The High Price of Child Care 2013 A Study of the Cost of Child Care in New Jersey

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1 The High Price of Child Care 2013 A Study of the Cost of Child Care in New Jersey The New Jersey Association of Child Care Resource and Referral Agencies November 2013

2 The New Jersey Association of Child Care Resource and Referral Agencies The New Jersey Association of Child Care Resource and Referral Agencies (NJACCRRA), New Jersey's network of child care resource and referral agencies (CCR&Rs), was incorporated in NJACCRRA s mission is to promote a universally accessible, affordable, and high-quality system of early care and education that is responsive to parental choice. As the leading voice in child care issues and trends in New Jersey, NJACCRRA seeks to positively impact early care and education policy, funding, and service integration through a variety of activities including professional development, advocacy, data collection, and information dissemination. Acknowledgements This report would not have been possible without the invaluable input of the NJACCRRA membership as well as the staff at the local child care resource and referral agencies. NJACCRRA gratefully acknowledges the support provided by all of these individuals and organizations. NJACCRRA PO Box Trenton, NJ info@njaccrra.org Phone: Fax: This material is based upon work supported by the Department of Human Services, State of New Jersey under the CCR&R contracts FY13. Any opinions and conclusions or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the official opinion of the State of New Jersey or Department of Human Services.

3 The High Price of Child Care 2013 A Study of the Cost of Child Care in New Jersey Child Care: A Critical State Commodity Available, affordable, high quality child care is a critical component of our economy. When a state s child care demands are met, parents can work, employers can fill jobs, the tax base can grow, and children's needs for nurturance, supervision, socialization and intellectual stimulation are met. Parents want quality child care for their children, but the high cost of child care makes paying for child care difficult for most working families. The cost of child care is a major household expense, often causing a strain on household budgets and forcing parents to make many sacrifices, sometimes in the quality of the child care arrangement they select for their child. Child care is an increasingly difficult financial burden for working families to bear, says Lynette Fraga, executive director of Child Care Aware of America. Unlike all other areas of education investment, including higher education, families pay the majority of costs for early education. In New Jersey, 66.4% of households with children under age six are in need of some form of child care because all parents in the home are in the workforce; 272,113 children under age six live in a home where both parents work, and 142,121 live with a single working parent (American Community Survey, 2012). Connecting Providers and Consumers The New Jersey Association of Child Care Resource and Referral Agencies (NJACCRRA), New Jersey's network of child care resource and referral agencies (CCR&Rs), promotes a universally accessible, affordable, and high-quality system of early care and education that is responsive to parental choice. NJACCRRA is dedicated to developing and maintaining accountable, local CCR&R services throughout the state. Child care resource and referral agencies provide services to connect parents with the types of child care that meets their needs, and works with providers and caregivers to raise the quality of care in their community. Every county in New Jersey has a CCR&R agency providing services related to this charge. As of December 31, 2012, there were a total of 3,766 licensed child care centers in New Jersey providing 319,745 child care slots. A total of 282 of these centers were accredited by the National Association for the Education of Young Children, a national organization committed to developing and credentialing the quality of care. In addition, there were 2,266 registered family child care homes providing 11,380 child care slots. A total of 11 of these homes were accredited by the National Association for Family Child Care. The High Price of Child Care 1

4 Requests For Child Care Referrals ,868 21,413 38,427 Infant/Toddler Care Care School-Age Care During 2012, local child care resource and referral agencies in New Jersey received over 109,329 requests for child care referrals, including 38,427 requests for infant/toddler care, 21,413 requests for preschool-age care, and 18,868 requests for school-age care. Of the requests, 74,424 were for full-time care, 8,484 for part-time, and 1,640 were for nontraditional-hour care. An additional 2,687 requests were for special needs care. Purpose and Content of the Child Care Price and Market Rate Report 3,420 Requests Length of Child Care Requested 509 Requests 57,964 Requests Made Full-time Care Part-time Care Non-traditional-hour Care The overall purpose of conducting the child care price and market rate study was to determine the range of fees charged for child care provided in center-based programs and family child care homes within local municipalities. New Jersey is diverse in its geography, demography, and range of urban, rural, and suburban communities. The availability and affordability of child care in each community varies widely among counties. The child care facility (referred to as provider) must be accessible, offer the needed services and hours, and have openings. One of the mandates of a local CCR&R is to collect information on the availability and pricing of child care availability in a community. Local child care centers and family child care homes are invited, by their choice, to provide rate information to their local CCR&R so that it may be shared with interested consumers. As such, each county CCR&R has significant access to many, but not all, of the child care rates in municipalities where a child care center of family child care home exists and has reported rate information. (Note: data is based on the way each center/home reports it). The High Price of Child Care 2013 profiles the cost of full-time child care offered through centerbased programs and registered family child care homes. The report looks at the range of fees for each of the following groups: Infant - Birth to 12 months; Toddler - 19 to 30 months; Pre-school- 2.5 to 5 years, and School-Age The report also compares the cost of child care to household income, housing and college tuition. In addition, the child care market rate for each county was calculated. The market rate is the 75th percentile of full-time rates charged by licensed child care providers in the market area. The market rate represents the amount a family will need to be financially able to enroll their child in three out of four providers in the market area. One quarter of the providers in the market area charge more than the market rate and three quarters charge less. For example, if the market rate in a given county is $180 a week for pre-school care, and there are 200 centers offering pre-school care, a family with $180 to spend on child care will be able to afford 150 of the centers and 50 of the centers will have rates that are financially out of reach for the family. The High Price of Child Care 2

