State-by-State Map on Local Impact of Child Care Funding Cliff

WBRC: Status of Childcare 2023 Report outlines challenges day care, early childhood education providers are experiencing in Ala.

…Many of the centers have been receiving federal dollars to supplement their workers to help stabilize their operations during the pandemic.

Delyne Hicks says, “When we were receiving the funding, we were able to step up and we were meeting those high quality teacher-student ratios.”

That funding expired at the end of September, and now these childcare centers are competing to keep their workers, who can easily get higher pay at fast food restaurants

…Lakesha Petty, Director and Owner of Pamper Me Nursery, told us she’s had to cut back on hours for some infant care because it’s become so difficult to hire quality staff members. It’s the same story with a number of childcare providers.

[Pulled from video transcript] Delyne Hicks: As our program this year as that funding was cut and is going away, we’ve had to raise our rates just a little bit to be able to see if we can’t keep that quality staff.

Families across Alabama face escalating costs for daycare and a shortage of options. Federal pandemic dollars are no longer coming in to help support the industry…“I just got a call from one program that had to close a classroom with five teachers out,” remarked Joan Wright, Executive Director at Childcare Resources in Birmingham.

She explained other daycares are cutting back on hours, closing at four in the afternoon because they don’t have enough staff. Parents are paying much more than they did before COVID. “Some rates have jumped 50-60 percent,” said Wright. Infant care is up to $200-$250 a week.

In the last three years, 133 child care programs in Alaska have closed, including 34 in the past six months, according to Berglund. Just 62 new facilities have opened since early 2020 — a net loss.

Anchorage high school teacher Nora Matell’s child care bill for her two young children in September increased by nearly $1,000 compared to her August bill. With that increase, Matell said child care will now account for half of her yearly income: nearly $3,600 per month for full-time care.

Hillcrest’s director, Christina Eubanks, attributed the 23% fee hike last month — which shakes out to about $400 more per child — to the end of the federal funding. She said its loss has already felt like “a Band-Aid being ripped off.”

“Child care businesses used those relief funds to just limp along,” said Blue Shibler, executive director of Juneau’s Southeast Alaska Association for the Education of Young Children. “Now that they’re gone, all the challenges child care businesses faced before the pandemic are even worse now.”

…Her financial planning has somewhat insulated her from the funding cliff, she says, as she’s been banking on the funds disappearing as scheduled in Summer 2024. Enrollment has recovered since the pandemic, and she has opened a new child care center, made possible in part by the federal funding.

Uncertainty about future funding has caused her to forgo certain quality improvements such as replacing her aging diaper-changing tables and bonuses and salary increases for her staff.

The impact is greater for Thames, the owner of Beautiful Oasis Childcare.

She says the majority of students she serves qualify for low-income tuition subsidies, and her enrollment has fallen to around half of its pre-pandemic level. Taken together, she estimates that a whopping 85 or 90% of her revenues come from government dollars. She already charges in the ballpark of $300-500 per student per week, and says she’d have no choice but to raise those costs further if her revenues continue to dry up. That would likely make it harder for low-income families to afford her services, she says, especially if subsidies for that population take a hit, as is expected without federal action.

Beth Brantley is the owner of Bright Ideas Childcare in Tempe, one of many pre-schools and early childhood development centers that will be increasing their prices after federal funding to help the child care industry comes to an end. “We’re going to be forced to raise our rates, and with that, parents are going to have to choose: can they afford to go to work? Can they afford to stay home?” said Brantley. “This is going to happen in most households that have early childhood care.”

…The profit margin at the end of this year at Child’s Path is projected to be 0.2%. That will come out to a $6,000 gain from a $3.9 million operating budget which factors in a fundraising goal of $1.6 million this year, she said.

“Our actual existence depends on raising money from outside sources,” she said.

The fundraising target is up from $1.2 million last year to help replace $576,000 received from the federal stabilization program for the past two years.

“Leaders of the nonprofit that manages foster care throughout Central Florida have told the state they are in the midst of a “financial emergency” that will cause the organization to run out of money in the coming months, leaving it unable to serve the neediest children in its care.

Though board members of Embrace Families Community Based Care are giving the required six months notice to end the organization’s contract with the Department of Children and Families, they are also warning the state that they will deplete the nonprofit’s funding “much earlier than that date.”

