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New Minnesota budget expands low-cost child care

(The Center Square) – Starting this week, a $160 million investment in the bipartisan Child Care Assistance Program will provide lower costs and more accessible child care statewide.

Minnesota’s Child Care Assistance Program helps families pay for child care so parents can work or pursue employment or education.

The $160 million will subsidize those maximum rates to expand access to affordable, quality child care, support providers and reduce out-of-pocket costs for families.

The Minnesota Department of Human Services (DHS) sets the maximum reimbursement rates paid to child care providers that serve income-qualifying families in the Child Care Assistance Program.

“I am proud that our bipartisan budget includes historic investments to support our essential workers and working families,” Gov. Tim Walz said in a statement. “As we continue to take bold action to expand Minnesota’s economy, today’s increase to the Child Care Assistance Program helps ensure that our hardworking families have the resources they need, our small businesses are supported, and our youngest Minnesotans receive the care and love they deserve.”

Based on a market rate survey conducted earlier this year, weekly maximum rates will go up an average of 16% for centers and 12% for licensed family child care. While rates for care for all ages will increase, an extra boost to the infant and toddler rates aims to help families return to work or school.

“This investment supports Minnesota’s economy in critical ways,” Human Services Commissioner Jodi Harpstead said in a statement. “Child care providers will see more of their real costs covered, while parents will have an easier time accessing reliable child care so they can work or go to school.”

The Child Care Assistance Program serves more than 30,000 children each month, paying about 3,200 child care providers providing child care for roughly 15,000 low-income families. Before a modest increase last year, the program’s reimbursement rates hadn’t changed since 2014. The current increase, funded by the federal Child Care Development Block Grant, will bring Minnesota into federal compliance w requiring maximum rates to reflect the most recent market rate survey.

Rates for child care vary, depending on the child’s age, the provider type and location, credentials, and rating. In most cases, DHS pays the child care provider on behalf of the family. Not all families in the Child Care Assistance Program must pay the difference between the provider’s price and the state reimbursement rate.

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