5 Obtaining Child Care Data The data used in the analysis was obtained through the local CCR&R database known as NACCRRAware which captures and stores data on child care indicators. CCR&Rs maintain data on child care programs in the communities they serve. All providers in the county are entered into the local CCR&R database; data is updated annually or whenever a provider notifies the CCR&R of changes in rates or other information. All rates provided in this report reflect updated rates for the academic year. Data was extracted by each CCR&R to determine both the average and the median child care rate in each county. The mean is the average of provider rates; when there are some extreme values, either very low or very high, the average will not be as typical of the overall distribution as the median. The median rate is the exact midpoint dividing the distribution in half or in other words it represents the 50th percentile. Half of the reported rates fall below the median and half are above the median rate. After the data were collected, all rates that appeared extremely high or low (known as outliers) were identified, and researchers individually checked each rate report and corrected any errors they found. Subsequent to these corrections, a small portion of the most extreme outliers remaining in the sample were corrected to remove their excessive influence on statistical measures of the rates distributions. If there was overlap in a rate, for example, if there was one rate for children ages 2.5 years to four and another for children ages four to five, then the preschool rate was an average of these two rates. Monthly rates were divided by 4.33 to yield estimated weekly costs. The number of programs reporting these rates may vary depending on the number of providers in each municipality. Information from nearly 2,000 center-based programs (over half of all licensed facilities in New Jersey that provide full time care) and over 1,600 registered family child care providers (approximately 75% of all registered providers in New Jersey) located in 425 different municipalities is included in this report. It is important to note that the variance in the number of centers located within each municipality does affect the comparability of the rates from one municipality to another. For example, one town in a highly populated community may have 15 centers providing child care at varying high and low rates. The average of this town s child care rates is not necessarily comparable to another community where there is only one center providing care. Just as the affordability of care varies throughout the state, the availability of care also fluctuates. In addition to offering a statewide analysis of child care costs, the report also profiles the cost of child care in each county. County profiles offer data from each municipality where center-based child care and family child care homes are available (and reported), separated by the age group of children. These county profiles also contain county-level housing and income indicators obtained from the US Census. This data was used to offer a general comparison of how a family s median household income would be expended on child care costs when compared to other household costs. The 2012 American Community Survey prepared by the U.S. Bureau of the Census was the source for all income and housing costs. Individual county profiles are available on the NJACCRRA website at The High Price of Child Care 3

6 Child Care Is Expensive Findings From the 2013 State Report Child care is a major household expense for parents of young children. In New Jersey: The average annual price of full-time center-based care for an infant 0-12 months in a child care center was $11,534; the average annual price of full-time family child care for an infant 0-12 months was $8,699. Parents with a pre-school age child ages 3 to 5 years paid an average of $9,546 annually for full-time care; parents paid an average annual price of $7,790 for a pre-school age child ages 3 to 5 years in a family child care home. Parents with a school-age child paid an average of $3,475 annually for after care; parents with a school-age child paid an average of $3,268 annually for after care in a family child care home Average Annual Costs for Center-based Child Care State of New Jersey 0-12 months Ages 3-5 School-Age Care (After Care Only) Highest Average Annual Rate $15,132 $12,636 $6,149 Lowest Average Annual Rate $8,892 $7,592 $1,978 Average Annual Rate in State $11,534 $9,546 $3, Average Annual Costs for Family Child Care State of New Jersey 0-12 months Ages 3-5 School-Age Care (After Care Only) Highest Average Annual Rate $11,960 $11,648 $7,280 Lowest Average Annual Rate $ 7,228 $ 6,084 $1,290 Average Annual Rate in State $ 8,699 $ 7,790 $3,268 The U.S. Department of Health and Human Services considers 10 percent of family income for child care as a benchmark for affordable care. The High Price of Child Care 4