Read more here.

The Atlanta Journal-Constitution: Georgia teetering on the edge of the ‘child care cliff’

…Erica Brantley Gwyn, who runs the Seven Oaks Academy in Lilburn, has already warned parents of 40 children that they could see a painful spike in tuition.mEven with more money, she’s worried that she won’t find enough teachers.

“The focus of that (ARPA) grant … was for us to increase salaries” and hire more teachers, she said. “So, we’ve done that, but now we’ve been left to hang dry.”

Atlanta-based Quality Care for Children, which supports child care providers and their families, surveyed area centers before the subsidy ended. Ellyn Cochran, the group’s president and CEO, said more than 80% of the area’s centers would probably raise rates — if only to keep their staffs now that many big employers have upped the ante on pay, she said. “You can’t go back to paying folks $12 an hour.”

… The child care program offered by the Mahaska County YMCA is planning to turn to its community donors, YMCA members and participating families to help fill in the funding gap left by the approximately $500,000 in COVID relief money that it received during the 2021-2022 fiscal year.

“That’s the plan, is to ask our community to support the child care needs at a higher rate,” says Mahaska County YMCA CEO Barry Martin. “And that’s the voluntary donations, not federal funds, state funds, whatever. That’s us going to our community and saying ‘We have a need, we can’t afford to pay what we need. We can’t afford to keep child care running at a loss. We need your help to bridge that gap between what we’re subsidizing and what it actually costs us.’”

… COVID relief money, when it was available, was partially used to fund payroll. Now its absence is adding another wrinkle. Martin says that the center has experienced difficulties retaining workers, losing quality staff to higher-paying jobs outside of the child care industry.

…“Our childcare industry is on a cascading decline,” said Paula Neth, President and CEO of The Family Conservancy. “It was at a breaking point before the pandemic. But I think the pandemic really highlighted how fragile the system is.”

.. The nonprofit created a dashboard to track data like the price of child care and the number of available slots in the metropolitan area. It shows the region lost 13 percent of its supply after the summer.

… In August, after eight years in business, Miss Jordyn’s Child Care and Preschool in Caribou shut its doors for good. Federal pandemic funding had kept the child, summer and after-school care operation afloat for a while, but the money ran out last month, sending families scrambling to find care for their children.

“Fatima Whitmore is the lead teacher at Tender Tots, a family-provided child care center in Baltimore County. She says three out of eight families dropped out of the program after pandemic-era aid expired because they could no longer afford the $250 weekly tuition.

“And it’s not because they’re at a bar or bowling. They really have to get gas; they really needed groceries,” Whitmore said.

…Without full enrollment and full tuition, Tender Tots is being forced to cut expenses. “What we offer the children didn’t change, although the enrollment dropped. We still have to prepare meals, we still give them one on one learning time,” Whitmore said. “So, maybe we can’t have hot meals every day, we may have to turn to cereal. It’s just a balancing budget plan we do weekly.”

The center stopped paying for cable, and had to lay off the only other employee helping Whitmore and the director.

…Roberts-King said the center is working to find other partners and funding sources to fill the American Rescue Plan gap.“

When one budget line goes down, then another budget line has to be picked up,” she said. “And what we’re trying to do is partner with anyone who we can to help get money to families to afford the best quality care for their children.”

… But providers said the child care industry is so broken that it requires a more permanent funnel of government money that goes directly to providers, such as the Commonwealth Cares for Children (C3) grants that came through during COVID.

The American Rescue Plan and other COVID funds funneled more than $600 million directly to child-care centers using a formula that accounted for staffing levels and community demographics. It helped keep businesses afloat amid fiscal freefall.

… Now, providers said, the coming end of the C3 grants means centers from Granby to Chelsea will likely have to hike tuition to cover overhead expenses, including rent, insurance, and supplies. Teachers — already paid no more than $46,000 annually — will likely have to soldier on without wage increases or leave the industry out of necessity.

Some centers fear they will have to accept fewer children from low-income families, whose government subsidies do not cover the full cost of care.

Others warn they may be forced to close.

…But the field trips are coming to an end. Since all of the children at Sent Loves for Kids receive subsidized funding from Michigan Department of Health and Human Services, the facility also was receiving extra early childhood funding from the American Rescue Plan Act (ARPA), funding which ended on September 30.

