Federal regulations require states to conduct a child care market rate survey every three years as a condition of receiving federal dollars from the Child Care and Development Fund to establish child care subsidy rates that are high enough to allow low-income working families to enter the child care market and afford equal access to a range of care.
Brodsky Research conducted a study to inform the state-established licensed child care reimbursement rates for child care provided through the Colorado Child Care Assistance Program (CCCAP) and to provide a benchmark for setting current subsidy rates in order to meet the federal definition of equal access. Second, the study provided vital information on the affordability of child care as well as an indication of how well the markets for that care are functioning.
Study findings indicated that the cost of child care has increased overall. Child care costs in 2022 exceeded 2021 state-set rates for most rate categories, including children in centers under 6 years, and all children in family child care homes. Rates increased more for preschool-aged children than for younger children. Acoss Colorado, child care market rates have increased faster than the rate of inflation. In all but one combination of provider type and age group, increased costs of child care have exceeded the average statewide cost of living.
Study results also indicated that in general, CCCAP rates were similar to market rates. The most common barriers to early childhood education programs’ CCCAP participation were low payment reimbursement rates and CCCAP policies and administration procedures.