New State Budget Includes $112 Million in New Investments in Child Care to Support Working Families & Providers

Budget Raises Reimbursement Rates for Providers & Continues to Reduce Costs for Families

July 10, 2023

(TRENTON) – The Fiscal Year 2024 State budget Governor Phil Murphy recently signed invests $112 million in new state funding to further increase reimbursement rates for child care providers and continue assistance first made available to providers and families during the pandemic.

“Access to affordable, quality child care is indispensable,” Commissioner Sarah Adelman said. “These child care investments continue the Murphy administration’s efforts to support child care providers vital to working families and the state economy, and ensure that more children have access to tools that are critical to their development. These investments allow providers and families to continue to benefit from assistance that has been so valuable.”

The budget invests $112 million, in part to make permanent the supplemental payments paid to child care providers during the COVID-19 pandemic. Making this payment permanent will help eligible families by covering more of the cost of child care, thereby reducing what a parent may owe if there is a difference between what the state pays and what the provider charges.

During the COVID-19 pandemic, child care providers received an additional supplemental payment of $300 for full-time care, or $150 for part-time care per child per month to ensure they can continue to operate and provide this service, which is so important to working families. The budget makes this supplemental payment a permanent part of the child care assistance rate to maintain this support.

The last state budget included $12.8 million for a rate increase that took effect on March 1 to help providers in the state’s child care assistance program implement New Jersey’s minimum wage increase. Additional funding for providers is also included in the new budget for another minimum wage increase this upcoming January.

After this increase, monthly infant care rates for licensed centers will have increased by nearly 114 percent under the Murphy Administration – from about $724 per month to $1,549 and close to 104 percent on average for all other age groups.

These rate increases result in higher reimbursement rates for all child care programs and even higher rates for those rated through GrowNJKids, NJ’s quality rating improvement system.

The $112 million investment in the budget allows Human Services to:

• Continue the $300 (full-time care) or $150 (part-time care) supplemental payment.
• Continue paying child care providers based on enrollment rather than attendance.
• Continue waiving copayments for families.
• Bolster training and technical assistance for school districts that enroll in the Grow NJ Kids program, which supports quality child care and early learning.
• Increase rates in early 2024.

“Having access to affordable and reliable child care is critical for working families,” Deputy Commissioner of Social Services Elisa Neira said. “Families continue to shoulder rising prices for basic necessities. These investments can help alleviate some of that financial burden, and provide child care providers the support they need to continue to operate and grow.”

“Families should know that help is available. We urge anyone seeking assistance with child care to visit ChildCareNJ.gov or contact their local county Child Care Resource and Referral Agency,” said Assistant Commissioner Natasha Johnson, who directs Human Services’ Division of Family Development, which oversees the child care program.

For more information on the state’s child care program please visit ChildCareNJ.gov