New Data Point to Resilience in California’s Licensed Child Care System. How Do We Sustain Progress? Guest Commentary by Natalie Rivera and Rowena Kamo

Guest authors Natalie Rivera (left), research and policy associate at the California Child Care Resource & Referral Network, and Rowena Kamo (right) explore state and local trends in licensed child care supply and cost—and what they reveal about California’s early childhood system.

The California Child Care Resource & Referral Network (R&R Network) is excited to announce the release of our 14th biennial California Child Care Portfolio, with county- and state-level data available on KidsData.org. The portfolio tracks trends in licensed child care supply, demand, and cost, and provides data on family demographics, income, and expenses.

Key Findings

Data for 2023 show California’s licensed child care supply remains steady. Compared with 2021, the state recorded modest gains of:

• 139 licensed child care facilities
  • 60 child care centers
  • 79 family child care homes (FCCHs)
• 27,258 licensed child care spaces (3%)
  • 23,643 center spaces (3%)
  • 3,615 FCCH spaces (1%)

This two-year increase in FCCH capacity is the first since 2008, and the increase in center capacity is the largest since 2006. While this growth signals progress, the number of spaces statewide remains well below levels recorded prior to and during the Great Recession, underscoring the ongoing need for sustained investment and support for providers.

Changes in supply varied by region and county. At the local level, there were substantial shifts in licensed child care capacity between 2021 and 2023. Regionally, counties in the R&R Network’s Bay Area region experienced an overall increase in licensed spaces of 7%, while the North region saw a net decrease of 2%. Variation at the county level was even more dramatic; for instance:

• In the R&R South Region
  • San Bernardino: +14%
  • Imperial: -25%
• In the R&R Central Valley Region
  • Mariposa: +64%
  • Inyo: -39%
• In the R&R Bay Area Region
  • Santa Clara: +15%
  • Napa: -5%
• In the R&R North Region
  • Glenn: +33%
  • Modoc: -45%

Policy Priorities

Continued investments in child care systems are critical to supporting California’s working families and ensuring the stability and growth of child care programs. Program and policy options include: 

Paying providers fairly. In California, the median cost of licensed FCCH care in 2022 was $1,232 per month for an infant and $969 per month for a preschooler. This means an FCCH provider caring for three infants and three preschoolers on average earned approximately $6,600 per month in gross income—more than $1,000 lower than the state’s median household income—before accounting for any business expenses.

A key step toward protecting the current supply of licensed child care is minimizing the financial strain on providers who are operating at a loss. One way the state can assist is to reform its subsidized child care reimbursement rate structure to one that reflects the true cost of care. Current reimbursement rates are based on regional market rates, or the price that a consumer is willing to pay, which may not accurately represent the actual cost of providing child care.

California also can permanently adopt a payment system based on enrollment rather than attendance. The overhead costs of running a child care business remain constant regardless of daily attendance, and providers need predictable, stable revenue to plan and sustain their operations.

Ensuring all families have access to affordable child care. Only around one in four California children with working parents had access to a licensed child care space in 2023. And availability is only part of the equation. Spending on child care represents a substantial share of the household budget for many families—in some cases on par with housing expenses. A universal child care system could ensure that affordable child care is available to every family who needs or wants it, providing crucial support for children’s development and for parents’ ability to work, pursue an education, or participate in training opportunities.

Protecting federal and state investments in child care. Funding from Head Start, TANF/CalWORKs, and the Child Care and Development Block Grant, among other sources, sustains California’s child care programs. Loss of federal funds into the state’s early childhood system means less availability of child care and more children and families in need of assistance.

Providers also rely on public assistance programs, such as SNAP/CalFresh for food assistance and Medicaid/Medi-Cal for health insurance. Cuts to these programs deepen providers’ economic insecurity, further threatening the stability and well-being of our state’s early childhood education workforce.

Visit the R&R Network’s site for more policy ideas and child care resources.

Posted by kidsdata.org

This entry was posted on Thursday, May 29th, 2025 at 12:23 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.