“It is going to impact sponsoring the field trips or just the extras like that,” Johnson-Smith said. “We might do pizza day and different stuff, but I’m trying to keep it as small as possible. I have to budget to afford to pay the teachers … because I have to have a certain amount of teachers. It’d be either that or I have to cut my [number of] kids down. A lot of these parents are reliant on daycare because they have no family members to take care of them during the hours they need or when they can pull some extra hours to get that extra money.”

…“While we have sufficient funding in order to maintain our entrance eligibility rate at 200% of the federal poverty level (which is about $60,000 for a family of four), we didn’t have the ability to do that as well as maintain the higher reimbursement rates that we have been paying to providers to provide care,” Richards says. The result will be a decline in reimbursements to providers.

As many child care centers across the country face possible closure after American Rescue Plan funding expired this fall, Minnesota stood out in this sector as state-allocated funds came online to compensate. But child care advocates and businesses say there’s a ways to go before early child care programs can be accessible and affordable to all families.

In anticipation of the expiration of federal funding, the state legislature approved $1.3 billion in child care funding in its last session. With this funding, Minnesota launched its Great Start Compensation Support Program, allocating $316 million to child care providers to increase employee compensation and benefits. The program started shortly after Child Care Stabilization Grants through the American Rescue Plan came to an end on September 30.

For Kristen Denzer, CEO and founder of Tierra Encantada, the state grant program means she can increase employee compensation. But she told TCB, this only helps solve one piece of the puzzle.

…While a K-12 classroom will often have one teacher to every 30 students, an early child care classroom can only have four babies per adult, seven toddlers per adult, and 10 preschoolers per adult, she said. With this kind of staffing need, there isn’t enough public money to cover that cost. “So we’re asking parents to pay the bulk of the money at a time when they are making the least amount of money,” Keller said.

The state funding passed this year includes the $316 million in monthly grants to child care facilities in 2024 and 2025, and $260 million over every two years that follow. Think Small, the Twin Cities nonprofit dedicated to child care, advocated for the funding passed this year.

“But, even with (the legislation), we still have significant gaps,” Keller said. “I’m not going to sugarcoat it — this is basically putting a band-aid on a gaping wound… So we’re kind of keeping the lights on, but we’re just barely doing that.”

Mary Crockett-Smith has spent three decades taking care of children. Now the owner of two early child care facilities in the St. Louis Metro area is worried about paying her bills.

Her facilities benefited from federal pandemic-era funding that acted as a lifeline for providers and parents struggling in the throes of COVID-19. That expired at the end of September. Missouri’s additional funding for early childhood subsidies have not gone as far as she hoped, and she worries she may have to let go of staff and cut hours to stay open.

…For Crockett-Smith, this means her two locations are going to lose thousands of dollars each month.

“Payroll is running about, for both schools, about $62,000 … cut $12,000 off it, how are we going to make it?” she said

Read more here.

KTVH: Lawmakers get update on challenges facing Montana’s childcare system

Across Montana, leaders say there’s a big gap between the demand for childcare and the available supply. During a meeting Tuesday, state lawmakers got a closer look at some of the ongoing challenges facing the childcare system.

…Pandemic-era programs provided additional support for childcare businesses, but much of that funding is coming to an end.

Carrie Krepps, executive director of Florence Crittenton, said her organization used childcare stabilization grants to raise salaries for staff in their early childhood programs. However, as that money expired, she said they had to maintain those wages in order to keep their employees. Now, they’ve turned to fundraising to make up the difference.

“Probably 30%, 35% of our staff’s wages have come from fundraising dollars,” Krepps said. “So while that’s manageable for us, because we’re a 120-year-old organization and have lived off of fundraising for quite some time, it’s not necessarily sustainable – especially when we’re looking to increase by another four positions in order to open those other spots.”

… “During and after COVID, the American Rescue Plan helped programs keep their doors open. But now, that money is gone. It had to be gone by Sept. 30,” said Rice.

Rice said the COVID-era relief funding primarily helped pay for staffers’ salaries. But without additional funds, early childhood programs are struggling to pay the number of employees necessary for infant and toddler care.

…At the home of Gallegos, nothing has changed, at least for her parents and for her small staff. For her, the child care cliff has brought one big change.

