For families with young children, finding affordable, dependable childcare can be a challenge, particularly in rural communities where options may already be limited. For the people providing that care, keeping nutritious meals on the table comes with its own financial challenges.
Nebraska lawmakers are asking Congress to address one of those challenges by changing how home-based childcare providers are reimbursed for the meals and snacks they serve.
Legislative Resolution 296, introduced by State Senator Bob Hallstrom, was adopted by the Nebraska Legislature on April 9 with 43 senators voting in favor and none opposed. The resolution urges Congress to change the federal Child and Adult Care Food Program (CACFP) so that participating family childcare homes receive equal reimbursement rates for meals, regardless of their location or income classification.
The CACFP is a federally funded program that helps childcare providers cover some of the cost of serving nutritious meals and snacks to children in their care. Participating providers must follow federal nutritional guidelines and maintain records of the meals they serve.
Currently, family childcare homes are divided into two categories, known as Tier I and Tier II. These classifications determine how much money a provider receives for each qualifying meal or snack.
Tier I providers receive the higher reimbursement rate. A childcare home can qualify for Tier I if it is located in a designated low-income area, generally determined by school meal eligibility or census data, or if the provider’s own household meets certain income requirements.
Tier II providers receive a lower reimbursement rate because their childcare home does not meet those geographic or household income requirements. However, they can still receive the higher Tier I rate for meals served to individual children whose families qualify based on income.
Importantly, the tiers have nothing to do with the quality of childcare or the meals being served. Both groups must meet the same federal nutritional requirements.
The financial difference can be significant.
Under USDA reimbursement rates effective July 1, 2026, a Tier I provider receives $3.31 for an eligible lunch or supper, while the standard Tier II rate is $1.99. For breakfast, the rates are $1.74 and 62 cents, respectively. Snacks are reimbursed at 98 cents for Tier I and 27 cents for Tier II.
Consider two childcare providers living just a few miles apart. Both care for six children, prepare the same nutritious lunches and purchase groceries at the same store. One qualifies for Tier I because of the income characteristics of the area where the childcare home is located. The other does not.
For six lunches, the Tier I provider would receive $19.86 in reimbursement, while the Tier II provider would receive $11.94 at the standard rate. That is a difference of $7.92 for the same number of meals, assuming none of the Tier II provider’s children qualify individually for the higher rate.
Over time, those differences can add up, particularly for small childcare businesses operating on limited budgets.
Supporters of LR296 argue that the current system creates financial disparities among providers who face similar grocery expenses and must meet identical federal nutrition standards.
The resolution asks Congress to eliminate that difference by establishing a single reimbursement rate for all participating family childcare homes. It also calls for additional meal and snack reimbursement assistance, similar to temporary federal support provided through the Keep Kids Fed Act of 2022.
The issue is particularly relevant in rural Nebraska, where home-based childcare can be an important option for working families. Providers in smaller communities may care for fewer children, have limited opportunities to spread operating expenses and face the same rising food costs as providers in larger cities.
Clay County is among the counties served by organizations that help family childcare homes participate in the federal food program. According to the Nebraska Department of Education, Family Service Lincoln and Provider’s Network Inc. both serve Clay County, although the number of participating childcare homes within the county has not been confirmed.
Statewide, the National CACFP Association’s 2026 report identifies 943 participating Tier I family childcare homes and 284 Tier II homes in Nebraska.
The proposed changes would require action at the federal level. Although LR296 received unanimous support among senators voting, it does not change existing reimbursement rates or provide additional funding. As a legislative memorial, it formally communicates Nebraska lawmakers’ request to Congress.
For childcare providers, the issue comes down to the cost of putting nutritious food on the table. For families, it is part of the larger challenge of maintaining access to affordable, dependable childcare.
Whether Congress will act on the request remains uncertain. For now, Nebraska lawmakers have formally asked federal officials to reconsider a system in which two childcare providers can serve the same meals, follow the same rules and receive different amounts of financial assistance.
