Our commonwealth needs to make further investments and improve policies for the children and families served in the early care and education system. Read below for updates and information about Pennsylvania-focused policy and advocacy.

Governor Shapiro's Proposed Budget for Fiscal Year 2024-25

Child Care
Gov. Shapiro's proposal includes $31.709 million in state investments for child care, including an initiative to increase the subsidy rate. The budget includes a state funding increase which would enable Pennsylvania to draw down additional federal dollars to move the child care subsidy reimbursement rate to the 75th percentile of the current price that families pay for child care services. We welcome this proposal, which will help providers participating in Child Care Works with increasing facility, food, utility and supply costs. However, funding is needed to specifically address the staffing shortage, which is impacting working families’ access to child care. Other states have recognized that increasing rates alone does not come near to adequately solving the staffing problem. Pennsylvania needs to establish a program to help providers better recruit and retain their staff. As the workforce behind the workforce, Pennsylvania’s economy depends on working families and working families depend on child care.
Pre-K
Gov. Shapiro’s proposal includes $32.478 million in additional funding for Pre-K Counts and $2.7 million for Head Start Supplemental Assistance Program, the majority of which will increase rates. This rate increase will provide much-needed aid to high-quality pre-kindergarten providers to combat inflationary pressures and unrelenting staffing shortages. We applaud the Governor in proposing an increase that will offer progress for a system struggling with historic teacher staffing shortages exacerbated by wage growth in other sectors. We know that many programs have waiting lists and that inadequate wages across the early care and education sector are the cause of pre-k classroom closures. This investment is a critical first step in closing this gap to ensure adequate staffing levels to operate state funded pre-k programs at current-funded capacity.
Early Intervention
Gov. Shapiro’s proposal includes a $16.7 million increase for Early Intervention Part C (infants and toddlers) and $17 million increase for Early Intervention Part B (age three to five). These services seek to ensure all children birth through age five with developmental delays, regardless of family income level, are identified, referred to and are provided the services they need to reach their fullest potential. We urge policymakers to build on this proposal and ensure an investment would provide for a long-needed rate adjustment for Early Intervention providers and serve additional children.

Read the Early Learning PA Coalition press release here.

 

State Budget for Fiscal Year 2023-24

The 2023-24 state budget legislation, House Bill 611, was signed by Gov. Shapiro on August 3, 2023 and provides the following for early childhood care and education.

Pre-K

House Bill 611 level-funds PA Pre-K Counts and the Head Start Supplemental Assistance Program. Flat funding means no expansion of access and that the inadequate reimbursement rates for these programs will not increase, prohibiting programs from addressing the recruitment and retention challenges they face. In addition, this is occurring as the entire Pre-K Counts program is being rebid. Please know that we have advocated to maintain -- to the greatest degree possible -- the current county slot allocations to ensure stability in access for children as all counties continue to have unmet needs.

Child Care

The 2023-24 state enacted budget provides an increase of $90,377,000 in the Child Care Services line and $13,370,000 in the Child Care Assistance line, both under the Department of Human Services (DHS). This slightly more than $100 million will maintain the status quo in the sector in terms of child care subsidy utilization and subsidy rates increased through one-time federal stimulus funding. While certainly needed, this funding does not stabilize the child care workforce and funds specifically to increase wages are needed to recruit and retain child care teachers and staff.

Early Intervention

Infant/Toddler Early Intervention (Part C) received an increase of $15.4 million under DHS to serve more children and sustain a rate increase that was achieved through one-time federal stimulus funding. This is less than Gov. Shapiro’s original budget proposal and we are disappointed more was not done to support the program more holistically, including solutions to address workforce shortages. Early Intervention (Part B) under the Department of Education for 3-5-year-olds received an increase of $10.4 million to serve more children.

Evidenced-Based Home Visiting

The Community-Based Family Centers line item was level funded. The Nurse Family Partnership received a $25,000 increase, which is a technical adjustment from previously enhanced federal matching funds.

Read the Early Learning PA Coalition press release here

State Budget for Fiscal Year 2023-24 Finalized

The final pieces of the 2023-24 state budget were finalized in December with the passage of Public School Code bills and the Fiscal Code. SB 843 was signed by the Governor and it includes additional language in the Public School Code related to Pre-K Counts, which accomplishes the following related to reporting:

  • Requires the Department of Education (PDE), to amend their systems no later than March 31, 2024 to collect the required data.
  • Beginning April 1, 2024, approved providers must submit to PDE information on an eligible student enrolled in a Pre-K Counts slot within 15 days of enrollment and removal of enrollment.
  • Beginning in January 2024 and each quarter thereafter, the Secretary of PDE and the Deputy Secretary for OCDEL must report, in person, to the chairs of the Appropriations Committee on enrollment and any information related to Pre-K Counts.
  • Beginning July 31, 2024 and each quarter thereafter, PDE shall report to the chairs of the Appropriation Committees:
    • The total number of eligible students enrolled in a Pre-K Counts slot for each approved provider organized by month in the previous quarter.
    • The number of eligible students newly enrolled in a Pre-K Counts slot for each approved provider organized by month in the previous quarter.
    • The number of eligible students removed from enrollment in a Pre-K Counts slot for each approved provider organized by month in the previous quarter.
    • The number of eligible students enrolled for 90% of the month in a Pre-K Counts slot for each approved provider organized by month in the previous quarter.
    • The number of total funded slots for each approved provider by each month in the previous quarter.
    • A listing by county of the total number of requested Pre-K Counts slots for students from eligible providers in the county and the total number of slots approved for all approved providers in the county for the current fiscal year.