7 2013 Annual Costs for Center-based Child Care By County 0-18 months Toddlers months Ages Years School-Age Care* (After Care Only) Atlantic County $9,620 $9,152 $8,528 $2,322 Bergen County $13,364 $12,376 $11,076 $2,666 Burlington County $12,272 $11,492 $9,776 $2,709 Camden County $10,192 $9,568 $8,580 $2,838 Cape May County $10,244 $9,308 $8,476 $1,978 Cumberland County $8,892 $8,424 $7,592 $2,666 Essex County $9,776 $8,944 $8,424 $4,042 Gloucester County $10,296 $9,724 $8,632 $3,612 Hudson County $8,996 $8,684 $7,748 $5,805 Hunterdon County $14,300 $13,416 $11,700 $2,666 Mercer County $13,936 $12,636 $11,180 $2,322 Middlesex County $12,636 $11,700 $10,192 $3,096 Monmouth County $12,220 $11,336 $9,724 $4,945 Morris County $15,132 $13,988 $11,388 $5,805 Ocean County $11,024 $10,244 $9,256 $4,386 Passaic County $11,128 $10,556 $9,152 $6,149 Salem County $9,308 $8,424 $8,008 $2,666 Somerset County $14,612 $13,780 $12,636 $3,182 Sussex County $11,336 $10,556 $9,568 $2,021 Union County $12,168 $10,972 $9,620 $4,859 Warren County $10,764 $9,880 $9,204 $2,236 State of New Jersey $11,534 $10,722 $9,546 $3,475 *School age child care is based on 43 weeks of care annually 2013 Annual Costs for Family Child Care 0-18 months Toddlers months Ages Years School-Age Care* (After Care Only) Atlantic County $7,644 $7,280 $6,864 $1,290 Bergen County $9,828 $9,204 $8,684 $6,192 Burlington County $8,164 $8,060 $7,280 $2,752 Camden County $7,592 $7,228 $6,552 $2,623 Cape May County $8,632 $8,372 $8,112 $4,300 Cumberland County $8,476 $8,008 $7,228 $2,795 Essex County $7,592 $7,540 $7,228 $5,547 Gloucester County $8,216 $8,060 $7,176 $3,053 Hudson County $7,748 $7,644 $6,344 $4,945 Hunterdon County $11,960 $11,960 $11,648 $4,214 Mercer County $8,164 $7,904 $6,864 $3,354* Middlesex County $8,788 $8,372 $8,112 $3,440 Monmouth County $8,008 $7,592 $7,176 $4,816 Morris County $9,360 $9,256 $8,372 $7,280 Ocean County $10,088 $9,724 $8,840 $3,655 Passaic County $7,228 $6,760 $6,084 $3,440 Salem County $7,904 $7,904 $6,916 $3,268 Somerset County $11,596 $11,440 $11,284 N/A Sussex County $9,256 $9,100 $8,944 $3,225 Union County $8,216 $7,748 $7,020 $3,268 Warren County $8,216 $7,956 $6,864 $3,311 State of New Jersey $8,699 $8,434 $7,790 $3,268 * Only 4 family child care homes provided school age child care. School age child care is based on 43 weeks of care annually The High Price of Child Care 5

8 The U.S. Department of Health and Human Services recommends that parents not spend more than 10% of their family income on child care 1. Yet in New Jersey: Parents of 2 parent families earning the median household income spend between 10.8% and 19.26% of their income on infant care in a child care center, depending on the county in which they live, with a state average of 13.5%. Female head-of-households spend between 20.73% and 65.41% of their income on infant care in a child care center with a state average of 41.8%; for family child care, single mothers spend between 17.25% and 38.31% with a state average of 31.53%. Parents of Preschoolers 2 parent families with pre-schoolers ages three to five are spending between 8.85% and 15.84% of their income on child care in a child care center, depending on their home county, with a state average of 11.2%. Female head-of-households spend between 16.96% and 52.47% of their income on pre-school care in a child care center with a state average of 34.6%; for family child care, single mothers spend between 15% and 32.21% with a state average of 28.23%. Least Affordable Counties for Center- Based Child Care Child care costs vary significantly according to the region in which the facility is located. The following tables rank the average price of child care for each of the 21 counties based on the price of child care as a percentage of the county median income for two parent families and female head of households with children 18 years or less. According to the U.S. Census, the median household income is commonly used to provide data about geographic areas and divides households into two equal segments with the first half of households earning less than the median household income and the other half earning more. The median income is considered by many statisticians to be a better indicator than the average household income as it is not dramatically affected by unusually high or low values. In every county, the average cost of center-based infant care exceeds 20 percent of median income for single mothers; the cost exceeds 30% in 17 counties. In every county, the average cost of center-based care for an infant exceeds 10 percent of state median income for a two parent family with children. For a two parent family, the top five least affordable counties for full-time infant care in a licensed child care center were: Passaic, Atlantic, Cumberland, Hudson, and Union. For female-headed households, the five least affordable counties for full-time infant care in a licensed child care center were: Mercer, Passaic, Union, Hudson and Bergen. 1 U.S. Government Printing Office. (2013, May 20). Child Care and Development Fund (CCDF) Program; Proposed Rules. Federal Register 78(97). Retrieved November, 2013 from The High Price of Child Care 6

