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IV. CHILD CARE PROGRAM OPERATION Child Care Market Rate Survey 2023 Page | 16

As in previous surveys, the 2023 survey included questions regarding factors that impact day-to- day facility operation and rates. Providers were asked to identify the method(s) they used to set private-pay rates, whether their facility received monetary or nonmonetary contributions, and whether the current economy affects their ability to provide services. A. BASIS FOR SETTING PRIVATE-PAY RATES Facilities generally use more than one source of information to set their child care rates. Table 6 presents information compiled from responses, on the various factors used in setting rates. Among 3,283 facilities responding to the question concerning bases for rate setting, the most commonly cited factor was the current child care subsidy rate. A total of 1,582 facilities, or 48.18 percent of all respondents, cited this factor. Among these 1,582 respondents, over two-thirds represented three- and four-star facilities (648 and 417, respectively). The rate charged by neighboring facilities was viewed as equally important, as cited by 46 percent of the total sample. Despite this common trend, centers and homes differ elsewhere on their rate- setting factors. Homes are more likely than centers to use what they believe parents can afford as a basis for setting rates. Differing also, the input of corporate offices, church boards, or a school’s Board of Directors was cited by 26 percent of centers but by only 1.2 percent of homes. Table 6 displays the information used to set private-pay rates. Table 7 displays factors used when setting rates and also shows the number and percent of children who are enrolled in facilities. Among 144,912 children represented in the facilities responding to the survey, the greatest number (75,907 or 52.6 percent) are enrolled in facilities that use neighboring facilities’ rates as a guideline for setting private-pay rates. Child care subsidy reimbursement rates and the actual cost of child care are also important determinants in rate setting. About 40 percent of children are enrolled in facilities that use Child care subsidy reimbursement rates as a guideline for setting rates while about 43 percent are enrolled in facilities that use actual cost of child care to set rates. Facilities that use corporate offices, church boards, or school board directors’ decision to set private-pay rates served about 45 percent of children.