[1] NOTE:  As provided in LFC policy, this report is intended for use by the stand­ing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibili­ty for the accuracy of the information in this report when used in any other situation.

 

Only the most recent FIR version, excluding attachments, is available on the Intranet.  Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

 

 

F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Stewart

 

DATE TYPED:

01/22/02

 

HB

HJM 14

 

SHORT TITLE:

State-Subsidized Child Care Facilities

 

SB

 

 

 

ANALYST:

Dunbar

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY02

FY03

FY02

FY03

 

 

 

 

See Narrative

Non-Recurring

General Fund

 

 

SOURCES OF INFORMATION

 

Children Youth and Families Department (CYFD)

 

SUMMARY

 

     Synopsis of Bill

 

House Joint Memorial 14 requests that CYFD create a task force to study the licensing of all childcare facilities that receive childcare subsidy payments.  The memorial notes that at least 60% of state-subsidized childcare is provided through unlicensed childcare facilities. The memorial further notes that because these facilities are not licensed, the state of New Mexico is paying for care that may be substandard, and that reimbursement rates currently paid for childcare by the state are below market value.  The memorial requests the task force to develop a plan to license all providers that receive or are eligible to receive state reimbursement for childcare services.

 

     Significant Issues

 

CYFD reports that the issues outlined in the bill have been studied.  CYFD indicates that in the1999 Legislative Session, SM 12, identified all the facilities statewide that were unlicensed. The majority of these unlicensed facilities in the state were identified as faith-based facilities operated by churches and summer recreation programs operated by municipalities and care for children over the age of 12.  These factors make these facilities ineligible for CYFD childcare payments.

 

  

CYFD specifies that the memorial is inaccurate in stating that unlicensed care is substandard and that the state is paying for substandard care.  All children that receive state funded childcare assistance must be in either licensed or registered facilities.  Registered facilities operate under the rules and regulations of the Family Nutrition Bureau and have the same standards for health and safety as

 

licensed facilities. These facilities are inspected once per year, with registered homes reviewed at least four times per year.

 

The latest market rate survey for CYFD was conducted in April 2001.  As a result, childcare reimbursement rates were increased to an average of 97% of the 75th percentile for rural providers and an average of 83% of the 75th percentile for metro providers.  The cost to bring all facilities up to the 75th percentile would be $8,600.0 based on the most current market rate study. See below for further clarification of 75’ percentile.

 

Currently, 51% of childcare subsidies are paid to registered homes and 49% to licensed facilities.  CYFD currently has 964 licensed childcare facilities and 9,430 registered homes.

 

FISCAL IMPLICATIONS

 

CYFD notes that the cost to complete the study requested in SM 12 noted above was approximately $50.0.

 

ADMINISTRATIVE IMPLICATIONS

 

CYFD expresses concern that effort to meet the requirements of the memorial would impact the ability of CYFD to meet its performance-based measures.

 

OTHER SUBSTANTIVE ISSUES

 

CYFD has a tiered system for licensing and registering childcare facilities.  All providers receiving payment by CYFD for childcare services must be licensed or registered.  Childcare centers, group homes and family homes are licensed by the Child Care Services Bureau under Title 8, Chapter 16, Part 2 (8.16.2.1 NMAC-Rp 8.16.2.1 NMAC, 08/01/01).  Annual surveys are conducted for all licensed childcare facilities.  Registered homes may provide childcare for up to 4 non-related children, with no more than 2 children at any one time less than 2 years old. These homes are registered and monitored by the Family Nutrition Bureau under Title 8, Chapter 17, Part 2 (8.17.2.1 NMAC-Rp * 17.2.1,11-15-01).  These regulations contain basic health and safety requirements.  Registered homes participating in the federal food and nutrition program are monitored 4 times a year; non-participating registered homes are monitored annually.

 

CYFD has a tiered reimbursement system for childcare subsidy payments.  Differential rates are paid for metro and rural providers as well as for centers, licensed group, licensed family and registered homes. Additionally, different rates are paid for care of infants, toddlers and pre-school age children.  A market rate survey of childcare rates is conducted every 2 years as required by

 

federal rules, which recommend that childcare subsidy rates be at or above the 75th percentile of

market rates.  This means that the maximum rate paid by the State is equal to or greater than the price of at least 75% of the care in a particular category and rate area.

 

BD/ar

 [1]Begin typing on the * in replace mode.  Do not add or delete spaces.