Updated analysis on growing need for investment in child care assistance

Ben Horowitz
Feb 14, 2017

The latest data on child care show that about 4,000 fewer families will have access to Basic Sliding Fee Child Care Assistance in FY 2017 compared to FY 2003. A big reason why: state funding for Basic Sliding Fee decreased drastically over the same time period. If policymakers don’t act to change this trend, another 1,500 fewer families will have access to Basic Sliding Fee in FY 2021.

The details are laid out in the latest update to our issue brief, Time to Invest in Affordable Child Care through Basic Sliding FeeBasic Sliding Fee provides crucial support for both parents and children. By assisting families with the cost of child care, it makes it easier for parents to succeed at work, secure in the knowledge that their kids are thriving in a safe, nurturing environment. It’s also important to the state’s employers, who in many parts of the state are struggling to attract and maintain the workforce they need.

Graph Minnesota's investment in child care has decreased over time
Source: Minnesota Budget Project analysis of data from the Minnesota Department of Human Services.

But Minnesota’s investment in Basic Sliding Fee has decreased by 25 percent since FY 2003 after adjusting for inflation. Without an increased investment, fewer families will be able to access Basic Sliding Fee each year. Our analysis of the decrease in the number of families served that has already occurred was split fairly evenly between Greater Minnesota and the seven-county metro area.

Stagnant funding has also harmed families’ ability to find child care providers willing to serve children through Basic Sliding Fee and the broader Child Care Assistance Program (CCAP). The reimbursement rates set through CCAP are based on data that are now six years old. The rates only cover less than a third of providers’ prices in the market, limiting parental choice.

Child care is too important for families and for our state to let this deterioration continue. Investing in Basic Sliding Fee supports our current workforce while investing in our future workforce. Policymakers should work to make sure that, when we update our issue brief next year, it shows a sharp reversal of the trend of under-investment.

-Ben Horowitz