S2465

An Act concerning payment rates for registered family child care providers participating in the Grow NJ Kids program and supplementing P.L.2009, c.299 (C.30:5B-22.1 et seq.)

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. Notwithstanding the provisions of any other law to the contrary, the Commissioner of Human Services shall permit family child care providers, registered pursuant to P.L.1987, c.27 (C.30:5B-16 et seq.), that participate in the State’s subsidized child care assistance program and in the Grow NJ Kids initiative, to receive enhanced reimbursements under the tiered, quality-based reimbursement system for child care providers, as established pursuant to the Grow NJ Kids program.

b. The Commissioner of Human Services shall increase State subsidies paid to family child care providers that participate in the Grow NJ Kids program, based upon the quality rating of the family child care provider, by the same percentage as the subsidy rate increase paid to center-based child care providers with the same Grow NJ Kids quality rating.

c. As used in this section “Grow NJ Kids” means New Jersey’s quality rating and improvement system for child care and early learning programs, which rates the quality of child care services on measurable quality metrics, and provides enhanced reimbursements to participating child care programs that have been rated as providing a higher level of program quality.

d. The commissioner shall apply for such State plan amendments or waivers as may be necessary to implement the reimbursement system established pursuant to this section and to continue to secure federal financial participation for subsidized child care programs for qualified low-to-moderate income households.

2. The Commissioner of Human Services, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) shall adopt such rules and regulations as necessary to implement the provisions of this act.

3. This act shall take effect on the first day of the second month next following the date of enactment, but the Commissioner of Human Services may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.

STATEMENT

This bill permits registered family child care providers that participate in the State’s subsidized child care assistance program and in the Grow NJ Kids program to receive enhanced payments under the tiered, quality-based reimbursement system for child care providers, as established pursuant to the Grow NJ Kids program. The bill additionally requires the Commissioner of Human Services to increase state subsidies paid to family child care providers that participate in the Grow NJ Kids program, based upon the quality rating of the provider, by the same percentage as the subsidy increase paid to center-based child care providers with the same Grow NJ Kids quality rating

It is the sponsor’s belief that family child care is a critical component of New Jersey’s child care infrastructure, as it meets families’ diverse needs including a home-based setting, flexible schedules for families (evenings, weekends, and nontraditional hours), mixed-aged children in a smaller group, and culturally and linguistically supportive settings. Family child care can be a child care option, particularly for infants and toddlers, in which they are not only cared for, but can thrive in high-quality, accessible, and affordable environments.

This specific child care option for families however, is becoming less available. The number of registered family child care homes in New Jersey has decreased significantly, especially in the last decade. In 2017, the Advocates for Children of New Jersey reported that registered family child care homes had declined by 59% over a 15-year timespan, falling from 4,689 providers in 2001 to just 1,907 in 2016. This decline continues and in November 2020, there were only 1,308 registered family child care homes reported statewide, representing an additional 31% decrease. As the number of registered family child care homes decreases, so does the number of available child care slots. Between January 2020 and November 2020, the number of child care slots in registered family child care homes decreased by 890 slots, further reducing options for families.

The bill’s sponsor believes that low subsidy rates and a lack of financial incentives to improve overall quality have added to the continued decrease in family child care homes. While the base subsidy reimbursement rate for family child care must be increased to reflect the true cost of providing high-quality child care, there is nothing in place to reward those family child care providers who accept child care subsidies to improve their program quality. Currently, family child care providers can work towards such quality improvements by participating in New Jersey’s Quality Rating and Improvement System, Grow NJ Kids. However, unlike center-based child care programs, family child care providers receive no subsidy increase, or tiered reimbursement, for providing a higher quality program to the children they care for and educate.

Higher subsidy reimbursement rates for achieving improved quality will not only incentivize family child care providers to join Grow NJ Kids, but will also make becoming a registered family child care provider more attractive.

Grow NJ Kids is the State’s quality rating and improvement initiative for child care and early learning programs, which reimburses child care providers based on objective quality measures. State-licensed child care centers, school- or center-based preschool programs, Head Start programs, and registered family child care providers may request to be evaluated and rated by Grow NJ Kids, based on the quality of child care services provided for infants, toddlers and preschoolers. Based upon the outcome of this quality review, the Grow NJ Kids program may award the provider a three-, four- or five-star rating.

New Jersey’s subsidized child care assistance program currently pays a higher rate to child care centers, Head Start programs, and school- or center-based preschool programs that have a Grow NJ Kids three-, four-, or five star rating. In calendar year 2021, tiered incentive payments under the program range from five percent to twenty percent above the base rate, depending upon the age of the child receiving care and the facility’s star rating. Although family child care providers can request a Grow NJ Kids evaluation, these providers are currently ineligible for the program’s enhanced payments to providers earning a three-, four-, or five-star rating. It is the intent of the bill’s sponsor to ensure that registered family child care providers that offer high-quality care are reimbursed on an equal basis as child care centers under the Grow NJ Kids program.