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Tuesday, April 25, 2017
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For Immediate Release
Contact:  Lana Lee | 973.643.3876 (office) | 609.651.5855 (cell) | llee@acnj.org

NJ’s Child Care Quality Rating System Shortchanges Providers Caring for Low-Income Children

Despite New Jersey’s implementation of a child care rating system that helps working parents find the best care for their young children, a new study by Advocates for Children of New Jersey (ACNJ) shows that many child care centers in low-income communities would face enormous challenges meeting and sustaining these higher state standards that define quality, unless the state is able to provide the necessary resources.

Funded by The Nicholson Foundation, the report Quality Costs How Much? Estimating the Cost of Quality Child Care in New Jersey uses various operational cost scenarios and budget data collected from child care providers throughout the state. The authors determined that under current funding levels, the price tag of implementing Grow NJ Kids (GNJK), the state’s quality rating and improvement system, is far out of reach for centers that heavily rely on child care subsidies.

“Without an increase in the state child care reimbursement rate for the past nine years, many providers are already operating on shoe-string budgets,” said Cecilia Zalkind, ACNJ President and CEO. “For centers that provide subsidized child care, the reimbursements are often too low to meet even their basic expenses – staff, rent and utilities, let alone make the recommended quality initiatives.” The reimbursement is $32.12 per day for an infant and $26.48 for a preschooler.

In 2013, New Jersey was one of six states to receive a $44 million, four-year, Race to the Top federal grant intended to improve child care quality. With these funds, the state expects to enroll nearly a quarter - or 1,800 - of all sites serving infants and young children into GNJK by the end of 2017 when the grant concludes. As of December 2016, 1,111 of the targeted sites were enrolled. By 2022, the state expects all child care programs that receive public funding to be part of Grow NJ Kids.

“However, there is no long-term funding to help enroll more programs, or help existing Grow NJ Kids participants maintain their quality standards after the grant ends,” said Diane Dellanno, policy analyst and principal author of the report.

As providers move up the quality scale, the expenses of operating a high- quality program increase. But as the subsidy rate stays flat, providers must bear the costs – leading to decreased revenues for their businesses. Based on the cost-estimation study, a typical child care center serving a mix of infants, toddlers, and preschoolers, and receiving child care subsidies for a quarter of the children, would lose 8 percent of its revenue if it reached a 3-star rating, 11 percent for a 4-star rating, and 21 percent for a 5-star rating under GNJK.

“This report provides crucial recommendations for changing how New Jersey pays child care providers in order to support high-quality care and education for our youngest children – particularly those from low income families,” said Arturo Brito, Executive Director of The Nicholson Foundation. “This is the time when brain development is most critical.”

Key components of high-quality care include low child/staff ratios, qualified teachers, professional staff development, supplies and equipment, adequate facilities and forging strong family partnerships.

Major Findings from the New Jersey Child Care Cost of Quality Study

  • A typical NJ center providing subsidized child care will not be able to maintain quality without additional financial supports.   
  • Maintaining quality without an increase in the child care subsidy rate is impossible for programs serving large numbers of subsidized children. 
  • Centers serving only infants and toddlers are unable to sustain quality at any level as defined by the state’s child care rating system (GNJK).
  • Current subsidy reimbursement policies regarding attendance and payment practices hinders a center’s ability to maintain quality.  
  • Full enrollment, timely collection of all revenue, and participation in the Child and Adult Care Food Program are critical for financial sustainability.   
  • Salaries for child care professionals must match the increased qualifications required to reach the higher levels of quality.  


For State Agencies: 

  • Increase the child care subsidy reimbursement rate to reflect the true cost of delivering high quality child care and allow low income families equal access to quality.   
  • Adjust the child care subsidy reimbursement rate to align with the increased costs associated with caring for infants (i.e., the difference in staff to child ratio standard)
  • Modify subsidy payment practices to reflect standard policies used when serving non-subsidy families. 
  • Create a multi-tiered reimbursement system that will motivate providers to move up the quality ladder and serve subsidized children. (i.e.,  paying higher rates for reaching higher levels of quality)
  • Encourage providers to serve infants and toddlers by offering incentives that will compensate for the higher costs related to providing high quality care to this population.   
  • Offer scholarships for advanced training and related education expenses to encourage and reward caregivers to continue their education. 

For Legislators and Policymakers:

  • Allocate funding to ensure a meaningful increase to the child care subsidy reimbursement rate and ongoing professional development. 
  • Establish a New Jersey Child Care Tax Credit to assist families in paying for child care.  
  • Create a tax credit to encourage and reward child care professionals that complete advanced education coursework.   
  • Create tax credits to reward centers for maintaining quality.  
  • Improve policies to assist greater numbers of providers to take advantage of the Child and Adult Care Food Program. 

For Child Care Programs:

  • Participate in professional development training on effective management, strong business practices and budgeting.
  • Become involved in shared services efforts to help improve quality, share learning, and reduce operating costs such as the program sponsored by the New Jersey Association for the Education of Young Children.
  • Participate in the Child and Adult Care Food Program.    
  • Ensure full enrollment and timely collection of all revenue.


Advocates for Children of New Jersey is the trusted, independent voice putting children’s needs first for more than 35 years.  Our work results in better laws and policies, more effective funding and stronger services for children and families.  And it means that more children are given the chance to grow up safe, healthy, and educated.  For more information, visit www.acnj.org.  Follow ACNJ on Twitter @acnjforkids and on Facebook at http://www.facebook.com/acnjforkids.

Advocates for Children of New Jersey

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