49 | P a g e
FFY 2025–2027 CCDF State Plan
setting and geographic location, and meeting state regulations and program standards,
allowing the Lead Agency to consider each of these variables from a current and potential
expense perspective using a cost estimation model tool. The alternative methodology
approach includes engagement with constituents and programs to guide decisions for the
cost study and input on how the cost model functions. While a narrow cost analysis can
estimate the current costs of operating a child care program meeting all legal
requirements, it does not capture the true cost of child care, and all of the expenses
necessary to operate a program that fully meets the needs of children, families, and the
child care workforce. Nevada's alternative methodology approach includes analysis of
both revenue and expenses, providing insight into the extent to which current revenues
can support expenses under different scenarios including those which go beyond only
current expense data. This alternative methodology model is designed to determine costs
across the following variables: level of quality, age of child, type of care setting,
geographic location and allows the Lead Agency to consider each of these variables from a
current and potential expense perspective, using a cost estimation model tool. The cost
model will include compensation levels above the current compensation levels paid to
child care providers in Nevada. Data from extant sources, such as the Bureau of Labor
Statistics, combined with primary data from provider data collection will inform model
inputs related to current compensation levels. To estimate the true cost of care, additional
compensation levels are being included based on feedback from provider engagement,
review of additional extant sources, and input from Nevada’s Early Childhood Advisory
Council (ECAC) and the Nevada Cost of Quality Technical Workgroup. A research-based
living wage or self-sufficiency calculator was utilized to identify a higher salary level, to
address the depressed wages based on the current market rate methodology, and health
insurance estimates were drawn from the Kaiser Family Foundation data on employer
contributions to health insurance. The cost estimation model will allow Nevada's child
care stakeholders to better understand the actual cost of providing child care in Nevada,
including how several revenue and expense variables and program characteristics impact
that cost (e.g., program type, program size, current quality standards, age range of
children served, and the wide variety of child populations served). By using cost
estimation models, the alternative methodology approach is more robust than a narrow
cost analysis alone; the data from the cost study is built into the cost estimation tool,
allowing the Lead Agency to understand the cost of services for different ages of children,
across program types, and at different regulatory requirements, compared to current and
proposed subsidy rates. In addition to being more than just about costs, the proposed
alternative methodology with a cost model includes the ability to compare scenarios that
include the receipt of child care scholarships and other forms of revenue. This feature of
the cost model, unlike a narrow cost study or analysis alone, will allow the Lead Agency to
run scenarios with increasing rates, increasing quality standards, and other metrics to
understand the impact of these potential policy choices on program operations, thus
providing a valuable tool that can inform decision-making for rate-setting implementation.
b. In the Lead Agency’s analysis, were there any relevant variations by geographic location,
category of provider, or age of child? For the current rates set using the 2022 MRS: Yes.
There are variations by geographical area, provider type, and age of child. Overall, the cost
of care in urban areas exceeds the cost in rural areas, centers exceed family child care,
and infant care exceeds the cost of care for older children. Generally, across all provider
types, the cost of care decreases as the age of children increases with center-based infant