Chapter 1289 of the 2020 Acts of Assembly, Item 145 C.14.h, directs the Virginia Department of Education (VDOE) to develop a plan to determine the magnitude of the gap between regional prevailing child care market rates and the Virginia Preschool Initiative per pupil amount. The specific language is as follows:

"3) The Department of Education shall develop a plan to determine the magnitude of the gap between regional prevailing child care market rates and the Virginia Preschool Initiative per pupil amount. The Department shall establish a schedule designating the amount of the add-on grants for each school division for fiscal year 20222023. The amount of the add-on grant plus the Virginia Preschool Initiative per pupil amount shall not exceed prevailing child care market rates in a particular region. The Department shall report on the established schedule to the Chairs of the House Appropriations and Senate Finance and Appropriations Committees by December 1, 2020September 30, 2021."

In October 2020, the Virginia Department of Education received a waiver to extend the deadline for this report to September 30, 2021 as a result of the COVID 19 pandemic and related impacts on child care market rates.

The following report includes a summary of the information available as of June 2021. The child care industry has been significantly impacted by the pandemic, causing extraordinary volatility in the child care market, both in the Commonwealth and across the country. As a result, the Department recommends continuing to use the same rates for the add-on grants until the market is less volatile and more stable. A summary is available in the following sections, as well as a proposal for the future timeline for considering an adjustment to the add-on grants for each school division.