9 Cost of Child Care for an Infant in Licensed Center as a Percentage of Annual Cost of Center-based Infant Care Female-headed Household Annual Median Infant Care as a Percentage of Affordability Ranking (Least to Most) Annual Median Median 2 Parent Family Household Infant Care as a Percentage of Affordability Ranking (Least to Most) Atlantic County $9,620 $27, % 14 $53, % 2 Bergen County $13,364 $31, % 5 $107, % 15 Burlington County $12,272 $42, $93, % 12 Camden County $10,192 $25, % 7 $71, % 8 Cape May County $10,244 $26, % 9 $61, % 6 Cumberland County $8,892 $28, % 17 $51, % 3 Essex County $9,776 $23, % 6 $59, % 7 Gloucester County $10,296 $32, % 16 $93, % 20 Hudson County $8,996 $20, % 4 $52, % 4 Hunterdon County $14,300 $68, % 21 $132, % 21 Mercer County $13,936 $21, % 1 $99, % 10 Middlesex County $12,636 $31, % 8 $91, % 11 Monmouth County $12,220 $32, % 11 $103, % 18 Morris County $15,132 $54, % 19 $119, % 14 Ocean County $11,024 $30, % 15 $78, % 9 Passaic County $11,128 $22, % 2 $57, % 1 Salem County $9,308 $24, % 10 $76, % 16 Somerset County $14,612 $40, % 13 $112, % 13 Sussex County $11,336 $32, % 12 $100, % 19 Union County $12,168 $25, % 3 $71, % 5 Warren County $10,764 $45, % 20 $88, % 17 New Jersey $11,534 $27, % $85, % Source: US Census Bureau, 2012 American Community Survey 1 year estimates. In every county, the average cost of center-based care for a preschooler exceeds 15 percent of median income for single mothers; the cost exceeds 25% in 17 counties. In 16 counties, the average cost of center-based care for a preschooler exceeds 10 percent of state median income for a two parent family. The top five least affordable counties for full-time care for a pre-school age child in a licensed child care center a two parent family were: Atlantic, Passaic, Cumberland, Hudson and Essex. For female-headed households, the five least affordable counties for full-time pre-school care in a licensed child care center were: Mercer, Passaic, Union, Hudson and Essex. School-age child care, which is not full time, may be offered before school, after school or a combination of both. The rates reported in this study only include costs of care during the after-school hours. Annual rates are based on 43 weeks of care. For some counties, the rates for school-age child care also include those rates reported by license-exempt centers (i.e. care provided in a public school or other type of license exempt facility). The most expensive counties for school-age child care in a child care center were: Passaic, Morris, Hudson, Monmouth and Union. The High Price of Child Care 7

10 Cost of Child Care for a Preschooler in a Licensed Center as a Percentage of Female-headed Household Median 2 Parent Household Annual Cost of Center-based 4 Year Old Care Annual Median Care as a Percentage of Affordability Ranking (Least to Most) Annual Median Care as a Percentage of Affordability Ranking (Least to Most) Atlantic County $8,528 $27, % 11 $53, % 1 Bergen County $11,076 $31, % 6 $107, % 17 Burlington County $9,776 $42, % 18 $93, % 14 Camden County $8,580 $25, % 7 $71, % 8 Cape May County $8,476 $26, % 9 $61, % 6 Cumberland County $7,592 $28, % 16 $51, % 3 Essex County $8,424 $23, % 5 $59, % 5 Gloucester County $8,632 $32, % 17 $93, % 20 Hudson County $7,748 $20, % 4 $52, % 4 Hunterdon County $11,700 $68, % 21 $132, % 21 Mercer County $11,180 $21, % 1 $99, % 11 Middlesex County $10,192 $31, % 10 $91, % 12 Monmouth County $9,724 $32, % 13 $103, % 19 Morris County $11,388 $54, % 19 $119, % 17 Ocean County $9,256 $30, % 14 $78, % 9 Passaic County $9,152 $22, % 2 $57, % 2 Salem County $8,008 $24, % 8 $76, % 13 Somerset County $12,636 $40, % 12 $112, % 10 Sussex County $9,568 $32, % 15 $100, % 18 Union County $9,620 $25, % 3 $71, % 7 Warren County $9,204 $45, % 20 $88, % 15 New Jersey $9,546 $27, % $85, % Source: US Census Bureau, 2012 American Community Survey 1 year estimates. Least Affordable Counties for Family Child Care In every county, the average cost of infant care in a family child care home exceeds 15 percent of median income for single mothers; the cost exceeds 20% in 17 counties. In 11 counties, the average cost of infant care in a family child care home exceeds 10 percent of state median income for a two parent family. For a two parent family, the top five least affordable counties for full-time infant care in a family child care home were: Cumberland, Hudson, Atlantic, Cape May and Essex. For female-headed households, the five least affordable counties for full-time infant care in a family child care home were: Mercer, Hudson, Cape May, Union and Ocean. The High Price of Child Care 8

11 Cost of Child Care for an Infant in Family Child Care Home as a Percentage of Female-headed Household Median 2 Parent Household Annual Cost of Family Child Care Home for Infant Care Annual Median Infant Care as a Percentage of Affordability Ranking (Least to Most) Annual Median Infant Care as a Percentage of Affordability Ranking (Least to Most) Atlantic County $7,644 $27, % 14 $53, % 3 Bergen County $9,828 $31, % 9 $107, % 15 Burlington County $8,164 $42, % 18 $93, % 18 Camden County $7,592 $25, % 11 $71, % 9 Cape May County $8,632 $26, % 3 $61, % 4 Cumberland County $8,476 $28, % 10 $51, % 1 Essex County $7,592 $23, % 8 $59, % 5 Gloucester County $8,216 $32, % 16 $93, % 17 Hudson County $7,748 $20, % 2 $52, % 2 Hunterdon County $11,960 $68, % 20 $132, % 16 Mercer County $8,164 $21, % 1 $99, % 19 Middlesex County $8,788 $31, % 15 $91, % 12 Monmouth County $8,008 $32, % 17 $103, % 21 Morris County $9,360 $54, % 21 $119, % 20 Ocean County $10,088 $30, % 5 $78, % 6 Passaic County $7,228 $22, % 6 $57, % 7 Salem County $7,904 $24, % 7 $76, % 10 Somerset County $11,596 $40, % 13 $112, % 11 Sussex County $9,256 $32, % 12 $100, % 14 Union County $8,216 $25, % 4 $71, % 8 Warren County $8,216 $45, % 19 $88, % 13 New Jersey $8,699 $27, % $85, % Source: US Census Bureau, 2012 American Community Survey 1 year estimates. In all 21 counties, the average cost of care for a preschooler in a family child care home was 15 percent or higher than the median income for single mothers; in 17 counties the cost exceeds 20 percent of the median income for single mothers. The top five least affordable counties for full-time care for a preschool age child in a family child care home for a two parent household were: Cumberland, Cape May, Atlantic, Essex and Hudson. For female-headed households, the five least affordable counties for full-time pre-school care in a family child care home were: Mercer, Hudson, Cape May Essex and Ocean. The rates charged by a family child care provider for school age child care vary from provider to provider. Some providers may choose to charge their full-time rate even if the child is only attending during the after school hours. The most expensive counties for school-age child care provided in a registered family child care home were: Morris, Bergen, Essex, Hudson and Monmouth. The High Price of Child Care 9

