SB 5500 — Modernizing reimbursement rates for the working connections child care program.

ENGROSSEDS-0353.3 SUBSTITUTE SENATE BILL 5500 State of Washington 69th Legislature 2025 Regular Session By Senate Early Learning & K-12 Education (originally sponsored by Senators Alvarado, C.

Wilson, Trudeau, Valdez, Wellman, Lovelett, Frame, Salomon, Bateman, Hasegawa, Krishnadasan, Nobles, and Saldaña)Saldaña READRead FIRSTfirst TIMEtime 02/13/25.01/27/25.

ANReferred ACT Relating to definingCommittee theon costEarly ofLearning quality& childK-12 careEducation. for the biennial survey;

andAN amendingACT RCWRelating 43.216.829.to modernizing reimbursement rates to more accurately reflect the cost of providing high quality child care for the working connections child care program;

amending RCW 43.216.828;

and creating a new section.

NEW SECTION.

RCW(1) 43.216.829The andlegislature 2025finds cthat 412supporting schild 14care areis eachfoundational amended to readsupporting asWashington follows:families and safeguarding a thriving economy.

(1)However, Byfor Junetoo 1stlong, ofWashington's everybroken even-numbered year, the department shall publish a current cost of quality child care study,system ahas costbeen ofupending quality child care study as defined by the earlylives educatorof designworking team,families, andkids, a market rate ((study)) survey and submitemployers. the ((study)) information to the relevant committees of the legislature in compliance with RCW 43.01.036.

(2)Many ForWashington thefamilies purposescannot offind thisor section,afford thechild followingcare definitionswhile apply:child care workers earn poverty level wages for their essential work.

(a)(2) "CostThe oflegislature qualityfurther childfinds carethat studythe asstate definedmade bysignificant progress with the earlyhistoric educatorfair designstart team"for meanskids usingact ain cost2021, estimationwhich model,included developeda inbaseline consultationsubsidized withchild andcare recommendedreimbursement byrate thefor earlychild educatorcare designproviders teamat tothe 85th percentile of the department,market, thatand includes,the atstate ahas minimum,been fixedmaking costsnumerous onother theadvancements followingin factors:recent years.

(i)The Staffnext salariesstep in this progress is updating how the state sets child care subsidy rates to more accurately reflect what it costs to provide quality care, based on athe cost of living, including living wagewages scalefor asproviders, identifiedin byorder theto earlygrow educatorthis designessential team;workforce using p.

p.1 SB 5500 the cost of quality care rate model.

1This ESSBmodel 5500is (ii)a Benefits,modernized includingapproach paidto leave,investing retirementin contributionsquality bycare employers,for families and expensesliving relatedwages toand offeringbenefits discretionaryfor benefitsproviders, toand staff,it suchwas ascocreated healthwith child care providers including the early educator design team, additional content experts, and lifethe insurance;department of children, youth, and families using a methodology that was preapproved by the federal administration for children and families.

(iii)(3) FamilyThe engagementlegislature activities,intends staff,to ormaintain both;the current baseline reimbursement rate for subsidized child care providers, but also to require that going forward recommendations for provider reimbursement rates are based on a cost of quality child care rate model.

(iv)By Planningdoing releaseso, time;the legislature intends to take the next step to fortify the child care infrastructure working families and employers need and deserve.

(v)Sec. Costs for educational materials and curriculum;

and2. (vi) Professional development supports;

andRCW (b)43.216.828 "Currentand cost2021 ofc quality199 childs care301 study"are meanseach usingamended ato costread estimationas modelfollows: that includes, at a minimum, current costs on the following factors:

(i)(1) StaffIt salaries;is the intent of the legislature to systemically increase child care subsidy rates over time until rates are equal to the full cost of providing high quality child care.

(ii)(2) Benefits;((Beginning July 1, 2021, child)) Child care subsidy base rates must achieve, at a minimum, the 85th percentile of market for licensed or certified child care providers based on the most recent market rate survey.

(iii)The Familystate engagementand activities;the exclusive representative for family child care providers must enter into bargaining over the implementation of the subsidy rate increase under this subsection.

(iv)(3)(a) Planning((The releasedepartment time;shall build upon the work of the child care collaborative task force to develop and implement a child care cost estimate model and use the completed child care cost model to recommend subsidy rates at levels that are sufficient to compensate licensed or certified child care providers for the full costs of providing high quality child care.

(v)The Costsdepartment forshall educationalconsider: materials and curriculum;

(i) Adjusting rates to reflect cost of living such as area median income, cost of living by zip code, and (vi)grouping Professionalby developmentcategories supports.such as rural, suburban, or urban;

and (ii) Incorporating the rate model for nonstandard child care hours developed under section 306, chapter 199, Laws of 2021.

(b) The department shall build upon the work of the child care collaborative task force to evaluate options to support access to affordable health care insurance coverage for licensed or certified p.

2 SB 5500 child care providers)) (i) In alignment with (a)(ii) of this subsection, the department must use the cost of quality child care rate model already developed in consultation with child care providers to recommend child care subsidy base rates at levels that are sufficient to compensate licensed or certified child care providers for the costs of providing high quality child care.

At a minimum, the cost of quality child care rate model for base rates must include fixed costs on the following factors:

(A) Staff salaries based on a living wage scale;

(B) Benefits, including paid leave, retirement contributions by employers, and expenses related to offering discretionary benefits to staff, such as health and life insurance;

(C) Family engagement activities, staff, or both;

(D) Planning release time;

(E) Costs for educational materials and curriculum;

and (F) Professional development supports.

(ii) Child care subsidy base rates recommended by the department must not be lower than the rate required under subsection (2) of this section.

(b) The department must review and make recommendations on rate enhancements to support special populations such as infants, nonstandard hours, and special needs rates every three years.

(4) This section does not interfere with, impede, or in any way diminish the right of family child care providers to bargain collectively with the state through the exclusive bargaining representatives as provided for under RCW 41.56.028.

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