Even with state subsidies, families in Washington still cannot afford child care and providers are struggling to pay their staff, according to a new report.
Washington’s Department of Children, Youth and Families is required to study market rates for child care every three years to determine how much the state should be reimbursing private providers for families who use its subsidy programs. It released the findings in July.
Almost 1,400 providers, of the state’s 5,779, responded to the survey.
Here are four key takeaways.
Subsidy rates are ‘far below’ what state law says they should be.
The state is required to reimburse providers for subsidies that families use to pay for child care at 85% of the market rate for care, according to state law. (This rate varies across different regions and age groups.) Based on the 2024 data, almost no subsidy meets the 85th percentile requirement.
For the most part, rates are “far below” that benchmark, according to the report. In some cases, the gap between the rate that a provider is reimbursed and what they should be getting based on 2024 market rates is as much as $900 a month.
“Base rates alone are insufficient to support the cost of care at the highest levels of quality, and far too low to support a living wage for workers,” the report says.
Last year, the state Legislature set aside money to fund subsidy rates at 2021 levels, but bumping those rates up to the 2024 rate would require more funding, Nicole Rose, assistant secretary of early learning, wrote in a letter.
“DCYF has neither the fiscal authority nor the funding to increase rates according to the 2024 report,” Roe said. In the meantime, the department will continue to reimburse based on the 2021 numbers.
Caring for younger children is more expensive.
Caring for younger children often means higher staff-to-child ratios and more licensing requirements, which can drive up costs. State law requires at least one staff member for every four infants in a licensed child care center. That’s compared to one staffer for every seven toddlers, and one staffer for every 10 preschoolers.
The 85th percentile subsidy rate for an infant in Snohomish, Skagit and Whatcom counties is $1,804. The subsidy rates in the same region are $1,700 for a toddler and $1,540 for a preschooler.
Child care centers aren’t operating at capacity because of staffing shortfalls.
Of those surveyed, about 18% of child care slots in licensed centers are vacant, and about 21% of slots at licensed family homes are vacant.
But that’s not due to a lack of demand for care. It has to do with staffing.
With licensed care centers, about 49% of surveyed providers say they have openings because of staffing shortages.
About 27% of family home providers surveyed said their open slots are also largely due to staffing issues. Many want to hire but can’t afford to, according to the report.
Some providers have openings because they want to keep staff-to-child ratios lower. In other cases, spots are open because kids age out of their programs, or because families can’t afford the cost of care.
Legislative recommendations could be costly.
Child care advocates have been pushing the Legislature to increase subsidy reimbursement rates so that providers who receive them can pay living wages and benefits, including sick and vacation leave, retirement contributions and professional development.
But doing so would be expensive for the state – even more expensive than simply bumping up the subsidies to meet the 2024 rates.
The report’s calculations for the cost of quality care are lower than what the cost of quality care would be if the state followed the model that advocates want.
Although the report does not use advocates’ model to calculate the rates, their recommendations are “a crucial framework for future policy discussions and constitute significant engagement with providers,” according to the report.
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