Governor Murphy Signs 2022 Fiscal Budget, Here's How it Affects Child Care

Here are the two bills signed into law since the budget break as well as the bill that provides a $100 million appropriation from federal dollars. The first is A4746. The statement is below. This bill deals with the payment of subsidy children. Once this bill is approved tomorrow, it too will go to the Governor’s desk.

The second bill is S3257, which sets up a task force to study the child care industry.

Assembly Bill No. 4746 (1R)

This bill requires that subsidy payments to licensed child care providers be based on enrollment of students who are eligible for child care services, rather than on attendance. Under the bill, “child care services” means those services provided to eligible children, as certified by the Division of Family Development within the Department of Human Services, for which the division receives and administers State and federal funding to provide subsidy payments to licensed child care providers.

Under the bill, in addition to any other criteria set forth by the Division of Family Development in the Department of Human Services to determine a provider’s subsidy payment for child care services, the division is required to determine the subsidy payment for child care services issued to a licensed child care provider based on the number of children enrolled with the provider who are eligible for child care services. As amended, the bill stipulates that at no time is a subsidy payment for child care services issued to a licensed child care provider to be based on attendance of eligible children for child care services. Currently, the division determines subsidy payments to all providers based on the attendance, age, and disability status of eligible children.

The bill additionally stipulates that any licensed child care provider for which subsidy payments are based on enrollment of children who are eligible for child care services are to comply at all times with requirements regarding the ratio of staff to enrolled children, as established by the Office of Licensing in the Department of Children and Families. Such licensed child care providers are specifically prohibited from revising this staff to child ratio in response to fluctuations in attendance by subsidy-eligible students.

The provisions of the bill require that the division, within 24 months following the effective date of the legislation, submit a written report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature comparing the costs of basing provider subsidy payments on the number of children eligible for child care services enrolled with the provider versus basing such subsidy payments on the attendance of children eligible for child care services.

The bill also directs the Commissioner of Human Services to apply for such State plan amendments or waivers as may be necessary to implement the provisions of this section and to continue to secure any available federal financial participation for the applicable child care programs.

 Senate Bill No. 3257

As amended by the committee, this bill establishes a Task Force for the Development of Universal Child Care in the Department of Children and Families. The purpose of the task force is to develop a framework upon which a universal child care system can be established in the State. As used in the bill, “universal child care” means a cohesive system of state-run, licensed child care centers, family day care homes, and approved home providers delivering child care services to children from birth to entry into kindergarten, regardless of family income, for up to six days a week, including summers and holidays.

The task force will consist of 19 members:  

1) the Commissioners of Children and Families, Community Affairs, Education, Health, Human Services, and Labor and Workforce Development, and the Director of the Division on Women in the Department of Children and Families, or their designees, who will serve ex officio;

2) eight public members appointed by the Governor, including: a representative of the Advocates for Children of New Jersey; a representative of the Child Care Advisory Council; a representative of the New Jersey Business and Industry Association; a representative of the New Jersey Association for the Education of Young Children; an individual with experience, training, or other interests in child care issues; an operator of a licensed child care center; a family day care provider, and an approved home provider;

3) two public members appointed by the Senate President, one whom is to be a parent of a child receiving child care services at a licensed child care center, and one whom is to be a director of a licensed child care center; and

4) two public members appointed by the Speaker of the General Assembly, one whom is to be a parent of a child receiving child care services from an in-home provider, and one whom is to be teacher at a licensed child care center.

The task force will be required to:  

1) conduct a comprehensive study identifying policies, procedures, practices, and financial priorities relating to child care services in the State and the gaps therein;

2) study and evaluate aspects of the child care industry that may contribute to the lack of access to, and the high cost of, quality child care services;

3) review existing research, studies, and data concerning universal child care and how the establishment of a universal child care system can increase the accessibility and availability of affordable, high quality child care in the State;

4) evaluate a variety of potential financial incentives to encourage private investment in a Statewide universal child care system;

5) analyze the relationship between the lack of investment in child care infrastructure, including, but not limited to, facility upgrades and the lack of access to affordable, high quality child care; and

6) develop a process to evaluate the services, initiatives, and programs provided through, and funded by, a universal child care system, based on core principles that include: the recruitment, hiring, and training of qualified child care providers who are compensated appropriately; the expansion of supports to help all families access affordable, high-quality child care by making significant public investment to ensure the financial viability of licensed child care centers, family day care homes, and approved home providers; and the remediation of structural inequalities within the State’s child care infrastructure that hinder access to affordable, high quality child care.

The task force is to issue a report to the Governor and to the Legislature, no later than six months after the task force organizes, containing the task force’s findings and recommendations. The task force will expire 30 days after issuing its report.

Fiscal Impact:

The Office of Legislative Services (OLS) concludes that this bill will result in the Division of Family Development (DFD) in the Department of Human Services (DHS) incurring an indeterminate increase in expenses under the Child Care Subsidy Program as a result of switching from a largely attendance-based payment system to an enrollment-based payment system. Costs under this bill will be limited to the two-year period following the federal approval of the State’s waiver or State plan amendment application, or the department’s implementation of the revised child care subsidy rates for qualified providers, whichever occurs first. 

The OLS lacks the data to quantify this increase but notes that the distribution of ages of children served under the Child Care Subsidy Program will be a significant cost-driver in this initiative, as infants generally receive the highest subsidy payment and school-aged children receive the lowest subsidy payment. 

Currently, the DFD is providing a temporary coronavirus child care subsidy enrollment-based payment until December 31, 2021. To the extent that the child care subsidy rates established under this bill overlap with this existing policy, the cost of the bill will be reduced.

Public Law 2021. 21, c.47 & Public Law 2021 c. 21

This bill appropriates $10 million from the General Fund to the New Jersey Economic Development Authority (EDA) to support child care providers impacted by the COVID-19 pandemic.

In April 2021, the State enacted P.L.2021, c.47 to provide $10 million in federal funding to the EDA for disbursement to eligible child care providers impacted by the COVID-19 pandemic. This bill provides $10 million in additional State funding to support this program. As permitted under P.L.2021, c.47, the bill allows the EDA to transfer uncommitted funds to other programs administered by the authority to address the impact of the COVID-19 pandemic. The bill also allows a portion of these funds to be used for administrative expenses.

As a condition of receiving State funds, the bill also requires the EDA to submit a report to the Governor and the Legislature detailing the expenditure of program funds. At a minimum, the report would be required to indicate the number of child care providers that applied for financial assistance; the number of child care providers that received financial assistance; the amount of financial assistance provided to each recipient; and a brief description of each recipient.

Senate Bill No. S3990 

The Senate Budget and Appropriations Committee reports favorably and with committee amendments Senate Bill No. 3990.

As introduced, this bill establishes the Child Care Revitalization Fund, a dedicated, non-lapsing fund to be administered by the Department of Children and Families for the purpose of providing financial support to the State’s licensed child care providers. The bill authorizes the Commissioner of Children and Families, in consultation with the Commissioner of Human Services and the Chief Executive of the Economic Development Authority, to develop processes by which licensed child care providers may submit, through an online portal, applications for assistance through the fund, and by which the allocation of resources from the fund may be prioritized. Authorized allocations from the fund are to be disbursed to licensed child care providers within 21 days of the department’s receipt of a qualifying application, as submitted by a provider through the online portal established pursuant to this act, prior to September 1, 2021.