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How is CCCAP Figured?

https://docs.google.com/document/d/1yPyNaEtiCln5aOZIF1gGcXRp-rn8fcHB/edit?usp=sharing&ouid=102507436041222834668&rtpof=true&sd=true


Colorado Child Care Assistance Program

Allocation Methodology Recommendations

SFY-2022-23

From the Child Care Assistance Program Allocation Task Group

==============================================================


The base formula for allocating the CCCAP appropriation to counties is prescribed by statute (C.R.S. 26-2-804) with six possible adjustment factors that the Department may apply on a statewide basis and in compliance with State Board rule. Lastly, there are a set of mitigating factors authorized by rule that are intended to smooth the transition ­­­from the old formula to the new.


Base Calculation


C.R.S. 26-2-804 - Statute states that available funds be distributed to counties based on their proportionate share of “eligible population” times the “appropriate reimbursement rate.”


The CCCAP Allocation Task Group is recommending that the ceiling mitigating factor be changed to 50%, the floor mitigating factor be changed to 10% for all counties, and that both the parental fee factor and low-income mitigating factor remain unchanged from SFY21-22. The data used to calculate the allocations is the most current date available to the committee.


The eligible population for each county was estimated as follows:


1. Identified entry-level income eligibility ceiling for each county based on the 2020 Self-Sufficiency Standard (SSS), excluding child care costs, and the equivalent 2020 federal poverty level (FPL) Guidelines. The applicable entry-level income eligibility ceilings are:

a. 185% FPL for counties with an SSS below 205%;

b. 225% FPL for counties with an SSS between 205% and 245%; and

c. 265% FPL for counties with an SSS above 245%.

2. Estimated the total percent of the county population of children under age 6 and ages 6-11 that are income-eligible. (Source: ACS B17024 2019 5-yr estimates)

3. Applied the percentages from Step 2 to the detailed estimates of county population by age. (Source: ACS B09001 2019 5-yr estimates)

4. Apportioned the population from Census-specific age groups into CCCAP- compatible age groups.



The appropriate reimbursement rate was determined in the following way:


1. Calculated the licensed child care capacity for each county, disaggregated by license type and quality level.

2. Apportioned the estimated eligible population in each CCAP-compatible age group based on the applicable share of licensed capacity within each Type/Quality category (the final formula will use data through April 2022).

3. Assigned each group of eligible children the appropriate state-established reimbursement rate based on the characteristics of their Type/Age/Quality grouping.


The estimated count of eligible children is multiplied by the associated provider reimbursement rate (provider type/child age/quality level) in each county, and those products are summed by county. These results are converted to equate to the “percent of state” for each county, in order to derive the dollar amount initially connected to each county out of the total available funds.


Adjustment Factors


Statute and the State Board Rules permit the State to incorporate statewide adjustments to the formula, based on six specified influences or conditions. For FY 2021-22, the CCCAP Allocation Task Group assumed that three of those adjustment factors were considered already incorporated in the base calculation: cost of living, cost of high-quality early childhood programs and cost of programs. The FY 2021-22 allocation did not include three additional permitted factors in the formula, as it was concluded that there was not current need for these factors. These additional factors are: regional market rates for CCCAP, drastic economic changes, and geographic differences within a county.


For FY 2022-23, the CCCAP Allocation Task Force is recommending that the “Parental Fee Adjustment” continue to be included as a part of the cost of programs adjustment. This adjustment attempts to account for the impact of family income and the related parental fee on county costs. The basic assumption is that the parental fee increases for program participants with higher family incomes, and the relative cost burden for a county serving families with these relatively higher incomes is a bit lower than serving families on the lower end of the eligible income scale for the program. Although the parental fee structure changed for FY 2021-22, the committee does not recommend changes to the structure of the parental fee adjustment.


The parental fee adjustment was calculated as follows:

  1. Calculate cost of care

  2. The purpose of this calculation is to find the estimated annual cost of care for each county.

  3. This is calculated by multiplying the daily rate (by provider type, provider quality level and age) times the eligible population times the days of service (assumes full-time, 260 days for all children)


  1. Calculate parental fee adjustment

  2. The purpose of this adjustment is to calculate the estimated annual amount of parental fees for each county, and subtract this amount from the estimated annual cost of care for each county

  3. The estimated annual parental fee for each county is calculated by:

  4. Using the parental fee schedule from FY 2020-21 and FPL to estimate statewide annual parental fee for the following income brackets:

  5. 0-100% FPL

  6. 100-150% FPL

  7. 150-185% FPL

  8. 185-225% FPL

  9. 225-265% FPL

  10. Weighting the statewide annual parental fee based on each county’s own eligible population income brackets.

  11. The estimated annual parental fee is then multiplied by the eligible population for each county to determine the estimated annual amount of parental fees by county.

  12. Calculate the adjusted county cost of care by subtracting the estimated annual parental fee amount for each county from the estimated cost of care for each county.

  13. Adjust the allocation from the Base Calculation to be proportional to the adjusted county cost of care.

Mitigating Factors


The FY 2021-22 allocation formula included three mitigatingfactors with the intent of managing and smoothing the changes in allocation amounts from the old formula toward the results of the new formula. These adjustments have been authorized through rule.


The CCCAP Allocation Task Group recommends continuing use of these three mitigating factors.


High Poverty Adjustment:

● This adjustment is an additional cost factor is added to the county’s allocation result, which is equal to the incremental amount the county would have received if all of its eligible child population were paid at the highest, county-specific reimbursement rate.

● For FY 2021-22, this adjustment was applied to counties with more than 60% of total child population income eligible for CCCAP.

● For FY 2022-23, the recommendation is that this adjustment remain the same.

Floor Adjustment:

● For FY 2021-22, this included a 10% floor for counties projected to expend more than 85% of FY 2019-20 allocation and a 20% floor for counties projected to expend less than 85% of FY 2020-21 allocation.

● For FY 2022-23, the CCCAP Allocation Task Force is recommending that there be a 10% floor for all counties regardless of expenditures.

Ceiling Adjustment:

● For FY 2021-22, this included a 40% ceiling for counties projected to expend more than 75% of FY 2019-20 allocation and a 15% ceiling for counties projected to expend less than 75% of FY 2020-21 allocation.

● For FY 2022-23, the recommendation is that the ceiling will change to 50% for all counties regardless of expenditures.


In summary, the CCCAP Allocation Task Group recommends:

· Continuation of the CCCAP Allocation Methodology, using the same base calculation with refreshed data, including updated provider rates

· Continuation of a “Cost of Programs” factor to reflect the impact on county cost of parental fees, using the same calculation with refreshed data

· Continuation of the Mitigating Factors, with the changes detailed above



Stimulus Funding


For FY 2022-23, the CCCAP Allocation Task Force is recommending that the stimulus funds of $19,886,638 be allocated using the SFY22-23 base allocation percentage for each county, as recommended above.

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