OSSE’s Revised Payment Guidance Threatens District’s Child Care Sector

Child care provider reading a book with toddler

On Tuesday, the Office of the State Superintendent (OSSE) announced that, beginning November 1, the agency will change the way it pays child care providers that participate in the District’s child care subsidy program. This change would revert from COVID-19 payments to the pre-pandemic payment model, one not designed to account for the unique costs and obstacles the pandemic presents. 

The impact of this change, without more time for providers to prepare for it, and without adjustments to support early care and education during a pandemic, will likely be catastrophic for the District’s child care sector. The possible impact includes huge reductions to many providers’ revenue, forced reopenings of temporarily closed facilities despite concerns about safety and financial viability, and a potential triggering of permanent closures that would be a blow to an already struggling child care sector. 

In a recent town hall about the changes to the payment guidelines that DC Action co-hosted with six child care associations,* providers’ fear and anger in response to the new guidance was palpable. One provider shared “I am feeling scared and confused as to how they would want babies to go back to school and allow high schools and charter schools to stay closed. I am afraid and sad because I need my job to survive but can not afford to get sick with corona.”

OSSE’s COVID-19 payments, which began in April of this year and are now set to conclude in November, have played an important part in keeping the sector afloat. During this time, OSSE wisely compensated all child care providers participating in the child care subsidy program based on their pre-pandemic average daily attendance rates between October 2019 and January 2020. These predictable payments, while imperfect, were meant to mirror the usual payments providers structure their budgets around. COVID-19 subsidy payments have been a lifeline for subsidy providers, who exclusively serve children in families with low incomes using these funds. 

Detached from attendance levels, COVID-19 payments have enabled many to continue meeting their financial obligations and to remain in business. By continuing to compensate providers whether they’ve been able to reopen yet or not, OSSE has also allowed providers who are older, have health concerns, or do not believe they can safely serve infants and toddlers during a pandemic, to remain afloat until operations are safe to resume. While opportunities abound to improve child care subsidy payment guidance to be more responsive to the needs of families and providers, these changes must be developed with providers at the table. Their perspectives are indispensable to a well-designed approach. 

Since the onset of the public health emergency, child care providers have faced uncertainty about their ability to stay in business. Now, child care programs currently serving families (about half of all licensed providers) are six months into implementing important but stringent health and safety guidelines mandated by the CDC and DC Health. Adhering to these regulations is costing providers at least twice as much per child as they were spending before COVID-19.

See a letter from child care associations to the Mayor about this payment guidance here.

The return to a payment structure not designed with COVID costs and challenges in mind is stoking anxiety amongst child care business owners and early educators. Even at pre-COVID attendance rates, attendance-based payments would be significantly lower than the cost of additional staffing, cleaning, and supplies needed to comply with COVID-19 health and safety guidelines. Because health and safety guidelines have required most providers to cut back on the number of children they can care for, while costs are rising, income will shrink. 

During Tuesday’s town hall, one early educator highlighted the situation child care businesses are facing: “With all of the changes that are needed for centers [to comply with health and safety guidelines] money will be poured out [by child care businesses] and then there will not be enough children in care to pay teachers, bills, etc. We have parents that do not wish to return and they are satisfied with virtual learning for the safety or staff and children. This is not a clear decision and it affects child care facilities across the board. What and who is this plan benefiting? Because it is not benefiting the childcare community at all.”

Child care is essential to a thriving economy, but OSSE’s return to attendance-based payments threatens its existence. For the sake of this important sector, and the families and children it serves, OSSE must extend COVID-19 payments through December 31 and work closely with the provider community to develop a measured, nuanced approach to payments beginning in January 2021. 

*DC Association for the Education of the Young Child, DC Early Learning Collaborative, DC Family Child Care Association, DC Head Start Association, Director’s Exchange, and Washington Association of Child Care Centers. Assistant Superintendent for Early Learning