1. The Massachusetts Child Care Quality Cost Model Anne MitchellAndrew Brodsky Presentation to the Massachusetts Department of Early Education and Care September 28, 2012

2. Project Goals Identify child care cost drivers of levels from licensing through QRIS levels Create interactive model to estimate costs of child care quality in MA Estimate cost implications of changing reimbursement rates Identify current and potential financing strategies for child care quality

3. Cost Methodology Baseline cost estimates based on cost of licensing Cost to achieve given distribution of quality based on analysis of cost- related components of QRIS system If data are available, costs determined separately by region

4. Excel Model Features Allows user to change distribution of quality (beginning at licensing) Allows user to adjust supports for high quality child care (such as grants) and view resulting costs Allows user to adjust reimbursement rate structure

5. Excel Model Output Current and projected enrollment by age and setting Additional costs based on changes to enrollment and quality distribution, by setting Additional costs based on changes to reimbursement rates Cost of quality grants to providers

6. Factors Affecting Quality Higher quality ECE costs more than most families can afford Market-based ECE encourages price competition – low tuition fees – and discourages investments in quality

7. Considerations for Estimating Costs Expense drivers: Ratios Group size Staff compensation (salary and benefits) Revenue drivers: Parent tuition fees/other revenue Revenue collection Enrollment efficiency

8. Provider perspective: Iron Triangle

9. Supporting Financial Stability State can… Set family income eligibility high for entry and higher for exit Use contracts more than vouchers Set rate ceilings as high as feasible Providers can… Fill vacancies immediately to keep enrollment as close to 100% as possible Collect all revenue on time Diversify revenue: Participate in CACFP, PreK & other revenue sources DRAFT - 3-27-12

10. Considerations for Estimating Cost: QRIS Requirements in licensing rules QRIS expectations increase by levels Primarily better qualified staff as quality increases (higher compensation) More staff time for assessment, family activities and conferences, curriculum planning, staff meetings One-time costs for equipment DRAFT - 3-27-12

11. Massachusetts QRIS System Curriculum and Learning Level 1 (from regs)Level 2Level 3level 4 Max group & staff Infants: 7 w/2 staff Toddlers: 9 w/2 staff Preschoolers: 20 w/2 staff School-age: 26 w/2 staff professional development in curriculum, screening tools, and formative assessment professional development in the curriculum; using the MA ELGs; documenting children's progress; and working with children from diverse languages and cultures and second language acquisition. ITERS/ECERS self- assessed score avg 3.0 (no item below 3.0) reliable scores: ITERS/ECERS avg 5.0 (no item below 4.0) CLASS 3+ reliable scores: ITERS/ECERS avg 6.0 (no item below 5.0) CLASS score 6-7 Written child progress report shared with parents: 4 x year for infants/toddlers 2 x preschoolers 1 x school-agers Progress reports with parents 3 x year and 4 x year for 0-3 +/or CWD outside consultants with expertise in children's behavior and mental health to provide support and assistance to staff

12. Massachusetts QRIS System Workforce qualifications and professional development Level 1Level 2Level 3level 4 Director I: lead teacher qualified plus 2 credits in child care admin and 2 credits in ECE/CD Director II: same as I plus 2 credits Administrator has CDA plus training in adult supervision, MA ELGs, Strengthening Families, and MA core competencies Administrator has BA (or progress toward achieving it) with 24 credits ECE and 9 credits admin/mgt Plus 5 years experience Lead teacher: age 21, high school plus 12 credits ECE/CD or high school plus CDA (specific to 0-3 or preschool) Teacher: age 21 or high school diploma/GED plus two-year high school vocational program in early childhood education or CDA Teacher assistant: age16 or high school diploma All staff min high school plus all educators min 3 credits in ECE 50% of classrooms have educator with BA or higher 75% have BA or higher 100% BA or higher and all have 30 credits ECE 20 hrs PD annually (FT staff) All staff have IPDP

13. Example Provider-Level Output (NOT Mass.) Center: 106 children, infants, toddlers and preschoolers

14. Quantify the Gap in $

15. Quantify the Gap as %

16. Massachusetts Cost of Quality Survey (2012) Used in the model Data confirms BLS wages, cost of training and continuing professional development Data informed non-personnel costs Materials and equipment Child screening and assessment