The Fiscal Code (HB 1300) was signed by the Governor and includes:

  • $25 million to maintain the child care subsidy exit income increase to 300% of the Federal Poverty Income Guidelines or 85% of the State Median Income; and
  • Expansion of the PA Child and Dependent Care Enhancement Tax Credit Program. In tax year 2022 the credit is equal to 30% of eligible expenses up to a maximum of $3,000 for an individual and $6,000 for two or more qualifying individuals. For tax year 2023 it increases the credit equal to 100% of eligible expenses up to a maximum of $3,000 for an individual and $6,000 for two or more qualifying individuals. The Department of Revenue must report annually to the General Assembly on the number of tax credits approved and the amount of tax credits approved, claimed and refunded through the program.
Pennsylvania Child and Dependent Care Enhancement Tax Credit Program Expanded
Governor Shapiro also signed legislation that included major expansion to the Pennsylvania Child and Dependent Care Enhancement Tax Credit, helping to ease child and dependent care costs for working Pennsylvania families. Start Strong PA partners congratulate the Shapiro Administration and General Assembly for making child care more affordable for families through the enhanced Pennsylvania Child and Dependent Care Enhancement Tax Credit Program; however, this solution only helps families better afford child care. If child care programs continue to close classrooms, families will continue to struggle to find the child care they need. Start Strong PA is urging Governor Shapiro to prioritize funding to specifically address the child care staffing crisis through recruitment and retention incentives in his 2024-2025 budget proposal in February so that Pennsylvania’s child care supply can meet the overwhelming demand.

 

Building a Financially-Stable, High-Quality Child Care System for Pennsylvania’s Children and Families: Improving Subsidized Child Care Rate Setting

PennAEYC, in collaboration with Start Strong PA, released a policy brief that recommends that Pennsylvania conduct cost modeling to determine the true cost of child care and adopt an alternative payment methodology for child care subsidy. The price of child care is high and a burden for most families, while child care programs operate on razor-thin margins and child care teachers and staff are paid poverty level wages. The current system fails our families, the teachers and staff and program owners and directors. Parents can’t afford to pay more, providers can’t afford to be paid less and teachers can't afford to stick around. Determining the true cost of care is critical to addressing the underfunding in the child care system. Creating a cost estimation model will outline revenue and expenses to identify what it actually costs to meet certification standards, accounting for program variations, and additional costs related to high-quality child care and appropriate compensation for the workforce.

Read the full report here Improving Subsidized Child Care Rate Setting - 2-2023 Web

Improving Subsidized Child Care Rate Setting Presentation February 2023

Presentation Recording; Passcode: Z%ngF2T?

Cost Gap Charts ELRC Regions 1-5 May 2024

Cost Gap Charts ELRC Regions 6-13 May 2024

Cost Gap Charts ELRC Regions 14-19 May 2024

 

Cost Estimation Modeling Guide

PennAEYC, in collaboration with Start Strong PA, released a cost estimation modeling guide to provide the steps that must be taken to conduct cost estimation modeling and develop an alternative payment methodology to implement a cost based approach to rate setting in a manner which can be approved by the federal government. The Administration must opt to set provider payment rates based on an alternative methodology using a cost estimation model. There are two primary inputs to developing a cost estimation model, expense and revenue data from child care providers and quality cost drivers. The cost estimation model process will result in a tool that Pennsylvania can use to understand the impact of child care program characteristics and policies on the cost of care. When a state knows the true cost of care, these data can be used both to reimburse programs for the cost of operations as well as to gain understanding of what level of additional funding might be necessary to adequately incentivize care for underserved populations. Upon completion of the cost estimation model, Pennsylvania would develop a new payment methodology based on the information collected, along with a plan to fund the gap between current subsidy rates and the cost of providing high-quality child care.

Read the full guide here Cost Estimation Modeling Guide

 

Recommendations for Infant and Toddler Contracts in Pennsylvania: A Model to Strengthen and Stabilize the Child Care System

PennAEYC, Children First, Trying Together and Pennsylvania Partnerships for Children released recommendations for Pennsylvania related to infant and toddler contracted slots to expand and improve the program. Pennsylvania is well poised to expand contracts for infants and toddlers based on the Infant and Contracted Slots Pilot and can serve as a model for strengthening and stabilizing the child care system. These recommendations highlight the policy goals for the expansion of contract-based slots for infants and toddlers and offers well-researched financing and monitoring recommendations to ensure accountability for the system and use of public dollars. Lastly, the recommendations include ways to strengthen equity in a contracts-based model to ensure funding reaches all Early Learning Resource Center regions.

Read the full report here Recommendations for Infant and Toddler Contracts in Pennsylvania: A Model to Strengthen and Stabilize the Child Care System

 

Statewide Advocacy Agenda to Improve Part C Early Intervention Services for Pennsylvania

PennAEYC and Pennsylvania Partnerships for Children released a comprehensive report, Statewide Advocacy Agenda to Improve Part C Early Intervention Services for Pennsylvania, which reviewed the data and current practices in Pennsylvania’s system. There are five core recommendations:

  • Serving all children who can benefit from Part C EI through outreach, referral, enrollment
  • Ensuring Part C EI services offer the quality needed to make a difference
  • Achieving equitable access in Part C EI
  • Addressing mental health needs of infants and toddlers in Part C EI
  • Partnering with Medicaid to improve Part C EI

Read the full report here Statewide Advocacy Agenda to Improve Part C Early Intervention Services for Pennsylvania - JUNE 2022 FINAL ONLINE