12 Cost of Child Care for a Preschooler in a Family Child Care Home as a Percentage of Female-headed Household Median 2 Parent Household Annual Cost of Family Child Care Home for 4 Year Old Care Annual Median Care as a Percentage of Affordability Ranking (Least to Most) Annual Median Care as a Percentage of Affordability Ranking (Least to Most) Atlantic County $6,864 $27, % 15 $53, % 3 Bergen County $8,684 $31, % 11 $107, % 15 Burlington County $7,280 $42, % 18 $93, % 16 Camden County $6,552 $25, % 12 $71, % 10 Cape May County $8,112 $26, % 3 $61, % 2 Cumberland County $7,228 $28, % 14 $51, % 1 Essex County $7,228 $23, % 4 $59, % 4 Gloucester County $7,176 $32, % 16 $93, % 18 Hudson County $6,344 $20, % 2 $52, % 5 Hunterdon County $11,648 $68, % 19 $132, % 14 Mercer County $6,864 $21, % 1 $99, % 21 Middlesex County $8,112 $31, % 13 $91, % 13 Monmouth County $7,176 $32, % 17 $103, % 20 Morris County $8,372 $54, % 20 $119, % 19 Ocean County $8,840 $30, % 5 $78, % 6 Passaic County $6,084 $22, % 10 $57, % 7 Salem County $6,916 $24, % 6 $76, % 11 Somerset County $11,284 $40, % 8 $112, % 8 Sussex County $8,944 $32, % 9 $100, % 12 Union County $7,020 $25, % 7 $71, % 9 Warren County $6,864 $45, % 21 $88, % 17 New Jersey $7,790 $27, % $85, % Source: US Census Bureau, 2012 American Community Survey 1 year estimates. Child Care Compared to Other Costs According to a recent report by the United Way of Northern New Jersey, 1 in 3 NJ households can t afford the basics of housing, food, health care, child care, and transportation 2. The cost of child care is a major household expense, often causing a strain on household budgets. In New Jersey, the monthly cost of child care for two children, an infant and a preschooler, exceeded the monthly housing costs for renters in all counties. In ten counties, the monthly cost of child care for two children was just slightly less (< $400.00) than housing costs for owners. The cost of infant care was just slightly less (<$250.00) than the monthly housing costs for renters in all counties with the exception of Hunterdon, Ocean and Sussex Counties. In nine counties, the average annual cost of center based infant care was higher than the average annual tuition fee at 4-year NJ public colleges. A healthy change of diapers costs $112/month 2 United Way of Northern New Jersey. (August 2012). ALICE- Asset limited, Constrained, Employed- Study of Financial Hardship in New Jersey. Retrieved from UnitedWayNNJ.org/ALICE. The High Price of Child Care 10

