MINNESOTA, USA — On Sept. 30, a federal program that helped childcare centers stay open during the pandemic will end and some experts say the loss of federal funding could force thousands of daycares to close.
The American Rescue Plan, a pandemic aid package, included around $40 billion for the childcare industry, which included Child Care Stabilization Grants.
These grants helped providers pay their workers to prevent them from leaving the profession.
"This had been a really important lifeline to keep their doors open, keep them operating,” Child Care Aware Minnesota Executive Director Ann McCully said.
That federal funding is set to expire on September 30th as the program comes to an end.
Some childcare experts argue that without this federal funding, the industry will face a crisis that could affect millions of families.
The Century Foundation estimated that 70,000 childcare programs nationwide could close and up to three million kids could lose their childcare spots.
Childcare experts also believe that many daycare providers will decide to raise their rates to compensate for this loss of funding, which would put an added burden on young families.
“The federal funding ending is a real crisis around the country and centers are going to close, but we’re trying to get the word out that Minnesota is in a far better place than almost all other states in the country,” Clare Sanford explains.
Sanford is the government relations chair at the Minnesota Child Care Association.
She says the Minnesota state legislature recently approved state funding to fill the void that will be left over when the federal funding expires.
"Families shouldn't be nervous that the sky is falling,” Sanford says.
In May of this year, the Minnesota legislature created the Great Start Compensation Support Payment Program.
Sanford said under this new program childcare providers and workers will receive the same compensation and benefits they are currently receiving through the federal program.
“With this funding, it boils down to around $300 per full-time equivalent. Many providers will choose to increase wages for their employees, some may choose to increase health care benefits or increase 401k contributions, or something like that,” Sanford explains.
She said parents likely won't notice a difference as this new state funding kicks in.
The funding is in the budget for the next two years.
She's hoping that certainty will give daycare providers an incentive to grow and add more jobs in the coming years.
"We need more providers in Minnesota. We think this will make it easier for providers to locate and expand here,” Sanford said.
McCully is hoping to see additional increases in compensation in the coming years because she feels the profession needs even more incentives to attract more workers.
“I have a goal of being able to have these professionals make as much as a kindergarten teacher. To our mind childcare is an extension of education. It is every bit as important and we need to be compensating our field,” McCully said.
Wisconsin is among the states that don’t currently have a plan in place to fill the void left over after the federal funding goes away.
Republicans in the Wisconsin state legislature recently proposed a package of bills to help the childcare profession moving forward, but those bills haven’t been approved yet.
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