• Delaware is debating a $25.3 million investment into its state-subsidized child care program, known as Purchase of Care.
• A potential federal rule change could require the state to pay providers based on enrollment rather than attendance, costing an estimated $25 million.
• If the federal rule is dropped, officials propose using the funds to expand child care eligibility to more lower-income families.

Delaware child care has been a fixture of this budget season.

Gov. Matt Meyer pitched some $50 million toward early education in his proposed budget for next fiscal year. It included an $11.3 million federal grant to bolster systems, $8 million to pilot statewide hubs – and the largest piece in $25.3 million to boost Purchase of Care, or state-subsidized child care.

That line item proved a major talking point during a public health budget hearing in Legislative Hall on Monday, March 2, while connecting to broader visions for early childhood reform.

As it turns out, Delaware’s subsidized child care program in particular was already due to shoulder federal requirement changes dating back to the Biden administration. And those changes, effective April 1, could cost the state about $25 million to keep up.

That morning, lawmakers were briefed by the Delaware Department of Health and Social Services for more than three hours, before well over 50 public comments stretched late into the afternoon. Topics ranged from at-home care and centers supporting Delawareans with disabilities, to the ongoing strain of child care.

New Health Secretary Christen Linke Young said the Trump administration might drop these coming changes to pay providers based on child enrollment, before they’re effective.

And for Delaware, she would agree with that call.

Look back: Gov. Meyer pitches Delaware’s next budget. What’s in it for education?

Boosting Delaware child care, one way or the other

Purchase of Care is one program helping lower-income Delaware families – or those making below 200% of the federal poverty level, as of yet – afford care at various child care outfits across the state. Delaware pays those providers directly, around the end of the month, based on how many days these children attended.

Federal requirements could force states to change that.

Delaware would have to pay providers at the top of the month, based on their overall student enrollment, regardless of attendance. Young told lawmakers that would cost around $25 million each year, if requirements are not rescinded by the Trump administration.

It would mean more money for providers, she said, though also harsher policy needed around attendance expectations.

“If the federal government does change the rules, we need that full amount to shift to enrollment,” she said, addressing the Joint Finance Committee dais. “If not, our intention is to use it for increased eligibility.”

In other words, the administration hopes to invest about $25 million into this bucket either way. However, the health secretary said paying based on enrollment isn’t her recommendation.

Young told lawmakers the administration would rather see that amount infused into the program to expand eligibility to 250% of the federal poverty level. So, picture a family of three making roughly $80,000 would make the cut. No changes were proposed to co-payments or special education tiers.

This was met with mixed reviews.

“I’m sure some folks are going to have something to say about that,” cautioned Sen. Trey Paradee, committee chair.

For her part, Jamie Schneider was already editing her remarks in real time.

“Comments today suggested providers want to keep attendance-based payments instead of moving to enrollment-based payments,” said the interim executive director for Delaware Association for the Education of Young Children, representing some 900 early care providers. “That is inaccurate and I hope it’s a misunderstanding.”

Schneider welcomed the enrollment model, with “clear rules” to hold both providers and parents responsible. She and a handful of other speakers still also reinforced the necessity in bolstering the Purchase of Care program, from accessibility to reimbursement rates.

Some lawmakers hesitated on shifting away from enrollment boon for providers, while others pushed for attention on the benefits cliff. Meanwhile, child care became an economic discussion.

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Some lawmakers did not care for this price tag, either way.

“So, there’s $25 million that will be saved because of this non-change, and you’re going to expand the program?” Sen. Dave Lawson posed to Young, while expressing concern for taxpayer dollars.