CDC PROGRAM REIMBURSEMENT S.B. 311:
SUMMARY OF BILL
REPORTED FROM COMMITTEE
Senate Bill 311 (as reported without amendment)
Sponsor: Senator Rosemary Bayer
Committee: Housing and Human Services
CDC PROGRAM REIMBURSEMENT S.B. 311:
SUMMARY OF BILL
REPORTED FROM COMMITTEE
Senate Bill 311 (as reported without amendment)
Sponsor: Senator Rosemary Bayer
Committee: Housing and Human Services
CONTENT
The bill would enact a new law to require reimbursements made to a child care provider under
the Child Development and Care Program (Program) to be adjusted for inflation annually using
the Detroit-Warren-Dearborn Consumer Price Index (CPI), beginning on the bill's effective date.
According to testimony, Michigan's child care industry is struggling, and some believe that the State is not doing enough to address the needs of working parents and childcare providers. Reportedly, 14% of family members have left the workforce to take care of their children due to the cost of child care. Requiring reimbursements rates made to Program child care providers to be adjusted by the CPI would enable providers to employ staff at adjusted wages while allowing families access to child care that they can afford.
Legislative Analyst: Jessica Gebbie
FISCAL IMPACT
The bill would have an indeterminate fiscal impact on the State at a rate determined by the CPI. It is unclear how the adjustment required under the bill would be implemented. For example, the bill does not indicate if the value of the CPI used in the adjustment should be determined on an annual average or an end-of-period basis or whether it should be based on a calendar year, fiscal year, or some other period. The bill also does not indicate whether the annual adjustments would have to occur on a calendar year or fiscal year basis.
In the current fiscal year (fiscal year 2025-26), the State’s appropriation for the Program is $543.3 million, of which $380.8 million in spending comes from Federal assistance and the remaining $162.5 million comes from the State’s General Fund. Consumer price indexes can increase or decrease from year to year, though they most often go up from one to five percentage points per year. The Detroit-Warren-Dearborn index, with its current version established in 1984, averages an annual increase of 2.64% per year. At that rate, the annual increase in child care spending required under the bill would be $14.3 million in the first year, $14.7 million in the second, $15.1 million in the third, etc. The increased appropriations for these adjustments likely would come from the General Fund, as currently the State is maximizing its usage of Federal funds for childcare. Indirect fiscal impacts could include a more stable child care marketplace statewide, which also could have a positive impact on the child care workforce and on income tax revenues from working parents. These impacts are indeterminate.
Date Completed: 4-7-26 Fiscal Analyst: Michael Siracuse
floor\sb311 Bill Analysis @ www.senate.michigan.gov/sfa
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.