Background and Overview
The New Mexico Early Childhood Education and Care Department (ECECD) is working with Prenatal to Five Fiscal Strategies (P5FS) to update the cost estimation model used to inform child care subsidy rates. This process, known as the 'alternative methodology', gathers financial and programmatic data from child care providers to inform the child care cost model. This cost model can help better understand how much it costs to deliver early care and education that meets state standards and compensates the workforce sufficiently. New Mexico was the first state in the nation to use this approach to setting subsidy rates rather than basing them on market prices.
For more information about the study, click below.
New Mexico's alternative methodology is following the process established by P5FS and sucessfully implemented in other states who have used a cost model to inform CCDF subsidy rate setting. The process includes five steps, as detailed in this graphic.
More information will be posted on this page soon. There will be opportunities for child care providers to participate in the study and ensure their voice is heard as part of this important change to how subsidy rates will be determined. Stay tuned!
What is alternative methodology?
The term 'alternative methodology' is used to describe an approach to informing subsidy rate setting under the Child Care and Development Block Grant. Historically, market prices (tuition rates) have been used to inform subsidy rates, but the alternative methodology approach uses a cost estimation model or cost study. For more information on this approach see the one pager linked below.