“Since the beginning of September, I am not receiving payment. I was thinking of closing and getting a job, but no. I see the children, and I made a commitment here,” Gallegos said.

She keeps working, for now for free, and keeps serving her community with the mindset that the secret ingredient is always love.

“I cannot throw in the towel at this time, when we have already achieved great things,” Gallegos said.

Seven child care centers in Western North Carolina will close on Oct. 31, leaving 300 children without care, according to an Oct. 20 news release from the North Carolina Department of Health and Human Services.

The centers are operated by Southwestern Child Development, a nonprofit that focuses on early care and education. Combined, the seven centers serve nearly 300 children up to 5 years old, the majority of whom receive child care subsidies or N.C. Pre-K services, the release said.

…Advocates asked the N.C. General Assembly for continuing stabilization grant funding that early childhood programs were given during the COVID-19 pandemic, in the amount of $300 million.

… Southwestern Child Development Commission, a nonprofit focusing on early education in western North Carolina, announced last week that it will close down seven agency-operated programs starting from Oct. 31.

“We no longer have adequate agency resources to supplement the state rate,” the agency said in the announcement. The agency raised the tuition rates on Oct. 1, but new rates offered little support to the rural counties where these programs were based, it said.

Any stabilization grants and other state funding the co-op received dried up over a year ago. Now, ECCCC is still recovering.

“We’re gonna have to operate at a deficit to keep our doors open,” Laverdure said. “It’s not a position we want to be in.”

…While the co-op offers what they can for employee benefits and has increased their worker’s wages, they’ve also had to raise rates for the families they serve. While these increases in fees are necessary for the co-op to function, Laverdure said it’s hard to strike a right balance so parents aren’t priced out of their services.

Billions of dollars of federal funding expired for child care, leaving hundreds of Oklahomans with questions, concerns and uncertainty.

Now, families are footing 50% of the co-pay bill after funding that covered the co-pay for child care for low-income families expired. Oklahomans have already felt the change in their wallets.

… There are still funds that don’t expire until Sept. 30, 2024. Those funds are what allow families to pay 50% of the co-pay and not 100%, and they also have benefits for the facilities.

The News Guard: Child care program faces potential $123 million shortfall, indefinite waiting list

A record number of Oregon families signed up for child care subsidies this year when eligibility was broadly expanded, but that has led to a budget shortfall that could reach $123 million.

…The budget deficit means the waitlist for subsidized care will probably remain in place indefinitely, barring a major investment by the Legislature in the 2024 session. Even if the program doesn’t grow beyond its current caseload of 15,600 families – which is unlikely – funding is $38 million short. That figure excludes $13 million in federal funding the agency expects to receive.

…To drive down co-pays and make the subsidy more useful for families, the state relied on about $97 million of federal American Rescue Plan Act funding. But the last of that funding will be spent within the year, Chatterjee told the Capital Chronicle last month, creating a funding “gap.”

A child care provider in Sioux Falls is closing. The Good Shepherd Lutheran Church confirmed to KELOLAND News it plans to stop offering child care services from its location in southeastern Sioux Falls.

Michael Johnson, pastor at Good Shepherd, said rising costs and worker shortages have been the biggest challenges since the COVID-19 pandemic.

…Good Shepherd received $360,000 in American Rescue Plan Act child care stabilization grant money, according to the DSS.

Johnson confirmed the child care provider received the government funding and was grateful for it.

During the COVID-19 pandemic, a new influx of federal funding allowed parents earning between 85 percent and 300 percent of the poverty level to access the state’s child care scholarship program. Though children previously accepted into the scholarship program during COVID will be allowed to remain, federal funds are no longer there, said Connelly-Anne Ragley, DSS chief external affairs officer, meaning an estimated 2,800 children across the state who once may have qualified no longer will.

…The South Carolina Department of Social Services is asking lawmakers for $10 million to provide child care scholarships for nearly 3,000 kids.

…The new group DSS wants to cover next was temporarily able to access child care help through federal pandemic relief money.

But a lot of that federal funding is now gone, leaving thousands of working families potentially unable to afford this cost.

…“The school just raised tuition this past August by 8% to meet costs, but that number is about to take an even bigger jump of 12% to 15% because their federal pandemic emergency funds just expired.

