North Carolina’s new budget directed $97 million in federal funds to increase child care subsidy rates and set a minimum rate, or rate floor, for providers. Subsidies help low-income families pay for child care.
Rural providers have long said subsidy payments, which are based on market rate studies, provider quality, and a child’s age, do not cover their costs. Because rural providers typically receive less per child than urban providers, the rate floor is expected to increase payments for many rural centers and home-based operators.
“This is what we have been begging for for years,” said Mandy Mills, executive director of the Southwestern Child Development Commission.
Mills’ commission administers subsidies in 14 western counties and operates a child care resource and referral service in 37 counties. She said centers in western North Carolina had closed classrooms because they could not hire or retain enough staff, and infant care was often cut first because staffing requirements are higher for babies.
Child advocates, businesses, and Gov. Josh Stein’s Task Force on Child Care and Early Education had also backed a rate floor. The NC Chamber Foundation called it a “breakthrough” and “the single most consequential childcare provision in the budget.”
Leanna Martin of NC Child said a five-star center in Randolph County now receives $867 a month for each infant and will see that increase by $500 starting in October. In Alleghany County, reimbursements for five-star home-based care for children ages 3 to 5 will rise from $407 a month to $900.