Nebraska Child Care Cost Model

What is a child care cost model?

Child care cost models are tools for showing how the expense of delivering child care services relates to the actual revenues earned by child care providers. Cost models enable users to experiment with different child care scenarios to better understand how regulations and the economy do or do not contribute to the sustainability of child care programs.

Cost models have helped other states shape policies regarding child care subsidy, program quality and improvement systems, professional development for child care providers and other issues. Although cost models can tell us much about how child care programs operate, the Nebraska Child Care Cost Model is not a business planning resource for providers. Rather, its purpose is to:

• Help policymakers make better legislative and administrative decisions to ensure child care providers are compensated fairly, prepared for the professional demands of child care and have the necessary resources to operate successful programs.
• Equip early childhood advocates to educate and engage decision makers in the public and private sectors about policy issues affecting child care providers throughout the state.

About the Nebraska Child Care Cost Model

The Nebraska Child Care Cost Model was made possible through funding from Nebraska’s Preschool Development Grant (PDG). It is a project of the Shared Leadership and Financing (SL&F) Task Force and was developed by Prenatal to Five Fiscal Strategies (P5FS), national experts in child care cost model systems.

P5FS worked closely with state agencies and experts to build a model that reflects Nebraska’s current statutes and regulations. P5FS and First Five Nebraska consulted with child care providers across the state who shared their input on the costs associated with delivering high-quality child care.

How the cost model works

The Nebraska Child Care Cost Model is a Microsoft Excel-based tool that has separate tabs for Child Care Centers (CCC) and Family Child Care Homes (FCCH). The cost model spreadsheet is divided into two separate sections for each of these program types:

• Inputs: This section of the cost model allows users to enter information about a child care program’s structure, staffing, enrollment and other characteristics.
• Results/Outputs: Based on the specific program information entered in the Inputs section, the cost model calculates and displays the costs of delivering child care for a specific provider.

Users can experiment with multiple variations on a cost model scenario by making modifications to the number and age of children served, professional development supports, level of staff compensation and other variables. With each change in the inputs, the cost model will recalculate whether program revenues are sufficient to cover operational costs and generate graphs to visualize this data for easy reference.

Cost model calculations are based on current state-level data and statute/regulations. This tool will be updated on an ongoing basis to reflect changes in the child care environment in Nebraska.