State Increases to Child Care Providers Will Encourage Greater Availability for Families

July 25, 2017

LANSING – The recently-adopted state budget includes changes to help provide greater availability of quality child care providers for Michigan families, the Michigan Department of Education said today.

Increases in reimbursement rates and the family eligibility threshold; funding to offset safety-related costs for providers; and funding to help providers improve their quality will help encourage greater availability for families, said State Superintendent Brian Whiston.

“Getting more quality child care providers for families is essential to helping Michigan’s children learn and grow and be ready to start school prepared for success,” Whiston said. “Improving the reimbursement rate and encouraging higher quality is a great start. I thank the legislature and Governor Snyder for their support in these efforts.

“High-quality care, where all children are learning from the earliest ages, is the foundation of building Michigan into a Top 10 education state within 10 years,” he said.

Whiston hopes that the improvements will reverse a steady decrease in the number of child care providers available for Michigan families over the past five years. The number of child care centers, family child care homes, and group child care homes dropped from 11,179 in 2012 to 9,560 in 2016.

Over $24 million has been appropriated to increase the reimbursement rates for child care providers in Michigan – the first bump since 2011 for some of the providers. The new rates range from $1.60 per child/per hour to $5.50 per child/per hour, depending on the age of the child; the type of child care setting; and the current quality of the provider, based on the state’s Great Start to Quality star rating system.

The new reimbursement rates are the result of a 2015 Market Rate Survey of child care providers across Michigan. The new rates, which take effect this week, will help move Michigan closer to the 75th percentile rate found of that survey.

The need to improve the reimbursement rates was made evident in the Building a Better Child Care System Report(September 2016) that outlined the issues and barriers created by the reimbursement rates then, and how Michigan compared to other states.

As well, more Michigan families will become eligible for a child care subsidy as a result of the legislature raising the family eligibility entrance threshold from 125 percent of the federal poverty level to 130 percent. This is estimated to provide child care assistance to nearly 1,300 more Michigan children, beginning in October. According to the 2017 Michigan Federal Poverty Level Table, 130 percent of the federal poverty level for a family of three is $2,213 per month ($26,551 per year), and for a family of four, it is $2,665 per month ($31,980 per year).

The TEACH scholarship program also was increased by $1 million for child care providers that are seeking to increase their Great Start to Quality star rating, or are in the process to receiving a star rating. This federal funding will expand the impact of TEACH and help more individuals in obtaining a credential or degree necessary to improve their star quality rating.

The state budget also included a $5.5 million appropriation to offset the cost of doing comprehensive fingerprinting for all child care providers; staff; and individuals with unsupervised access to children. That fingerprinting is a federal requirement under the Child Care Development Block Grant. It is estimated that this appropriation will cover the background checks for approximately 86,000 individuals.

That comprehensive fingerprinting requirement is part of a bipartisan Congressional overhaul of the federal Child Care Development Fund regulations that had not been updated since 1998. The law made many important statutory changes focused on strengthening child care to better support the success of both parents and children, while also providing a new emphasis on the importance of providing high-quality early education and care for this nation’s youngest learners.

The changes to the federal law and regulations will better protect the health and safety of children in child care; help parents make informed consumer choices and access information to support child development; support equal access to stable, high-quality child care for low-income children; and

enhance the quality of child care and better support the workforce.

“We want to expand access to quality programs for more families,” said Susan Broman, Deputy State Superintendent for Michigan’s P-20 System and Student Transitions. “We’re improving the standards and helping more child care providers get there.” 

Here are the new child care reimbursement rates:

 

Provider Type

Star Rating

Birth to Age 2 1/2

 

Over Age 2 1/2

 

Child Care Center

Base Rate

(Blank Star)

$4.00

$2.75

1 Star

$4.00

$2.75

2 Star

$4.25

$3.00

3 Star

$4.75

$3.50

4 Star

$5.00

$3.75

5 Star

$5.50

$4.25

Group and Family Home

Base Rate

(Blank Star)

$3.15

$2.65

1 Star

$3.15

$2.65

2 Star

$3.40

$2.90

3 Star

$3.90

$3.40

4 Star

$4.15

$3.65

5 Star

$4.65

$4.15

Unlicensed

Base Rate

(Level 1)

$1.60

$1.60

Level 2

$2.95

$2.60