[ST. PAUL, MN] – Governor Walz today announced that increased payment rates for child care assistance take effect this week, as Minnesota continues to move toward making child care accessible to more families.

"Affordable and accessible child care is essential to creating opportunity and economic growth across the state,” said Governor Walz. “We’re raising child care assistance rates to support providers and improve access for more families. This is an investment in our workforce, economy, and the well-being of families.”

“Bold and impactful child care investments like this are crucial to making Minnesota the best state for children and families,” said Lieutenant Governor Flanagan. “Our state’s current and future economy relies on child care providers every day and the important work they do to educate and care for our youngest Minnesotans. I’m proud to invest in the entire spectrum of child care from increasing access and affordability for families to ensuring our providers can make a living caring for our littlest Minnesotans.”

Higher reimbursement rates will bring state payments closer to market rates for child care providers serving over 11,000 families, including 23,000 children, through the Child Care Assistance Program. The increase will help stabilize providers’ finances and improve access to affordable child care for families.

Governor Walz and the Legislature approved the new child care assistance rates earlier this year, including $146 million in funding over the next two years. The change was part of a $1.3 billion child care package that also included payments to improve compensation for child care providers and funding to reduce wait lists for another type of child care assistance known as Basic Sliding Fee.

“Families should be able to get child care when they need it,” said Human Services Commissioner Jodi Harpstead. “It’s so important to their well-being and to our entire economy. The new child care assistance rates will help providers cover basic expenses that allow them to offer quality care.”

The Child Care Assistance Program provides financial assistance for child care to families with low incomes. When rates are low, child care providers are less likely to serve families in the program and access to child care suffers in an already tight market. Low rates also make it harder for providers who participate in the program to cover their costs.

The program’s rates are based on a grid that includes the county, the type of child care and the child’s age group. When the rate increase takes effect, maximum rates in the grid will increase to match the 75th percentile of market rates, as measured by a 2021 survey of child care rates. The state will adjust the rates every three years to reflect market rates, beginning in January 2025.