Ohio childcare centers that accept low-income families will see an increase in the state rebate by the end of next year, after the federal government ordered the state to pay providers more money.
Currently, Ohio pays providers at the 25th percentile, according to a national market rate survey of all 50 states. The federal government has ordered Ohio to increase that to the 50th percentile by December 2024, or face penalties.
Robyn Lightcap, Preschool Promise executive director and a member of the Governor’s Early Childhood Advisory Council, said the increase should help childcare providers by increasing the amount of money they receive.
“But the simple version is it should mean an increase in reimbursement rates for providers that have children on publicly funded childcare, which is a good thing because the costs of doing business keeps going up,” Lightcap said. “And the rates need to go up as well.”
It’s not clear how much more additional money the childcare providers would receive. At the beginning of July, the statehouse passed a two-year budget, but that didn’t include this increase, which was brought up last week.
Tami Lunan, cares economy organizing director for the Ohio Organizing Collaborative, which focuses on problems like childcare that impact people of color and younger people, said providers are reimbursed at a rate that puts Ohio in the bottom 10% in the nation for reimbursement rates.
She said the change in rate will not be enough to fix the state of childcare in the state, “but it would be a great step forward.” Lunan argues that the state could be providing more money to pay childcare workers, especially given the recent budget surplus in the state.
“The state of Ohio just recorded a record surplus,” she said. “We have the money to properly fund childcare, we just haven’t valued it since the labor overwhelming tends to be women of color.”
Ohio is at a 22-year low for childcare workers (12,849 across the state), according to 2021 data from the Bureau of Labor Statistics; this is around half the number of workers from the peak year of 2005.
Education professionals say children who don’t have access to quality preschool programming are less prepared for kindergarten and more likely to struggle as they enter school, which in turn demands more time and advocacy from their busy working parents to support their needs.
Lightcap said the schools may be able to use the additional money to pay teachers and add more spots to publicly funded childcare, which is already difficult for people to access.
“If the rates are lower, then some providers might not want to take publicly funded childcare,” Lightcap said. “So we want all children to be able to access great childcare programs and getting the funding right helps parents be able to access that.”
To access publicly funded childcare in Ohio, families need to be making less than 145% of the federal poverty line. For a family of two – a single parent and one kid – that threshold is $28,594 in 2023-2024. For a family of four, that threshold is $43,500.
And the 145% number is an increase for families. Previously, families needed to make less than 143% of the federal poverty line. In this budget, the legislature increased the poverty threshold.
In New Mexico, the state with the highest cutoff for childcare, a family must make more than 400% of the poverty line, which is $120,000 for a family of four, before they no longer qualify for help with childcare under the law.
The Ohio Department of Jobs and Family Resources did not respond to a request for comment.