Minnesota legislature approves raise in child care subsidy rates

The Minnesota Legislature on Saturday approved an increase in payment rates for the state’s child care assistance program for the first time since 2014.

According to the release, the federal law requires that state programs such as Minnesota’s Child Care Assistance Program (CCAP) base payment rates on a market survey conducted every several years. CCAP current rates are based on the survey from 2011, putting the state at risk for millions of dollars in federal penalties.

This legislation bases the rates on the most recent survey from 2018. Federal funds will cover the cost of this change over the next several years.

"Minnesota’s providers of early care and learning were in financial crisis even before the pandemic," said Rep. Dave Pinto (DFL – St. Paul), the author of the bill. "The state is now at risk of losing this vital sector altogether. Raising payment rates will help providers continue caring for children so that parents can work, employers can expand, and children can receive the high-quality early learning that will set them up for success in life."

The legislation has the support of Gov. Tim Walz and Lieutenant Gov. Peggy Flanagan and is expected to be signed into law soon.