Policy Resource

Colorado Reforms Child Care Subsidy Program

Sep 1, 2017

The Colorado legislature passed three bipartisan bills to reform the state’s child care subsidy program in May 2014. The bills aimed to increase the affordability of child care, ease burdens for working parents, and cut red tape for small business child care providers.

Specific changes to the program included:

  • reducing co-payment requirements for the most impoverished families,
  • increasing access to care by allowing contracting for subsidy slots,
  • expanding eligibility during 60-day job searches and to those participating in postsecondary education and workforce training,
  • increasing provider reimbursement rates, instituting tiered reimbursement for providers statewide, and
  • restructuring income eligibility so that working families can afford child care despite minor increases in wages, thus easing the cliff effect that discourages families from earning a higher salary.

Legislation was also passed that year to extend the state’s reimbursable child care expenses tax credit to families making less than $25,000 and increase funds for quality improvement grants for child care providers. The tax credit helps more than 35,000 Coloradans offset their child care expenses by more than $6 million each year. The legislature approved an extension of the tax credits when they were due to sunset in 2017.

Colorado has continued to make investments in its child care subsidy system since these reforms, by increasing investments in the program to institute reforms and increase reimbursement rates for providers.

Updated August 2017

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