Minnesota is now a leader in solving the child care dilemma – but there’s still a lot to do

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Dani Carlin opened a daycare center in St. Paul in June, just three months after President Joe Biden invested billions of federal dollars to shore up America’s ailing child care system.

Carlin has been assigned a quality childcare coach, is receiving licensing training and now receives a monthly grant check of $430 to help cover the costs of masks, sanitizers and food for the six toddlers attending Carlin’s Little Naturalists Preschool – all because of how the state of Minnesota has chosen to spend federal aid.

With unprecedented pandemic assistance from the federal government, as well as additional public funds, Minnesota has developed emergency and long-term strategies aimed at rescuing a struggling industry. The state has done as much or more than others to stabilize centers that were struggling even before COVID-19.

But even with the progress, many child care advocates, business and industry leaders say more progress is needed, from increasing help for low-income parents to consolidation of certain emergency financing measures.

Preventing child care providers from leaving the industry and filling the care gap is critical. In 2021 alone, Minnesota lost 494 in-home child care businesses, eliminating slots for 10,217 children, according to the Minnesota Department of Social Services. The shortage of childcare staff compounds these losses, adding further stress to centers that are still open.

That’s why helping new suppliers like Carlin is a key part of the proposals.

For example, a “one-time” supplemental grant of $1,400 arrived in the mail last month, just as several of Carlin’s clients suffered COVID-related setbacks and were late paying their bills by $270 a week.

With all the support, Carlin plans to double the number of children Little Naturalists serves later this year and hopes to add children from low-income families for the first time.

Trying to stabilize a struggling industry

The vast majority of the 20 million working parents who depend on childcare pay the bulk of the costs themselves. While assistance programs are in place for the poor, there are often waiting lists.

Money from Biden’s $38 billion U.S. bailout will sort out the system for most states through 2023. Governor Tim Walz and Minnesota lawmakers have proposed spending some of the budget surplus $7.7 billion from the state to provide long-term relief to the industry.

Minnesota has used federal aid, among other measures, for “stabilization grants” to child care workers, many of whom make a living on just $11 to $12 an hour.

Minnesota’s $324 million grants have helped Carlin and thousands of other child care providers adjust to the realities of COVID-19 and replace lost revenue as the virus forced employees and children to stay at home.

“The extra money was really helpful,” Carlin said.

The money helped develop protocols that helped keep children at the center, “a huge struggle” for many Minnesota providers operating on a shoestring budget during the pandemic.

“You really can’t overstate how much poverty early childhood educators are in,” said state Rep. Dave Pinto, DFL-St. Paul and Chairman of the House Early Childhood Finance and Policy Committee. Parents cannot afford the cost to cover all the expenses of child care providers.

“So a quarter of [employees] experience food insecurity. A third of them get public assistance themselves,” Pinto said. “They get more money on day one [working] at the local convenience store only after 10 years of working as an early childhood educator. »

Minnesota has used $180 million in federal aid to increase child care assistance for working families in need. Nearly $10 million will go towards new licensing and training aid, college scholarships for new field workers, and renovations to bring child care centers up to code.

However, federal funds only go so far, Pinto said. They have done little to permanently expand child care to all children under 5.

“Child care is a system that deserves the same kind of support as K-12. And that’s where we fail, and where most states fail,” Pinto said.

The Federal Reserve Bank of Minneapolis found that the government spends about $10,000 for every school child over age 5, but only $900 per child from birth to age 3. It spends $2,500 per child aged 3 and 4.

Parents await succession

Part of Biden’s Build Back Better plan would ensure that middle-class families pay no more than 7% of their income for child care. The President’s American Family Plan offers free preschool for all 3- and 4-year-olds.

St. Paul’s parents, Rachel and Andy Fields, would appreciate such help. They pay nearly $1,000 a month so their 2-year-old daughter can attend daycare three days a week.

“It’s a challenge. We don’t make a lot of money,” Rachel Fields said.

It’s unclear whether Biden’s plans have the support to pass. It’s also unclear whether Walz and state officials have support for their plans.

In January, Walz proposed using $1.8 billion of Minnesota’s budget surplus so another 50,000 infants, toddlers and preschoolers could receive state assistance and services. early learning through a combination of school programs, daycares, home-based facilities and Head Start classrooms.

His measure would eliminate waiting lists for hundreds of families who qualify for state assistance but do not receive it. The changes could save a rural family of four about $14,000 a year in child care costs.

The state has about 340,000 children under the age of 5, so the idea of ​​helping 50,000 is “really a big deal,” said Erin Bailey, deputy commissioner of the Minnesota Children’s Cabinet, an interdepartmental group that focuses on children’s issues.

Still a long way to go

If the state’s solutions for childcare take hold, more help may soon be available for working parents.

Last month, several House bills passed through state legislative committees in hopes of securing permanent funding for 4,000 voluntary preschool slots that operate in public schools. Funding expires every two years, prompting biannual funding battles, including one this year.

Fridley School District Superintendent Kim Hiel told the Pinto Early Childhood Finance and Policy Committee last month that the Legislative Assembly must do the right thing. It has 145 preschoolers, 57% of whom received a free or reduced lunch, who rely on state assistance.

If the legislature fails to renew the funding, “it will put the burden of the cost on the shoulders of parents, many of whom cannot afford [it]”, she said. “Having that funding fully intact at its current funding level … is very important.”

Karl Brown, director of community education for Mounds View Public Schools, said the two-year expiration cycle for some state Head Start programs means school districts like his don’t know before the end of the legislative session in May, or later, if they are going to get the money needed to teach the most needy 4-year-olds in the city.

Uncertainty prevents good awareness among families and creates inequalities, he said.

Permanent aid, not short-term pandemic funds, is also needed to shore up existing programs that working poor parents in Minnesota depend on, advocates say.

Until recently, Minnesota reimbursed providers caring for poor children at just 25% of the industry rate. In November, the state used federal funds to increase that wage through 2025 to 40% for infants and toddlers and 30% for preschoolers.

Walz is offering to reimburse suppliers at 75% of the going rate, which is what US guidelines recommend.

It would help a lot. Providers often want to help low-income children through state assistance but can’t afford the hit to their wallets, said Clare Sanford, director of the Minnesota Child Care Association and member of the task force. Great Start for All Minnesota Children in the State. .

“Not all providers accept state assistance because reimbursement rates are too low,” Sanford said. Without a higher reimbursement rate, centers can lose money, so “it’s a really big deal when a state actually gets its reimbursement level up to the federally recommended level.”

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