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Board approves FY25 increase to childcare financial assistance reimbursement rates
Summary
The Board of Early Education and Care voted to adopt the department's recommended Option 1 for FY25 childcare financial assistance (CCFA) reimbursement rate increases, a package aimed at moving rates closer to the cost of care and directing additional funds to the rates farthest below cost.
The Board of Early Education and Care voted to approve the Department of Early Education and Care's Option 1 proposal for fiscal 2025 reimbursement rate increases for programs that accept state childcare financial assistance (CCFA).
The board approved a recommendation described by staff as a targeted approach that dedicates more funding to rates that are farthest from a cost-of-care benchmark while also providing increases across all program types and regions. Amy Checkaway, EEC senior staff, told the board that the agency's analysis showed per-child costs rose between 12% and 26% over the prior two years depending on age group, program type and region. She said the department aims to use a cost-based methodology to inform rates and to prioritize places and program types furthest from the estimated cost of care.
The board acted on line-item and supplemental budget language, and the motion approved the department's recommended Option 1. Board members then completed a roll-call vote; all members present voted yes. Secretary Toutweiler and the chair also voted in the affirmative, and the motion passed.
EEC staff said the FY25 package is funded out of an appropriation of $22,500,000 for rate increases; staff estimated the cost of the Option 1 proposal at about $22.2 million after accounting for the proposed adjustments and noted a small reserve to cover a retroactive payment. The proposal also included a retroactive 50-cent-per-day increase to an add-on rate for the period July'September 2024.
Staff described improvements made last year, when the board used the first formal cost-of-care analysis to inform rates: consolidation of some geographic rate tiers, notable across-the-board increases and targeted increases for the lowest-paid rates. Amy Checkaway said last year's changes increased center-based rates to about 81% of the then-estimated cost of care and raised the lowest rates from 56% to 72% of cost-of-care using 2022 data.
Board members and staff emphasized that rates are only one factor affecting program participation and stability. Amy Checkaway told the board EEC data show program participation in the CCFA system increased to about 68% from roughly 63% in March. She said the department will continue to refine cost models with its research partner, AIR, and expects an executive summary of the cost research this spring.
The vote and staff presentation concluded the agenda item; commissioners and board members thanked the staff and the governor and legislature for funding the increases.
Votes at a glance
- Motion: "That the Board of Early Education and Care hereby approves the department's recommendation Option 1 as presented regarding the FY25 rate increase for providers of subsidized early education and care." Moved and seconded on the record; motion adopted. - Roll-call vote (recorded on the transcript): Jamila Lee ' yes; Dr. Kim Lucas ' yes; Georgia Tannasoff ' yes; Jen James Price ' yes; Carolyn Kane ' yes; Maria Mueller ' yes; Nikki Ruiz ' yes; Dr. Linda Sager ' yes; Secretary Toutweiler ' yes; Chair ' yes. Outcome: approved.
Ending
EEC staff said the department will continue to refine cost assumptions, monitor program participation, and provide a more detailed cost-research executive summary this spring.