13 Average Monthly Expenses for Child Care Compared to Housing Infant Care Infant in a 4-Year Old 4-Year Old Child Care for Monthly Monthly in Center- Family Care in Care in Two Kids Housing Housing Based Child Care Center- Family (Infant + 4 Costs for Cost for Program Home Based Child Care Year Old) Owners Renters Program Home Atlantic County $802 $637 $711 $572 $1,513 $1,893 $1,033 Bergen County $1,114 $819 $923 $724 $2,037 $2,865 $1,295 Burlington County $1,023 $680 $815 $607 $1,838 $1,983 $1,142 Camden County $849 $632 $715 $546 $1,564 $1,900 $959 Cape May County $854 $719 $706 $676 $1,560 $1,885 $979 Cumberland Cty $741 $706 $633 $602 $1,374 $1,565 $962 Essex County $815 $633 $702 $598 $1,517 $2,725 $999 Gloucester County $858 $685 $719 $529 $1,577 $1,989 $1,059 Hudson County $750 $646 $646 $971 $1,396 $2,644 $1,181 Hunterdon County $1,192 $997 $975 $572 $2,167 $2,559 $1,229 Mercer County $1,161 $680 $932 $676 $2,093 $2,203 $1,085 Middlesex County $1,053 $732 $849 $598 $1,902 $2,350 $1,243 Monmouth County $1,018 $667 $810 $698 $1,828 $2,487 $1,220 Morris County $1,261 $780 $949 $737 $2,210 $2,719 $1,312 Ocean County $919 $841 $771 $507 $1,690 $1,962 $1,258 Passaic County $927 $602 $763 $576 $1,690 $2,510 $1,132 Salem County $776 $659 $667 $940 $1,443 $1,713 $940 Somerset County $1,218 $966 $1,053 $745 $2,271 $2,615 $1,294 Sussex County $945 $771 $979 $745 $1,924 $2,273 $1,214 Union County $1,014 $685 $802 $585 $1,816 $2,598 $1,143 Warren County $897 $685 $767 $572 $1,664 $2,165 $973 State of New Jersey $961 $725 $796 $649 $1,757 $2,342 $1,148 Source: US Census Bureau, 2012 American Community Survey 2013 Annual Tuition Rates in New Jersey New Jersey Public Colleges College Rates Rutgers University $12,965 New Jersey Institute of Technology $9,577 Ramapo College $13,144 Richard Stockton College $12,322 The College of New Jersey $14,378 Kean University $10,601 Rowan University $12,380 New Jersey City University $10,422 Montclair State University $11,058 William Paterson University $11,694 State Average $11,854 New Jersey Association of State Colleges and Universities, 2013; Rutgers and NJIT Tuition was retrieved from their individual websites. Annual Cost of Infant Care in a Child Care Center: $11,534 Annual Cost for a 4- Year Old in Child Care Center: $9,546 About 60 percent of funding for child care in the United States comes directly from parents. In comparison, families only pay about 23 percent of the cost of a public college education, while the rest is heavily subsidized by state and federal funds. 3 It is important to note that parents with young children are typically at the early stages of their earning potential, while parents of college-age students are typically in their prime earning years, thus making the cost of child care even less affordable for the young family. 3 Mitchell, A., Stoney, L., & Dichter, H. (2001). Financing child care in the United States: An expanded catalog of current strategies. Retrieved November, 2013, from the Ewing Marion Kaufman Foundation at The High Price of Child Care 11

14 Cost of Center Based Child Care Compared to Monthly Center Based Care For An Infant Female Head of Household - Renting NJ Monthly Median $2,299 $190 $961 Child Care Center Based Care For A Preschooler Female Head of Household - Renting NJ Monthly Median $2,299 $355 $796 Child Care Housing Housing $1,148 Remaining $1,148 Remaining Center Based Care For 2 Children 2 Parent Family -Homeowners NJ Monthly Median $7,099 $3,000 $1,757 Child Care Housing $2,342 Remaining The average earning female head of household ($2,299/month) could not afford rent and child care for 2 children in a child care center. $(606) $1,757 $1,148 $(1,000) $- $1,000 $2,000 $3,000 $4,000 Child Care Rent Remaining The average earning female head of household ($2,299/month) could not afford homeowner costs and child care for an infant in a child care center. $(1,004) $961 $2,342 $(2,000) $(1,000) $- $1,000 $2,000 $3,000 $4,000 Child Care Mortgage Remaining The High Price of Child Care 12

15 Cost of Family Child Care Compared to Monthly Family Child Care For An Infant Female Head of Household - Renting NJ Monthly Median $2,299 Family Child Care For A Preschooler Female Head of Household - Renting NJ Monthly Median $2,299 $426 $1,148 $725 Child Care Housing Remaining $502 $1,148 $649 Child Care Housing Remaining Family Child Care For 2 Children 2 Parent Family - Homeowner NJ Monthly Median $7,099 $1,374 Child Care $3,383 $2,342 Housing Remaining The average earning female head of household ($2,299/month) could not afford rent or family child care for 2 children (infant and preschooler). $(223) $1,374 $1,148 $(1,000) $- $1,000 $2,000 $3,000 Child Care Rent Remaining The average earning female head of household ($2,299/month) could not afford a mortgage and family child care for an infant. $(768) $725 $2,342 $(1,000) $- $1,000 $2,000 $3,000 $4,000 Child Care Mortage Remaining The High Price of Child Care 13

