PREPARED BY: Mikayla Findlay
LB 304 DATE PREPARED: February 4, 2025
PHONE: 402-471-0062
Revision: 00
FISCAL NOTE
LEGISLATIVE FISCAL ANALYST ESTIMATE
ESTIMATE OF FISCAL IMPACT – STATE AGENCIES (See narrative for political subdivision estimates)
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS $10,743,449 $14,324,599
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS $10,743,449 $14,324,599
Any Fiscal Notes received from state agencies and political subdivisions are attached f ollowing the Legislative Fiscal Analyst Estimate.
This bill changes provisions of the Child Care Subsidy program, remov ing the October 1, 2026 sunset on the eligibility cap of 185% of
the Federal Poverty Level (FPL). The bill also removes the October 1, 2026 sunset on eligibility for transitional Child Care Subsidy of
200% FPL. Currently, the income cap wou ld revert to the threshold of 130% FPL for regular subsidy and 185% for transitional subsidy.
The Department of Health and Human Services (DHHS), the administering agency, cites internal data that a total of 4,858 families
qualified under expanded eligibility since August 2021 following the passage of LB485. DHHS indicates an average of 2,033 families
claim subsidy each month. The average monthly subsidy expense per family is $587.17 or $ 7,046.04 annual ly. Without accounting for
annual growth this amounts to $14,324,599 in increased aid expenditures. The FY26 impact represents 75% of the state fiscal year as
the agency is responsible for implementation of the expanded eligibility through the first quarter of FY26.
Unlike in previous fiscal years, D HHS does not have federal funds available to offset the added costs of maintaining the expanded
eligibility. In 2023, DHHS noted in the fiscal note for LB227, which most recently extended the expanded Child Care Subsidy eligibility
provisions : “if federal grant funding changes, general funds may be needed to cover a portion or the totality of this aid cost.” At this point
in time, expenses for the Child Care Subsidy program exceed the amount of federal funds available therefore any additional aid costs
would necessitate additional General Funds.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 30 4 AM: AGENCY/POLT. SUB: Nebraska Department of Health & Human Services
REVIEWED BY: Ann Linneman DATE: 2 -5-2025 PHONE: (402) 471-4180
COMMENTS: Concur with the Nebraska Department of Health and Human Services’ assessment of fiscal impact.
LB (1) 304 FISCAL NOTE 2025
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
State Agency or Political Subdivision Name:(2) Department of Health and Human Services
Prepared by: (3) John Meals Date Prepared 2-3-25 Phone: (5) 471-6719
FY 2025-2026 FY 2026-2027
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS $14,326,996 $14,326,996
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
$14,326,996 $0 $14,326,996 $0
Return by date specified or 72 hours prior to public hearing, whichever is earlier.
Explanation of Estimate:
LB304 changes the provisions relating to the Child Care Subsidy assistance. It removes the sunset date of October 1
st
,
2026, and extends it indefinitely while keeping the initial eligibility determination and transitional/ redetermination the same.
This bill does not require any further regulations updates.
With the enactment and implementation of LB485 in August 2021, which temporarily changed the C hild Care Subsidy
initial eligibility income limits from 130% Federal Poverty Level (FPL) to 185% FPL and the redetermination/transitional
eligibility income limits from 185% FPL to 200% FPL, the sunset date was scheduled to end October 1, 2023. However, in
2023, with the passing of LB227, the sun set date was extended to October 1
st
, 2026. LB304 proposes to remove that
sunset date which would leave the eligibility income limits as they are now.
Since the inception of LB485, 4,858 families have become eligible for child care subsidy with the expanded eligibility.
There has been an average of 2,033 families that have billed each month. The average monthly child care cost of each
newly eligible family is $587.17 per month. The annual cost of this is $14,326,996 assuming no annual growth.
The Department of Health and Human Services (DHHS) utilized American Rescue Plan Act (ARPA) fun ding to pay for the
increased costs for LB485 (2021) and LB227 (2023) through the expiration of that funding on September 30, 2024.
Current child care subsidy costs exceed the annual value of the child care grants. Since available federal funds are
already being utilized, state general funds will need to be appropriated to cover the cost of this program moving forward.
MAJOR OBJECTS OF EXPENDITURE
PERSONAL SERVICES:
NUMBER OF POSITIONS 2025-2026 2026-2027
POSITION TITLE 26-26 26-27 EXPENDITURES EXPENDITURES
Benefits...............................................................................................................................
Operating............................................................................................................................
Travel..................................................................................................................................
Capital Outlay.....................................................................................................................
Aid......................................................................................................................................
$14,326,996 $14,326,996
Capital Improvements.........................................................................................................
TOTAL............................................................................................................
$14,326,996 $14,326,996