DCYF previews 2026 market‑rate study and warns of new 40% response threshold in HB 2689

Matt Judge, Federal Initiatives and Collaboration Administrator at the Department of Children, Youth, and Families, previewed the 2026 market‑rate study that feeds Washington’s Working Connections subsidy base rates and explained how a recent law changes how the state can use that data.

Judge said the study uses two methods to inform subsidy rates: a market‑rate side that surveys licensed providers about what private‑pay families are charged, and a cost‑of‑quality cost model that calculates provider fixed costs and higher quality wage and staffing assumptions. “You can set subsidy rates by asking providers what they charge, or you can use a cost model that reflects what it actually costs to run high‑quality care,” he said.

The legislature passed House Bill 2689 in the most recent session. Under the law, the state will set base rates at the 75th percentile of market rates beginning July 1, 2027, Judge said. He emphasized that 75th percentile is not “75% of the market rate” but rather means the subsidy would be at a level that is equal to or higher than the private‑pay rates for 75% of slots in a given region and age group.

The bill also added a data‑quality requirement: by the 2028 study cycle, DCYF must achieve at least a 40% provider response rate in each subsidy region (regions 1–6 plus Spokane) and not see that regional response drop below the prior study’s rate. If a region does not meet those thresholds, the legislation prohibits using that region’s market‑rate data to set subsidy rates, Judge said.

Judge described outreach and survey methods: email and mailed invitations, call‑center follow‑ups, postcards, targeted Excel upload forms for multi‑site operators, local provider meetings and webinars run by Western Washington University, which administers the study on DCYF’s behalf. He said centers generally have higher response capacity than family homes, and that responses are weighted by slots served, not simply by provider count.

Providers asked how DCYF will handle regions that fail to meet the 40% threshold. Judge said the statute does not lay out a re‑survey process and that it is unclear what the legislature might do if data for a region is disqualified. “The honest answer is I don’t know what happens at that point,” he said. He added the legislature may have authority to set rates by other methods.

Multiple providers raised concerns about language access and data integrity after some Spanish translations of the survey contained errors that made questions mismatched with English options. Judge acknowledged the problem and apologized, saying DCYF and its vendor worked to correct the Spanish and Somali versions and reached out to affected providers.

Next steps: DCYF plans to work with Western Washington University to streamline the market‑rate portion of the survey (so providers can complete the legally critical fields more quickly), expand outreach strategies and begin planning for the 2028 survey deployment window in October–December 2027. The legislative report and final study publication will follow DCYF’s internal accessibility review.