16 How does New Jersey s Child Care Subsidy Rate? Approximately 56,500 children in New Jersey receive some type of child care subsidy each month. The New Jersey full time subsidy reimbursement rate for a non-accredited center is $ per week for infants up to age 2.5; $ for children ages 2.5 to age 13. For family child care, the New Jersey full time subsidy reimbursement rate for a non-accredited family child care home is $ per week for an infant up to age 2.5 and $ for children 2.5 to age 13. After-care for a school-age child for two to three hours per day is $66.20 per week. Families eligible for subsidy include Temporary Assistance to Needy Families (TANF) Work First New Jersey (WFNJ) participants, as well as families where the child guardian(s) are working a minimum of 30-hours per week or in school full-time, and have household income at/or below 200 percent of the Federal Poverty Index (FPI). As of November 2013, a family of three would need to have a household income below $37,060. Federal policy encourages states to identify the 75th percentile market rate (the amount a family will need to be financially able to enroll their child in three out of four providers in the market area) and set subsidy reimbursement rates at that level. Federal Child Care and Development Fund rules require that child care subsidy rates must be sufficient to ensure equal access and allow parents freedom of choice in selecting a provider. The preamble to the CCDF Final Rule suggests as a benchmark that rates that are established at least at the 75th percentile would be regarded as providing equal access. An examination of current New Jersey Department of Human Services reimbursement rates for families receiving child care subsidies compared to the data generated by the survey reveals that the maximum reimbursement rates for center based care in New Jersey are significantly below the market rate in ALL 21 counties. This limits parental choice by forcing subsidized families to either pay the difference between the center rate and voucher payment or place their child in an Subsidy Rate under-funded child care arrangement with insufficient resources to ensure quality. Families who qualify for child care subsidy assistance Infant Care Preschool have limited options and too often choose care based on cost rather than quality. The average cost for preschool (6 hour day) in one of NJ's state funded programs (fka Abbott) is approximately $13,000 per year. The care provided in those centers is regarded as high quality. upgrade curriculum materials - all indicators of quality care. Center-Based Child Care Market Rate Compared to Subsidy Rate Research has demonstrated that the quality of care provided during the early years can promote child development, literacy and school readiness. However, providing quality child care requires low child/staff ratios, staff credentials and training, and age appropriate supplies and equipment, and the cost often exceeds what child care centers can realistically charge for services given income restrictions among their consumers. Child care programs that do accept the state maximum payment rate are often unable to attract and retain qualified teaching staff, better equip classrooms, and The High Price of Child Care 14

17 Shortfall Between County Market Rate and Child Care Subsidy for Infant Care in a Child Care Center 0-18 months Reimbursement Rate Shortfall Atlantic County Bergen County Burlington County Camden County Cape May County Cumberland County Essex County Gloucester County Hudson County Hunterdon County Mercer County Middlesex County Monmouth County Morris County Ocean County Passaic County Salem County* Somerset County Sussex County Union County Warren County Shortfall Between County Market Rate and Child Care Subsidy for Preschoolers in a Child Care Center Preschoolers Reimbursement Rate Shortfall Atlantic County Bergen County Burlington County Camden County Cape May County Cumberland County Essex County Gloucester County Hudson County Hunterdon County Mercer County Middlesex County Monmouth County Morris County Ocean County Passaic County Salem County* Somerset County Sussex County Union County Warren County The High Price of Child Care 15

18 Shortfall Between County Market Rate and Child Care Subsidy for Infant Care in a Family Child Care Home 0-18 months Reimbursement Rate Shortfall Atlantic County Bergen County Burlington County Camden County Cape May County* N/A N/A Cumberland County Essex County Gloucester County Hudson County Hunterdon County Mercer County Middlesex County Monmouth County Morris County Ocean County Passaic County Salem County* N/A N/A Somerset County Sussex County Union County Warren County *Too few homes to calculate a market rate Shortfall Between County Market Rate and Child Care Subsidy for Preschoolers in a Family Child Care Home Preschoolers Reimbursement Rate Shortfall Atlantic County Bergen County Burlington County Camden County Cape May County* N/A N/A Cumberland County Essex County Gloucester County Hudson County Hunterdon County Mercer County Middlesex County Monmouth County Morris County Ocean County Passaic County Salem County* Somerset County Sussex County Union County Warren County *Too few homes to calculate a market rate The High Price of Child Care 16

19 Summary and Recommendations Child care is a major part of family life and a critical support for working parents, particularly for single working parents. Unfortunately, as the cost of child care continues to increase, the price of child care presents an even greater challenge. Due to the high cost of child care, some parents have been forced to withdraw their child(ren) from organized child care programs or licensed settings. This means that more children may be in unregulated settings where providers have not had a background check or training in health and safety practices, such as first aid or CPR, or training in child development to ensure age-appropriate activities to promote the social, emotional, physical and cognitive development of children. Particularly with the current economy, it is essential that more families receive assistance to afford the cost of quality child care. Working families earning low incomes have very few choices without assistance. But, many families in New Jersey, not just the working low income families, are struggling with the high cost of child care. It is essential that a system be developed to underwrite the cost of child care so that all families, and not just wealthy families, can afford the cost of quality child care. NJACCRRA proposes these recommendations to improve access to affordable, high-quality care: Increase federal and state investments in child care fee assistance and quality improvement efforts to provide stable and predictable funding to cover a child care center s full range of expenses for a high-quality program; Raise the maximum reimbursement rates for center based child care to reflect the 75th percentile of rates local child care providers charge families without a subsidy to ensure eligible children have equal access to quality child care; Provide resources for planning and developing child care capacity to increase the availability of child care options for working families; Raise the income eligibility threshold to allow struggling families access to child care subsidy support; Revise tax codes to help families at all income levels pay for care; Include tiered reimbursement rates as part of the Grow NJ Kids plan based on the provider s quality rating; Design a system to help underwrite the cost of child care so that all families, not just wealthy families, can afford the cost of quality child care. The High Price of Child Care 17

