Child Trends Report Details States’ Use of Increased Federal Child Care Funding

The Child Care and Development Block Grant (CCDBG) program provides federal funds to low-income families to help them afford high-quality child care. In 2014, a bipartisan reauthorization of the CCDBG Act made significant changes to improve the overall quality of care. Recognizing the need for further financial investments in order for states to meet the new quality and safety standards, Congress passed a bipartisan funding bill for fiscal year 2018 which increased the discretionary funding for CCDBG by $2.37 billion – almost doubling the previous year’s funding level. This week, Child Trends released a report that outlines how states have used, or plan to use, the increase in federal funding in order to meet the requirements of the 2014 reauthorization and improve the overall quality of child care. 

The report found that more than half of states plan to serve more children as a result of the new funding and more providers will receive reimbursements that more closely match the actual cost of caring for children. More specifically states have, or plan to: increase payment rates for providers (44 states and jurisdictions), implement quality and safety standards (38 states and jurisdictions), and expand access to child care assistance (30 states and jurisdictions). 

Child Trends also surveyed states and jurisdictions to understand which of the quality and safety standards the increased federal funds were supporting. The most common responses were: to conduct background checks (23 states and jurisdictions), reduce the amount that parents paid out of pocket (copayments) (11 states and jurisdictions), and provide pre-service health and safety training for all providers who receive subsidies (10 states and jurisdictions). These responses show the continued efforts by states to ensure that children are in high-quality care that working parents can afford.

In addition to gathering data on how states were utilizing funding, Child Trends also outlined two persistent challenges for states. A majority of states and jurisdictions reported that they would need additional funds to fully implement background checks and raise payment rates to the 75th percentile of the market rates. 

Child Trends’ report confirms the importance of federal investments in state child care systems. While challenges with background checks and parent copayment remain, the increased federal funds have empowered states to implement health, safety, and quality standards with fidelity. 

To see state specific data and read Child Trends’ full report click here.