In Jan. 31 st testimony delivered to the New York State Joint Legislative Hearing on Human Services for the 2024-24 Executive Budget, Lauren Melodia, deputy director of economic and fiscal policies at the Center for New York City Affairs (CNYCA), urged lawmakers to raise compensation for childcare providers and workers. She cited the low wages of these workers and providers as a continued source of the decline in the state’s licensed and regulated childcare supply. As a result, the state cannot meet a growing demand resulting from recent policy achievements expanding eligibility to more families for the State’s Child Care Assistance Program (CCAP).

Melodia suggested that this year’s State budget must include long-term and immediate measures to address child care supply shortages. Their goal will be boosting wages in one of the lowest-paid occupations, where workers are leaving for jobs in retail and fast food where there are higher wages. The long-term solution is for the State to pass legislation to develop an alternative methodology for CCAP reimbursement to child care programs – one that’s not based on a flawed market but on the cost of care, and that includes competitive wages. Establishing a new methodology requires a multi-year federal approval process; therefore, it will not resolve the immediate crisis. Therefore, the Legislature’s budget also should expand on the workforce compensation fund included in last year’s budget and make it a permanent feature of the State budget until a new methodology with a wage floor is implemented.

Melodia’s testimony drew on CNYCA’s latest report “New York’s 2024 Economic and Budget Outlook: Post-Pandemic Reckoning for the City and the State.” That report highlighted the State’s $22 billion in reserves, which can be drawn on to fund the workforce compensation fund while the State develops a new reimbursement methodology and plan to finance it.