RECAP of the November EEC Board Meeting: Capital Grants, Subsidy Reimbursement Rate, and FY25 Budget Priorities
At Neighborhood Villages, we prioritize keeping up with the policy landscape in the early education and care field, both across the country and in Massachusetts. That includes tuning-in to the monthly meetings of the Massachusetts Board of Early Education and Care (“EEC Board”), to stay apprised of updates and to identify opportunities for how we can work with government and other stakeholders to improve our early education and care system.
The primary topics of this month’s Department of Early Education and Care (EEC) Board meeting were: (1) a recap and vote on technical changes needed to advance the early education and out of school time (EEOST) capital grants program; (2) an overview of the current landscape of reimbursement rates and preview of proposed reforms to the system; and (3) a review of EEC’s fiscal year 2025 (FY25) budget priorities. Here’s what you need to know…
If You Are a Provider:
Updated child care financial assistance policies and regulations went into effect on October 1st. Trainings are ongoing for providers who participate in the system (also referred to as “subsidy system”). The first round of training focuses on family engagement.
The EEC Board voted to approve EEC’s request for technical changes to the regulations governing the EEOST capital grants program. The revisions will allow EEC to administer both large and small capital grants on a permanent basis and include:
Shortening the length of time of an EEOST grant, for smaller grant awards;
Adjusting grant recapture terms (return of unused funds) to reflect the shortened length of grant period; and
Waiving the requirement for smaller grant awardees to have a recorded Mortgage Lien and Land Use Restriction against property on which capital improvement is being made.
Having received approval from the Board, the proposed changes will be posted for public comment through mid-December, at which point the Board will vote (at its December 13th meeting) to approve and promulgate final regulations.
Funding for capital grants comes from two buckets, each with its own set of rules regarding grant awardees and award use. While the EEOST program is only for non-profit providers serving a high proportion of children with financial assistance, state funding from the Fair Share amendment (the other source included in the state budget) can be used by for-profit providers, so long as they meet the requirement of serving at least 50% children with financial assistance. Family Child Care (FCC) providers are also eligible for smaller capital grants.
In addition to the technical changes to regulations, EEC shared ways in which it is streamlining and modernizing the grant application process that providers use to apply for funding from both the EEOST capital grants program and additional funding provided by the state for capital grants. These updates to the grant application process include:
EEC will accept electronic signature for grant applications
Eligible use has been expanded to include security upgrades
Focus on clean energy and decarbonization
EEC will allow applications from prior awardees for smaller grants
EEC will allow applications for multiple sites from the same organization for smaller grants
Any program serving a high proportion of children with financial assistance (50% or more) may now apply for small grants.
3. EEC plans to use the results of a recent cost study to reform its reimbursement rate structure, while simultaneously pursuing an alternative cost methodology. Last year, EEC used an historic $80 million state investment in the financial assistance system to increase reimbursement rates across the board for all providers serving children with financial assistance. In doing so, they were able to reach a threshold of reimbursing every provider at the 30th percentile of the child care market or higher. (Of note, the federal Office of Child Care [OCC] requires a minimum standard of the 50th percentile, for states using the market rate survey [MRS] to establish their reimbursement rates. Currently, 19 of EEC’s 36 rates [which are based on a combination of program region, type, and age of children] are at or above the 50th percentile.)
With respect to setting reimbursement rates, EEC will continue to look at the market rate, but will also determine how to allocate additional funds in this year’s state budget (for the financial assistance system) with information from the recently conducted comprehensive cost study. Among the study’s findings are:
In most cases, per child daily costs at current compensation exceeded EEC reimbursement rates;
Operating costs for programs varied across regions, but not as widely as reimbursement rates varied; and
The Western, Central, and Southeast regions of the state had very similar costs to each other, and the two Boston-area regions had similar costs to each other.
Informed by these findings, EEC’s strategy for this year’s rate increases includes:
Use a portion of funds for across-the-board increases, given rising operational costs;
Simplify the rate structure by consolidating rates across regions;
Ensure movement toward meeting/exceeding 50th percentile market rate; and
Integrate quality funding into base rates (as opposed to getting paid for quality after the fact).
EEC plans to present a more comprehensive plan at the December Board meeting with specific rate adjustment recommendations. Additionally, EEC has submitted a proposal to OCC for an alternative methodology for calculating reimbursement rates.
If You are a Child Care Advocate:
EEC continues to work with community partners – including Cradles to Crayons, Horizons, and Neighborhood VIllages – to support young children and their families in the state’s emergency shelter system.
As part of its changes to and expansion of capital grants, EEC announced that it will soon be posting a Request for Information (RFI) to solicit feedback from organizations with the goal of identifying a partner to administer the Fair Share capital funding program – organizations should have experience supporting FCCs or with small business loans.
EEC’s FY25 Budget Priorities were approved by the Board. The priorities reflect a continued focus on:
Family Access – EEC will continue to advance its Child Care Financial Assistance reform effort; support expanded access to preschool in Gateway Cities through the Commonwealth Preschool Partnership Initiative (CPPI); and strengthen the shelter system.
Program Quality – EEC will focus on early literacy to address emerging needs, including by continued partnership with K-12 schools, and provide program-wide supports for mental health.
Program Stability – EEC will continue to support and refine C3 grants with the goal of returning to the Board within the next year to transition from the COVID-era program to a long-term state program; it will also continue work on financial reimbursement rate structure reform.
Workforce Supports – EEC will build upon the success of the educator financial assistance pilot by continuing to offer child care assistance to eligible early child educators; it will also focus on the recruitment of educators into the field.
Agency Infrastructure – EEC will continue to build its infrastructure and capacity to support new programs and, specifically, changes that result from regulatory reform that may have resource implications.
