Ohio’s childcare crisis: The State and families are both paying the costs

When Community Solutions set out to release updated Status of Women fact sheets, the seven women sitting around the table were unanimous in wanting to see the issue of childcare represented. We knew that childcare continues to be a barrier to participation in the workforce and a stress point for families with children – including factoring into families’ decisions about the size of their family. We are not the only ones to recognize this: The Atlantic, Newsweek, The New York Times, The Washington Post, Forbes, CNN, and more have all had articles about the childcare crisis in the last two months. The data available for childcare costs in Ohio was too complicated to include succinctly on a fact sheet, but we are walking through what is available, what it can tell us, and its implications.

Ohio reimburses providers at unacceptably low rates

Until this year, Ohio set the reimbursement rates for publicly funded childcare at the 25^th percentile of market costs. This means that a family receiving a full reimbursement for childcare would only be able to completely cover the costs for the least expensive quarter of childcare facilities in their area. Ohio’s reimbursement rates are so low – the lowest in fact of any state – that the federal government has mandated they be raised to the 50^th percentile by the end of 2024. The most current rates reflect costs at 35^th percentile, en route to meeting the 50^th percentile mandate by the end of the year. Reimbursing at the 75^th percentile is the federal benchmark for equal access.

Ohio’s reimbursement rates are so low – the lowest in fact of any state – that the federal government has mandated they be raised to the 50^th percentile by the end of 2024.

Any measure of affordability using these rates is vastly underrepresenting the burden of childcare costs most families in Ohio are experiencing. The U.S. Department of Health and Human Services considers 7% of family income to be affordable for childcare.The Market Rate Survey is used to develop Ohio’s reimbursement ratesOhio publishes its reimbursement rates for publicly funded childcare. These rates are based on a biannual Market Rate Survey. The goal of the Market Rate Survey is to characterize the unsubsidized (private pay) market rates for childcare throughout the state. The most recent Market Rate Survey was completed in 2022.

The Ohio Department of Job and Family Services uses the Market Rate Survey to publish 12 separate rate tables with 180 different rates across the tables. Providers receive more reimbursement for each added star rating they have in the Step Up to Quality program. There is more nuance around issues such as administrative fees, professional development days, absences, and remote schooling. The variety of reimbursement rates is one more factor making it challenging to accurately represent the costs of childcare at a high level. The map below shows the average full-time costs of childcare for a toddler as a percentage of median income for a family with children under 18 in each county. It uses the 50^th percentile costs for full-time childcare at a Center from the Market Rate Survey. The average family in most counties is paying more than 11% of their income to childcare, with average costs rising to over a fifth of median family income in several counties. And this is before considering scenarios with more than one child.

Families making 145% of federal poverty level qualify for assistance

Parents or guardians qualify for childcare assistance in Ohio if their income is at or below 145% of the federal poverty level or the family needs care for a child with a county-agency-verified special need, and their income is at or below 150% of the federal poverty level, and they meet one of the following criteria:

• Employed
• In school
• In job training
• Receiving Ohio Works First Cash Assistance
• Homeless
• Required by a children’s services case plan to have protective childcare for children living in the home

Once a family is receiving publicly funded childcare assistance, there has been a sliding scale of up to 300% federal poverty level, with co-payments going up as income does. This arrangement in Ohio will be impacted by the Executive Order on Care just finalized on February 29, 2024. One component of the Executive Order on Care caps childcare co-payments from families who are taking part in the Child Care  & Development Block Grant (CCDBG) program to no more than 7% of income. The CCDBG program is the largest source of funding for Ohio’s publicly funded childcare.

The National Database of Childcare Prices needs updating

The most comprehensive federal resource of childcare prices at the county level is the National Database of Childcare Prices. The National Database of Childcare Prices was first made available to the public in 2022 and provides data for the years 2008-2018. Efforts are underway to solicit data from 2019-2021 from states, but even this data will be outdated by the time it is published. Updated childcare data put forth by the Women’s Bureau in 2023 used the 2018 data and updated it for inflation.

Raising children and providing quality childcare is an invaluable service, yet we need to consider and understand its costs to chart the best future for Ohio’s families.

The bottom line

Data on childcare costs in Ohio is available but challenging to summarize. However, any way you look at the data, childcare costs account for large percentages of families’ incomes. Recent action at the federal level will result in relief for Ohio’s families with children receiving publicly funded childcare but will not assist all families. Raising children and providing quality childcare is an invaluable service, yet we need to consider and understand its costs to chart the best future for Ohio’s families.