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States need more child care funds

States need more child care funds
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The $3 billion that Congress sent to states to prop up child care providers and support working parents during the coronavirus pandemic is quickly running out. Now the child care market, which was already fragile before this crisis, faces mass closures, and parents and employers could be left without this critical foundation in the coming months. States distributed these federal funds sensibly and effectively, but Congress could swiftly provide more funds for states to keep child care providers in business while the country gets on the road to our economic recovery.

Even in normal times, child care providers operate on thin margins with no ability to make a profit, while workers rarely make much beyond minimum wage. As states imposed stay home orders, about 60 percent of child care providers temporarily closed. Parents are concerned about sending their children back when and if they can. Add financial concerns, like no ability to widely benefit from supports such as the Paycheck Protection Program, and many child care providers could then permanently close.

Any small business that closes is devastating to the business owner, the community, and the economy at large. But any child care business that closes can have vast detrimental ripple effects on a community that are unlike other business closures. Our economy depends on child care. In fact, 40 percent of the labor force has a child under 18, and businesses across the country lose an estimated $13 billion a year due to child care related issues faced by employees. Without a solid child care market to rely on, our ability to rebound from this crisis will be subdued.

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Congress therefore infused the Child Care and Development Block Grant with $3 billion that states could use to support the child care industry at this period of little to no revenues and also to ensure child care providers could remain stable enough to open once it was safe to do so.

We held a recent forum with numerous state child care administrators to learn how they used these federal funds. The consensus across was that the federal funds were an important and necessary down payment, but they are not enough to help the child care sector get to the other side of the crisis. States report their funds will run out this summer as they plan to open more extensively and allow parents to return to work.

While details on how states spent their funds differed, the goals were the same. States seek to support child care for parents on the front lines of the crisis and to ensure child care providers remain viable once it ends. Each state administrator discussed how the flexible funds helped them address these goals, but detailed that additional federal funds are still needed if the down payments are to be impactful and effective.

“This crisis will still continue and the funds will not allow us to go much further beyond the end of this summer,” explained Tracy Gruber, who is the director of the Office of Child Care in Utah. “This is not a shorter term crisis for child care.” Samantha Treworgy, a member of the Department of Early Education in Massachusetts also said, “We will all need longer term solutions if we are going to sustain critical child care programs.”

The forum illuminated several realities that states had acted responsibly in allocating Cares Act funds, the flexibility allowed states to effectively help essential workers access child care as well as send critical funds directly to child care programs to keep them viable, and states need more funds to continue these important investments and reach their goals. Congress would be hard pressed to find a better use of such federal funds.

The Cares Act is a great example of lawmakers directing funds states that spent them in an effective manner fully in line with legislative intent. The vast majority of parents support state decisions around child care, and a bipartisan majority of parents believe the government holds the greatest responsibility to support child care in the crisis. Time is of the essence to make sure these funds do not go to waste and are built upon successfully. Congress can allocate additional funds to states to ensure the child care market does not collapse and to assist our economic recovery.

Linda Smith is director of the early childhood initiative with the Bipartisan Policy Center and served as an architect of the military child care system. Kathlyn McHenry is a senior policy analyst at the Bipartisan Policy Center.