NCSL State Legislative Report: September 2004, Vol. 29, No. 3
Incentives for Quality: Tiered Strategies in Child Care
By Beth Clemens, Research Analyst II; Julie Poppe, Policy Specialist; and Steffanie Clothier, Program Manager
INTRODUCTION
During the past decade, policymakers increasingly have focused on assessing child care quality and have considered ways to improve quality. Because work demands require a significant number of children to be cared for by someone other than a parent, changes in federal welfare programs, and the goal of preparing children to succeed in school, lawmakers have found quality child care to be essential. To ensure children’s safety and improve child outcomes, states have passed measures to improve a number of quality standards—such as raising staff qualifications and building components of a professional development system; regulating child/staff ratios and group size based on research findings and national recommendations; targeting health and safety measures; improving the learning environment; considering new curricula; increasing parental involvement; and implementing program evaluation.
The desire to improve child care quality has prompted states to consider the effectiveness of a variety of strategies. Improving the quality of child care has been a challenge in recent years, particularly when states have been unable to make significant investments due to revenue shortfalls and uncertainty about reauthorization of the federal welfare law, which includes the Child Care Development Block Grant. One approach many legislatures have taken is to concentrate efforts on the creation or expansion of tiered strategy systems, which reward programs with higher levels of quality with incentives that influence the competitive child care market. Thirty-five states and the District of Columbia have implemented one or more strategies of a tiered system, and several states—including Illinois and Rhode Island—introduced legislation in 2003 and 2004 that would create a tiered reimbursement system or a rated license for child care.
Tiered strategy systems reflect a systematic approach to improving the quality of child care, which may include child care centers, family child care homes and school-age child care. They also may be used in other settings such as Head Start and state preschool programs. Tiered systems can be developed in multiple ways: tiered reimbursement, a quality rating system, rated licensing or a combination of these strategies. Tiered systems may have a variety of goals, including raising compensation for higher quality providers, providing information to parents so they may better understand and evaluate the quality of programs, and improving the competency level of providers by raising standards.
As lawmakers and other stakeholders strive to improve child care quality, it is useful to weigh the potential benefits and challenges of implementing a tiered strategy system and to understand how tiered systems are structured in specific states. This report discusses the different types of tiered strategy systems and their components, various states’ tiered systems, and research on the effects of tiered systems. The report also addresses design and implementation issues for policymakers who are considering creating or expanding a tiered strategy system.
TABLE OF CONTENTS
How Reimbursement Rates Are Set for Subsidized Child Care
Tiered Reimbursement Rates
Quality Rating Systems
Rated Licensing
Combining Strategies
Outcomes: A Review of Findings
Design and Implementation of a Tiered Strategy System
Conclusion
This report can be accessed by those with passwords at http://www.ncsl.org/legis/cyf/ccslr_sept04.pdf, or can be purchased through the NCSL publications website.
For more information on child care issues, please contact Steffanie Clothier in the Denver office at 303.364.7700 or cyf-info@ncsl.org or either Sheri Steisel or Lee Posey in the D.C. office at 202.624.5400 or fedhumserv-info@ncsl.org.
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