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VI. SUMMARY AND CONCLUSIONS

Child Care Market Rate Survey 2023 Page | 41

The 2023 Market Rate Survey, as with previous years, was conducted by gathering data from regulated centers and homes across North Carolina. The survey’s final sample included 4,568 total facilities and received a higher rate of response for centers than homes by only 0.2 percent. Most of these facilities accepted subsidized payment, more than 50 percent for centers, homes, and combined. The percentage of facilities accepting subsidized payment was highest for facilities with three- and four-star level ratings. Similarly, the percentage of children enrolled in facilities that accept subsidized payments was highest for three- and four-star facilities. Among survey respondents, the reported number of children receiving child care services in 2023 has increased since 2021, from 136,224 to 144,912, representing an increase of 6 percent. The number of children being served by centers increased from 130,364 in 2021 to 138,747 in 2023, a 6 percent increase. For homes, the number of children served increased from 5,860 in 2021 to 6,165 in 2023, an increase of 4.9 percent. The number of children served in the child care facilities has increased despite the fact that less facilities are providing child care in 2023 (5,035) as compared to 2021 (5,697); a drop of 478 centers and 184 homes since 2021. This reduction in the number of facilities, especially homes is likely due to the impact of the aftereffects of the COVID-19 pandemic. Not only were there more children reported to be served in 2023 compared to 2021, but also the percentage of children reported overall as subsidized increased from 31.5 percent to 33.5 percent. The market rate survey further gathered information on the process and factors by which facilities set their own private-pay rates. Both the child care subsidy reimbursement rates and the cost of providing care were important determinants along with neighboring facilities’ rates. Child care subsidy reimbursement rates were indicated as determinants by 46.8 percent and 51.5 percent of homes and centers respectively. Along with subsidy programs, many facilities rely on other forms of public funding to cover operating costs. For centers, 73.5 percent reported relying on grants and 53.6 percent reported relying on the Child & Adult Care Food Program (CACFP). Alternatively, for homes, 80.8 percent reported relying on grants and 73.8 percent reported relying on CACFP. In recent years, economic conditions have led to 75.9 percent of facilities increasing their food budget, 61.3 percent of facilities purchasing equipment, materials, or services, and 46.5 percent have increase staff salaries. Across all facilities, no change was reported mostly for daily hours of operation, staff work hours, staff benefits, or other direct staff effects. One way to counter the effects of economic conditions and cover full operating costs not covered by subsidies or public funding is to charge parents the difference between the subsidy reimbursement rate. Of the facilities surveyed, 19.8 percent of centers and 7.2 percent of homes charged this difference. The difference charged by these facilities ranged from $100-300 for centers and homes with a star level of three or higher. Using the data gathered from the 2023 Market Rate Survey and previous versions, market rates were calculated for each age category, facility type, and star level rating. Fewer than 50 percent of children were covered by the subsidy rate across all facilities in 2023 while the modeled rate covered 58.7 percent of total facilities. For centers age category rates, the modeled rates had a 16- 22 percentage difference from the subsidy rate. The percentage difference between the modeled