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Subsidy reimbursement rates in Texas remain far below the true cost of providing child care


Along with conducting a landscape scan of policies and practices across other states, the Prenatal-to-3 Policy Impact Center surveyed more than 800 child care directors and convened a Workgroup of 27 child care experts to create consensus recommendations on how to improve the quality of the Texas child care workforce. The central finding from this research quickly emerged: the child care industry is under-funded and under-resourced, and the key to improving workforce quality begins with providers’ financial stability. Contributing to financial instability, current subsidy reimbursement rates in Texas are too low – sometimes substantially too low – to cover the true cost of providing child care. Further, the method for calculating reimbursement rates may perpetually reimburse providers inadequately for the care provided, contributing to the ongoing instability of the industry, in the absence of corrective policy action. (author abstract)

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