20 Appendix List of NJACCRRA Member Agencies County Tables The High Price of Child Care 18

21 NJACCRRA Member Agencies Atlantic County The Women's Center Cornerstone Commerce Center 1201 New Road, Suite 240 Linwood, NJ Phone: (609) Web Site: Gloucester County Quality Care Resource and Referral Services, Inc. 6 North Broad Street, Suite 300 Woodbury, New Jersey Phone: (856) Web Site: Ocean County The Children's Home Society of NJ 1433 Hooper Avenue, Suite 340 Toms River, NJ Phone: (732) Web Site: Bergen County Bergen County Office for Children One Bergen County Plaza-2nd Floor Hackensack, NJ Phone: (201) Web Site: Hudson County Urban League of Hudson County 253 Martin Luther King Drive Jersey City, NJ Phone: (201) Web Site: Passaic County 4CS of Passaic County, Inc Two Market Street, Suite 300 Paterson, NJ Phone: (973) Web Site: Burlington County Burlington County CAP 718 South Route 130 Burlington, NJ Phone: (609) Web Site: Hunterdon County NORWESCAP Child & Family Res.Serv. 84 Park Ave, E-104 Flemington, NJ Phone: (908) Web Site: Salem County Quality Care Resource and Referral Svcs, Inc. 5 Route 45, Suite 200 Mannington, NJ Phone: (856) Web Site: Camden County Camden County Department of Children s Services 512 Lakeland Road, Suite 200 Blackwood, NJ Phone: (856) Web Site: Mercer County Child Care Connection 1001 Spruce Street, Suite 201 Trenton, NJ Phone: (609) Web Site: Somerset County Community Child Care Solutions, Inc. 92 East Main Street, Suite 304 Somerville, NJ Phone: (908) Web Site: Cape May County Quality Care Resource and Referral Services, Inc Rt. 47 S, Suite A Rio Grande, NJ Phone: (609) Web Site: Cumberland County Quality Care Resource and Referral Services, Inc. 415 Landis Ave. Suite 202 Vineland, NJ Phone: (856) Web Site: Essex County Programs for Parents, Inc. 33 Washington Street Newark, NJ Phone: (973) Web Site: Middlesex County Community Child Care Solutions, Inc. 103 Center Street Perth Amboy, NJ Phone: (732) Web Site: Monmouth County Child Care Resources 3301 C Route 66 PO Box 1234 Neptune, NJ Phone: (732) Web Site: Morris County Child & Family Resources 111 Howard Blvd. Suite 201 Mt. Arlington, NJ Phone: (973) Web Site: Sussex County NORWESCAP Child & Family Res.Servs. 186 Halsey Road, Ste. 1 Newton, NJ Phone: (973) Web Site: Union County Community Coordinated Child Care of Union Cty 225 Long Avenue Hillside, NJ Phone: (973) Web Site: Warren County NORWESCAP Child & Family Res. Serv. 350 Marshall Street Phillipsburg, NJ Phone: (908) Web Site: The High Price of Child Care 19

22 2012 Average Weekly Costs for Center-based Child Care By County 0-18 months Toddlers months Ages Years Before/After School-Age Care Atlantic County Bergen County Burlington County Camden County Cape May County Cumberland County Essex County Gloucester County Hudson County Hunterdon County Mercer County Middlesex County Monmouth County Morris County Ocean County Passaic County Salem County Somerset County Sussex County Union County Warren County State of New Jersey Median Weekly Costs for Center-based Child Care By County 0-18 months Toddlers months Ages Years Before/After School-Age Care Atlantic County Bergen County Burlington County Camden County Cape May County Cumberland County Essex County Gloucester County Hudson County Hunterdon County Mercer County Middlesex County Monmouth County Morris County Ocean County Passaic County Salem County Somerset County Sussex County Union County Warren County State of New Jersey The High Price of Child Care 20

23 2012 Average Annual Costs for Center-based Child Care By County 0-18 months Toddlers months Ages Years Before/After School-Age Care Atlantic County 9,620 9,152 8,528 2,322 Bergen County 13,364 12,376 11,076 2,666 Burlington County 12,272 11,492 9,776 2,709 Camden County 10,192 9,568 8,580 2,838 Cape May County 10,244 9,308 8,476 1,978 Cumberland County 8,892 8,424 7,592 2,666 Essex County 9,776 8,944 8,424 4,042 Gloucester County 10,296 9,724 8,632 3,612 Hudson County 8,996 8,684 7,748 5,805 Hunterdon County 14,300 13,416 11,700 2,666 Mercer County 13,936 12,636 11,180 2,322 Middlesex County 12,636 11,700 10,192 3,096 Monmouth County 12,220 11,336 9,724 4,945 Morris County 15,132 13,988 11,388 5,805 Ocean County 11,024 10,244 9,256 4,386 Passaic County 11,128 10,556 9,152 6,149 Salem County 9,308 8,424 8,008 2,666 Somerset County 14,612 13,780 12,636 3,182 Sussex County 11,336 10,556 9,568 2,021 Union County 12,168 10,972 9,620 4,859 Warren County 10,764 9,880 9,204 2,236 State of New Jersey 11,534 10,722 9,546 3, County Market Rates for Center-based Child Care 0-18 months Toddlers months Ages Years Before/After School-Age Care Atlantic County Bergen County Burlington County Camden County Cape May County Cumberland County Essex County Gloucester County Hudson County Hunterdon County Mercer County Middlesex County Monmouth County Morris County Ocean County Passaic County Salem County* Somerset County Sussex County Union County * Warren County State of New Jersey The High Price of Child Care 21