For an infant at Glen Leven, that 15% increase translates to an additional $234 dollars a month.

“It really does break my heart because I don’t know if our parents can afford it, and these kids need care,” said Glen Leven Preschool Director Debbie Ferguson.“

I think it’s very possible that a lot of centers are going to have to close their doors and/or are going to have to turn those fees and charge parents to be able to make up for the money that’s been lost from these funds,” explained Ferguson.”

A north Houston day care is closing Friday, sending parents scrambling to find child care and employees out of work as we head into the holiday season. The owner says she can’t afford to stay open since federal funding expired Sept. 30. State legislators considered but eventually decided not to add day care funding to the state budget for the next two years.

“You just have a peace of mind, and then the peace of mind is lost, and you start from scratch,” her father, Eric Seller, said. “We had a good routine, a good system,” the young girl’s mother, Angelique Seller, added. “And when that system falls apart, you’re in a panic, and do I keep my job?’

Read more here.

Public News Service: Report examines UT child-care crisis

A new report found licensed child care programs in Utah are only able to serve about 36% of all children younger than 6 whose parents are working.

Mike Wade, owner of First Steps Childcare and Preschool in Salt Lake City, said he views the child care sector as being “stuck somewhere between the private sector and the social service sector.” Wade considers child care an essential service, especially for mothers who want to work.

…Wade recognized the state “stepped up during the pandemic,” thanks to stabilization grants which were helpful. The report states the funds were cut by 75% last month and will end by next spring, putting the progress made at risk.”

…Hopkins House is a Virginia child care center that’s been educating young kids for decades. But the president of Hopkins House, J. Glenn Hopkins, says right now his industry is in trouble.

…In October, billions of dollars in federal funding for childcare expired. That forced Hopkins House to raise their tuition.

Henrico Citizen: Expiration of covid-era funding creates rocky future for Virginia child care

…Owner Elizabeth Oppong received past government funding, and said she’s still struggling to keep the doors open. Her situation will be worse without federal funding, she said.

Oppong can’t afford to hire more teachers, she said. That also means she cannot enroll new students, because there are state protocols for teacher to student ratios in day cares. She loses money every day, but there is a demand for her services.

“I get parents calling me every day,” she said. “I do have spots, but I don’t have a teacher yet.”

In Fairmont, West Virginia, Helen Post-Brown owns and operates an early learning program licensed to serve 160 children. These days, due to staff shortages, she can only accommodate about half that many.

A dozen miles down the road, in Bridgeport, five of the 25 classrooms in Jennifer Trippett’s child care center sit dark and empty. Families in the community are desperately awaiting her call for a spot: More than 400 children are on the waitlist. But without teachers, she can’t take in more kids.

Another 120 miles south, in the town of Oak Hill, staff at Melissa Colagrosso’s early education program are reeling from pay cuts that went into effect in October. They aren’t sure how they’ll make their next car payment or cover their phone bill. They might need to apply for public assistance — and maybe a new job. Colagrosso wouldn’t blame them, she admits. She is already bracing herself for their resignations. If those come, she will have to consider closing classrooms and turning families away.

It’s been two months since the federal government’s $24 billion in child care stabilization grants expired, sending the sector over what many have come to refer to as the “child care cliff.”

“What’s happening in West Virginia is not an anomaly,” says Melissa Boteach, vice president of child care and income security at the National Women’s Law Center. “It is echoed by the experiences of child care providers and parents across the country.”

…The essential worker exception, however, has ended, after being phased out over the last year. So those employees who came back to work for Trippett once their child care costs were covered? “They’ve left again,” she says; so have many of the moms who had re-entered the workforce.

…The wage supplements ended on Sept. 30. All of Colagrosso’s employees, as a result, took a pay cut of $400 a month. For many, though they knew the funding was always supposed to be temporary, that first paycheck in October was sobering.

…Colagrosso hasn’t lost any teachers yet, so she’s been able to keep her classrooms open. But she did increase her prices by 20 percent, effective Oct. 15.

It was necessary to offset the funds that disappeared, Colagrosso says. She gave families two weeks’ notice and hopes to “ease everyone into it” by not enforcing the tuition hikes until their child transitions to the next age group.

