committee to analyze subsidy rates compared to costs of providing high quality childcare will provide important policy guidance in prioritizing state and federal resources. I encourage you to join me in cosponsoring this important resolution.

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