Issue Briefing: Child Care Assistance for Low and Moderate-Income Families

HF 1747 (Bolden)

SF 1574 (Wiklund)

The short version

The Minnesota Child Care Assistance Program (CCAP) is the state’s largest program for infants  and toddlers, serving 30,000 children and 15,000 families. It offers financial support for child  care expenses based on family income, allowing parents to work and go to school. Currently  approximately 700 families are on the waiting list for the program but aren’t getting this  assistance because the program isn’t adequately funded. Minnesota’s reimbursement rate for  providers is well-below federally recommended levels and needs to be significantly increased.  JRLC supports additional funding to address the waiting list and increase provider rates.

The long version:

Many low and moderate-income Minnesota families cannot afford childcare without  assistance. This is a challenge statewide for several reasons. The first challenge comes from  the low rate of payment to those providing child care under CCAP. The federal government  recommends reimbursement at the 75th percentile of the market rate in their local area - and  Minnesota used to be there. Currently, providers are reimbursed at the 40th percentile for  infants and toddlers and the 30th percentile for other children. This means that the  program covers child care costs for only about a third of the providers in the any given part of  the state. We need to prioritize these children and families. Without an increase in the  provider rates, child care isn't profitable enough for many providers to continue in the  program.

In areas with great child care shortages (much of the state), providers don’t need to serve CCAP  families - they can charge a higher rate outside the program. More and more employers are  recognizing lack of child care as a real barrier to filling open positions. Raising provider rates  allows families to move into economic stability and assures employers have the workers they  need.  

Last session, legislators used federal funds to move Minnesota from the 25th percentile to the  30th/40th percentiles we have today. This was an important first step, but it isn’t enough to

address the child care crisis in our state. We need to continue to move toward the  recommended 75th percentile.

Second, a significant number of families are on a waiting list for assistance, some for over a  year. Currently the top five counties for waiting lists are Anoka, Becker, Benton, Hennepin and  Le Sueur. Our state needs to address the waiting list so that parents can work or go to school  and children are well cared for.

For information about how an increase in Child Care Assistance provider rates benefits your  county, follow these links:

For Metro counties:

Metro%20County%20Profiles%20SFY21 Tcm1053 519318

For Non-Metro counties:

Non Metro County Profile Sfy21 Tcm1053 519523

Key points to share with legislators

  • The Child Care Assistance Program allows parents to work and families to move into  economic stability.
  • We need to address child care provider rates to make sure we have enough providers  across the state.
  • The federal recommendations are to reimburse providers at the 75th percentile of the  market in our area. But we are only reimbursing at the 40th percentile for  infants/toddlers and even less for other children – the 30th percentile. We need to do  better.
  • Raising the reimbursement rates helps children, families, employers and our  communities.
  • If families are eligible for assistance, it should be available. They shouldn’t be placed on  a waiting list.