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Jill Biden promotes federal child care funding in Minnesota

By:   ['Rilyn Eischens', 'More From Author', '- February'], Minnesota Reformer
Date: 2022-02-09 00:00:00

First Lady Jill Biden talked with Minnesota officials, parents and child care providers on Wednesday about federal investments in early childhood education and local efforts to support the beleaguered industry.

U.S. Health and Human Services Secretary Xavier Becerra, U.S. Rep. Ilhan Omar, Gov. Tim Walz and Lt. Gov. Peggy Flanagan joined Biden for the discussion at the University of Minnesota’s Child Development Laboratory School.

During the roundtable, participants said the $500 million Minnesota received for child care through the American Rescue Plan was vital in getting families and providers through the pandemic — but the industry is still in crisis.

“We all know it. There’s a lot more to do. Families’ challenges didn’t just start with COVID-19,” Biden said. “We need fundamental change if we hope to build back better.”

Support for a struggling industry

Quality child care is linked to both short-term benefits for child development and long-term positive effects on educational attainment, criminal activity, employment and earnings, experts say. It’s also critical for economic growth, by allowing more parents — especially women — to enter and stay in the workforce.

Minnesota’s 2021 budget increased funding for early childhood education programs by $500 million. It was an unprecedented sum — but almost entirely from federal COVID-19 relief aid, which isn’t permanent. The package included just $24,000 in new state spending on early childhood education.

Elizabeth Davis, a University of Minnesota economist, said the pandemic exposed and exacerbated the child care industry’s existing challenges. The industry was already crumbling because providing high-quality care is extremely expensive, she said and the U.S. child care model requires parents to cover the costs, which many can’t afford.

Even before the pandemic, a quarter of Minnesotans lived in “child care deserts,” and many businesses barely managed to stay in the black. Workforce shortages have exacerbated staffing challenges in an industry with notoriously low wages — the median hourly pay was $12.28 an hour for Minnesota child care workers and $17.06 an hour for preschool teachers in 2020.

Child care providers have recovered slightly compared to early 2020, when many were forced to shut their doors, Davis said. However, the industry still hasn’t bounced back to pre-pandemic operating levels, she said.

About $300 million of Minnesota’s American Rescue Plan funds for child care went to monthly stabilization grants for providers, primarily for staff pay raises. Dianne Haulcy, senior vice president at early childhood nonprofit Think Small, said the money helped many Minnesota providers keep their doors open, but they’re still struggling.

“We have heard from many providers that it saved them,” Haulcy said. “But it’s also been stressful for mental health. We’ve heard about what happens when there’s a (COVID-19) exposure and providers have to close down. Early childhood educators are leaving the field because of this stress.”

Michelle Botz, director of the child care center Especially for Children in Eden Prairie, said the federal funding allowed the center to provide bonuses and paid mental health days for staff. They also stopped charging families tuition for days the center is closed due to COVID-19 exposures, she said.

“As much as the funding is great, it’s still not enough,” Botz said.

Child care assistance

Minnesota also used $100 million in American Rescue Plan funds to increase subsidies for low-income families through the Child Care Assistance Program, a change that was long sought after by providers and families. Lawmakers agreed to set reimbursement rates at the 40th percentile for infants and toddlers — meaning they’ll cover the full cost of daycare at 4 in 10 child care providers — and the 30th percentile for older kids.

Minnesota’s reimbursement rates had been set at the 25th percentile — well below the federal guidance to keep them at the 75th percentile and among the lowest in the nation.

When the state subsidy doesn’t cover the full price of child care, providers either have to take a loss or ask families to pay the difference. Low reimbursement rates make it difficult for providers to participate in the program, according to a 2019 report by the state.

This year, Walz’s supplemental budget proposes raising reimbursement rates to the 75th percentile and eliminating the program’s waitlist, as well as funding 10,000 additional child care scholarships for Minnesota’s most vulnerable families.

Shawnice Walls, a single mother of two, said public assistance was crucial for her family while she was working and finishing her associate’s degree early in the pandemic. When Walls couldn’t afford to pay her portion of child care costs required by the child care assistance program, early learning scholarships covered the gap, she said.

“I was really working hard to try to provide for my kids. I don’t know how I would’ve done it,” Walls said.
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