Ellie O’Keefe is among the parents who received the notice from A Place to Grow, which her toddler attends. She’s currently paying $155 a week for full-time care. Based on the center’s pricing model, she expected her costs to go down when her son turns 3 in a few months. Instead, her pay will go up to $170 a week when he transitions to the 3-year-old classroom.

…Tens of thousands of Americans missed work in October, the first month without stabilization grants, due to child care problems, according to data released by the Bureau of Labor Statistics. About 92,000 Americans who typically work full time reported having to work part time for at least one week last month because of issues with their child care arrangements, compared to 55,000 Americans in September.

Those numbers should be a wakeup call to elected leaders, Boteach of the National Women’s Law Center says.

“It’s an economic imperative. It’s a moral imperative. But lawmakers should also see it as a political imperative: It’s affecting families’ bottom line,” she says.

Funded through $24 billion in pandemic relief Congress approved in 2021, the bonuses made life a lot easier for the center’s teachers and staff.

But with the expiration of the federal money on September 30 came the end to those bonuses.

“All of the staff have taken a $400-a-month pay cut,” says Colagrosso.

…In addition to curbing bonuses, she has ended paid sick leave for part-time staff and says she will end it for full-time staff soon. She’s eliminated a floating position, someone to help out wherever extra help was needed.

No longer will she be giving $1 an hour raises every year, as she has for the past three. She may resort to larger child-to-teacher ratios, which she says would affect quality.

…If West Virginia wants to grow its economy, child care is part the infrastructure necessary for that to happen, Tiffany Gale said. She isn’t a parent herself, but just months before the pandemic started, she began caring for six children at her home in West Virginia’s northern panhandle.

In just three years, she’s moved up a level in the state’s quality rating status and expanded into an empty commercial space downtown. She has five staff members and 18 children — 24 split between the two sites — who would have otherwise been waitlisted. Three-quarters of them are considered low-income, and qualify for government-subsidized care.

With the help of federal subsidies, Gale was able to purchase the two units next door. But now that the pandemic-era support is ending, Gale doesn’t know if she’ll be able to stay in business.

…Zastoupil knew she couldn’t maintain her employees, and therefore the business, without this subsidy. She could not endure the hours required to run the program entirely by herself. Raising tuition to compensate for lost grant money was not viable, either. Reluctantly, on May 19, she closed her doors for good…When Zasty’s closed, 13 children in the Milton area lost their day-care arrangements.

Across Wisconsin, 168 child-care businesses, which collectively had a regulated capacity to care for nearly 5,000 kids, closed in the three months following the grant cuts, according to state data collected by Corrine Hendrickson, a child-care provider and advocate of additional funding.

Read more here.

The Sundance Times: Daycare grapples with loss of pandemic grant

Kid Prints Inc. is facing a significant budget deficit after losing a grant that has been in place since the pandemic began. The board of directors is pursuing numerous options to keep the daycare’s doors open to local young families.

“As of September, we lost the $60,000 grant we’ve been receiving,” said Janie Hett, Board of Directors. This grant has been in place since the pandemic began and was intended to facilitate COVID-19 relief.

The daycare is still managing to operate at under a $43,000 deficit, said Hett, but this obviously needs to be reduced.

“Last year, we increased our tuition by 5% while increasing our wages over 15% just to try to recruit and retain staff,” she said. “We have made a concerted effort to keep our tuition rates low for everyone who is struggling with our current state of economy.”

Kid Prints now intends to increase its tuition rates by another 5% in an effort to shore up the deficit. This would reduce the annual operating deficit to $22,000.

“We really tried not to have to increase our tuition, but we have to keep our doors open,” Hett said.

With the budget as it stands, Kid Prints is set to run out of money by February.

“We’re just racking our brains to try to figure out how do we make this business profitable – even if it’s not profitable, just sustainable – so that we can continue to provide,” Hett said.

“…It’s dire. We have to fix something.”

Read more here.

All Topics

State-by-State Map on Local Impact of Child Care Funding Cliff

State-by-State Map on Local Impact of Child Care Funding Cliff

Source Note: The numbers cited in the above map are estimates provided by the Office of Management and Budget on November 2, 2023

Map Key

Nearly 1,000 Organizations from all 50 States Urge Congress to Pass $16 Billion in Emergency Child Care Funding

Solutions to Address Looming Child Care Crisis

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Local Stories on Funding Cliff