A $44 million federal grant, aimed at improving child care quality in New Jersey by implementing a public rating system, is set to run dry by the end of 2017.

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A study released Wednesday finds that while the financial boost helped child care centers make improvements, many centers would face enormous challenges maintaining these improvements and living up to higher standards unless the state steps in.

According to Advocates for Children of New Jersey, typical child care centers that depend on state subsidies for a quarter of their children, would actually lose some of their revenue — up to 21 percent — after working to reach an average-to-high rating with Grow NJ Kids, New Jersey's Quality Rating Improvement System.

Maintaining a higher rating is accompanied by costs, said ACNJ president Cecilia Zalkind, and despite those added expenses, subsidies from the state per student would not change.

"It's ludicrous to think that programs can do this without additional funding," Zalkind told New Jersey 101.5. "While there's some additional money up front for one-time costs ... there's not enough in the system to sustain that quality."

The state child care reimbursement rate has not changed over the past nine years, the ACNJ report noted. And the amount centers are reimbursed for low-income children is far less than the standard cost of tuition.

For a center to break even at "Level 3" of the quality scale, the infant reimbursement rate would need to jump more than 100 percent, the report found. The toddler reimbursement rate, which is currently the same as the infant's, would need to increase $80, and preschool reimbursement would need a $49 boost.

"While the goal of improving quality is a good one, we need to support it," Zalkind said.

The report calls on the state to increase the child care subsidy reimbursement rate to reflect the true cost of delivering high quality care, as well as create a multi-tiered reimbursement system that could motivate providers to move up the quality ladder. ACNJ also suggested legislators create a tax credit that would reward child care centers for maintaining quality.

The federal Race to the Top grant received in 2013 is expected to reach about 1,800 child care sites by the end of 2017. As of December 2016, more than 1,100 centers were participating in Grow NJ Kids.

The system will eventually serve as a database for parents interested in browsing the quality grades of nearby child care centers.

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Contact reporter Dino Flammia at dino.flammia@townsquaremedia.com.

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