Imagine if your local elementary school took a funding cut every time a student was absent.
Every sick day, every family vacation, every snow day would be a direct cut to the school’s bottom line.
That’s the reality many child care providers face if they choose to serve children whose families receive government assistance for care.
Every state has some version of government-funded child care assistance for low-income families. In about half of U.S. states, providers are reimbursed based on a child’s enrollment.
Ohio is one of 27 states and U.S. territories that reimburses child care providers based on attendance.
Under Ohio’s current system, providers can seek reimbursement for a limited number of absence days if a child is absent due to illness, a snow day or other factors.
After that, every absence comes at a cost.
That was set to change until a reversal in federal policy earlier this year. Now, Ohio lawmakers are considering a bill to make reimbursement based on attendance permanent.
What happened?
In 2024 under President Joe Biden, the Office of Child Care updated federal rules to require all states to pay child care subsidies based on enrollment.
The Trump administration reversed those rules not long after accusations of systemic child care fraud went viral in Minnesota. Under the updated federal rules, it’s up to states to decide whether to reimburse child care centers based on attendance or enrollment.
The administration argued the change would better equip states to prevent child care fraud — a problem state data suggests is rare in Ohio.
Ohio’s House Bill 647 would eliminate the state’s plans to transition to enrollment-based pay for publicly funded child care (PFCC) providers by the former federal deadline of July 2028.
The bill was passed by the House and introduced in the Senate last month.
Kara Wente, head of the Ohio Department of Children and Youth, said payment based on attendance is the preference of Gov. DeWine’s administration.
“Ohio is paying on attendance and given our focus on ensuring that our dollars are going to the kids that are being served, that is where we intend to stay,” she said.
But some child care providers and advocates argue reimbursement based on attendance hurts the sector’s viability, raises costs for private pay families and disincentivizes providers from serving low-income children.
“Private-pay families already pay based on enrollment, typically paying in advance to reserve their child’s slot. This enrollment-based approach allows programs to budget responsibly and maintain staffing stability,” explained Qianna Tidmore, executive director of the Ohio Association for the Education of Young Children.
“When payments are tied to attendance rather than enrollment, providers assume financial risk for circumstances they cannot control — including child illness, family emergencies, transportation issues, or inconsistent parental work schedules,” Tidmore wrote in an address to state lawmakers.
Jeanetta Elia, who runs M1 Kids Academy in Mansfield, said she understands the need to combat fraud. But she also said it’s frustrating to have changes that were meant to support a struggling industry rolled back.
“They’re making laws and making changes off of one or two people or things that went wrong, instead of looking at all the things that are going right and making the rules and laws off of that,” she said.
Lyanne Gutierrez of Groundwork Ohio, a non partisan advocacy organization focused on children and families, said providers typically charge based on enrollment for private pay families.
That’s because most of a child care provider’s operating expenses — teacher pay, insurance, rent, utilities — don’t fluctuate along with minor attendance disruptions.
“There’s context around all of those policies, but overall it is the private industry standard,” she said. “Providers will always say enrollment-based payment is the priority or what’s preferable.”
Children must be in attendance for 33 hours a week for full reimbursement
Providers must bill for at least 33 hours a week to get a full reimbursement. Otherwise, they receive a part-time reimbursement rate — which is about 69 percent of the full-time rate.
Providers are reimbursed hourly for children who receive less than 10 hours of care each week.
The rules surrounding child care reimbursement hours changed with last year’s biennium budget. Previously, children only had to attend 25 hours per week for a full-time payment.
These rules and their impact on how much providers get paid can make budgeting a challenge for providers.
“I track weekly our expenses and our revenue, and I’m always kind of balancing,” said Peg Tazewell, executive director of Knox County Head Start. “It is a costly, costly business to operate, especially when you can’t solidly predict income.”
Tazewell said the state became more lenient with PFCC reimbursements after the pandemic. The state now allows providers to be reimbursed for up to 20 absence days per child every six months.
“But if there’s a crisis in the family, if someone is very sick, they’re going to use their absence days up pretty quickly,” she said.
Child care providers are not allowed to use absence days if they close entirely, as might be the case on a holiday or snow day.
Wente acknowledged that there’s a balance to be struck between maximizing taxpayer dollars and supporting the child care industry, which is crucial to the health of the state’s workforce.
Wente said in April that ODCY will need an additional $375 million per year to maintain its current child care programs in the state’s next biennium budget, per reporting from Gongwer News Service.
“We have to support the (child care) industry. They do critical work that makes sure that our economy can function on all cylinders,” Wente said.
“I think we continue to explore those categories (full-time, part-time and hourly) and figure out what the right balance is to make sure that the industry can make ends meet and that we are making sure taxpayer dollars are going absolutely as far as they can. Because we know that Ohio is growing and we want more people in the workforce.”
