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Proposal would shift Step Up to Quality subsidy increase to earlier level to boost provider uptake
Summary
LB 71 would accelerate a 5% childcare subsidy increase from Step 3 to Step 2 of Nebraska’s Step Up to Quality program. Sponsors and early-childhood groups said the change better targets early investments that help providers meet higher-quality standards and encourages more programs to accept subsidy-eligible families.
Senator Wendy DeBoer introduced LB 71 to change when Nebraska’s tiered childcare subsidy increase applies under the Step Up to Quality program. The bill would make the 5% subsidy increase available to providers when they reach Step 2 rather than waiting until Step 3.
Supporters—including child-care operators, hospital-based programs that run childcare centers, First 5 Nebraska and the Nebraska Early Childhood Collaborative—testified that many providers stall at Step 2 because the financial and coaching investments required to reach Step 3 exceed available resources. They said moving the subsidy bump earlier would help providers cover upfront costs, encourage acceptance of child-care subsidy, and expand options for working families.
Why it matters: Witnesses said Step Up to Quality drives the classroom practices that reduce school-readiness gaps. Participants described bottlenecks such as limited access to coaches (including Spanish-speaking coaches), one-time improvement costs, and staff shortages. Proponents said accelerating reimbursement would act as an incentive to accept subsidy and to continue improving quality.
Fiscal context and data: Testimony cited program enrollment growth—participation has more than doubled since 2020—and said the proportion of programs reaching Step 3 has not exceeded roughly 30%. Providers and hospital-based centers described operating shortfalls and the community benefit of running childcare programs in small towns or on hospital campuses. The bill carries a fiscal note; proponents urged creative budget solutions and noted long-term savings from improved child outcomes.
What didn’t change today: The committee took testimony but did not vote on LB 71 during the hearing.
Ending note: Sponsors and early-education advocates argued LB 71 is a relatively narrow adjustment with a multiplier effect: earlier subsidy support could increase provider participation in Step Up to Quality, expand subsidy access for working families and strengthen early-childhood outcomes over time.
