Commission: childcare unaffordable; Low pay found to be driving out providers

Note: This story appeared on the front page of the St. Albans Messenger on Tuesday, 12/13, 2016. It is reposted here in full with permission of the Messenger. 

ST. ALBANS — According to Vermont’s Blue Ribbon Commission on Financing High Quality, Affordable Childcare report released last Friday, high quality early care and learning is not affordable for 90 percent of Vermont families. At the same time, the number one reason childcare providers are leaving the workforce is low wages.

The commission recommends the Legislature and incoming Administration make immediate investments in early care, including adjusting the childcare subsidy program rates and offering more support services for providers. In the long-term, the commission said the state should look into moving toward a comprehensive integrated early care and learning system.

The commission, comprised of agency representatives, business leaders, parents and child care providers, spent 15 months researching the state’s current system of early care, including consulting with early childhood experts, examining national studies and listening to Vermonters are five public forums around the state.

The first half of the report focused on defining high quality childcare and explaining why it matters: to children, to parents and to the economy. In the second half, the commission calculated the “true cost” of high quality childcare and provided short-term and long-term investment options to make early care and learning affordable for Vermont families and to better support childcare providers.

The commission calculated the true cost of care by estimating the costs associated with running a high quality childcare program. Based on the commission’s model, the total annual cost for an average sized center, with 34 children enrolled, was $852,825. The total cost for a home-based childcare program, with nine children enrolled, was $124,369.

To determine the cost per child, the total cost was proportionally divided by age groups and number of children served by program type. The commission estimated the cost to provide high quality care to infants, toddlers, and preschoolers ranges from $13,879 to $41,639 per child annually.

With these numbers, the commission estimated that it would cost $849,254,369 to provide high quality childcare to all children from birth to five in Vermont. Given the current state investment of $129,979,869, the estimated family contribution, based on the commission’s sliding fee scale, would be $371,845,064. An estimated $347,429,436 in additional investment would need to be found, according to the commission’s model. To just serve children from birth to five with both parents in the work force, about 70 percent of the state’s children under age 5, would cost $597,875,076, according to the commission’s calculations. The estimated family contribution would be $261,778,925, with $206,116,282 needed in additional investment.

The commission said there should be additional analysis into how existing publicly funded programs, that provide wrap-around services for children with special needs from birth to age five, can be more effectively administered. It said the costs of wrap-around services are often passed onto childcare providers because of failure to maximize current programs.

The commission added that increased investments in the programs and initiatives currently supporting child care providers in Vermont, such as higher education degree programs and professional development, could significantly “move the needle” on increasing the supply of high quality early care and learning programs.

Studies show the number one reason childcare educators leave the field is low wages. A recent study conducted in Vermont found wages in home-based and center-based programs to be lower than wages in public school settings. The commission said some of the disparity is due to level of education and qualifications, but for similarly qualified teachers, the pay is significantly lower for an early childhood professional compared to a kindergarten teacher.

According to the Vermont Dept. of Labor, the median hourly wage for childcare providers at licensed centers is $11.25 in Vermont. Hourly wages range from $9.37 up to $16.01.

The commission said in some cases, childcare providers do not recognize their role as “professional” due to the low wages. This perception, along with lack of available resources, training, and professional development can lead to inefficient business practices, according to the commission.

The commission recommends investment in shared services between center and home-based providers and in early care advocates that provide direct services for children and families. It also said comprehensive study of transportation services for childcare is needed.

After establishing the cost of high quality early care and learning programs, the commission determined what is affordable for Vermont families, further identifying the gap in investments.

Based on national numbers, the commission said a family should spend no more than ten percent of its income on childcare. In Vermont, families pay 25 to 53 percent of their median income on childcare, based on a 2014 market rate survey. The state is ranked 13th in the nation for least affordable centerbased infant care, according to the “Parents and The High Cost of Child Care 2015 Report” from Child Care Aware. It also ranked third on the list for having the least affordable centerbased four-year-old care.

The Child Care Aware report found that single parents in Vermont pay 86 percent of their income to send two children to fulltime center-based care. In addition, married families living at the poverty line with two children pay 88 percent of their income for childcare, according to the report.

The U.S. Department of Health and Human Services recommends states establish rates for their child care subsidy programs that allow assisted families access to at least 75 percent of the childcare market. Vermont’s rates fall short, ranging between 25 and 48 percent of the center-based market rates and between 27 and 55 percent of homebased market rates for four and five STAR-rated programs.

The data indicates that about $130 million is spent annually in Vermont on early care and learning, leaving a gap of $283 to $766 million in investments, to ensure equal access to high quality child care statewide.

The total spending estimate does not include critical programs and grants that also support health related services, mental health services, and other wrap around social services. The commission recommends a comprehensive examination of the early childhood system and related programs, which includes a review of all public funding dedicated to families and children birth to five.

According to the commission, “equitable early care and learning for all Vermont children ages birth to five is the most significant opportunity for the state for making systemic and dynamic improvements that will foster economic development, advance social and community wellbeing and provide the greatest positive impact for future generations.”

The commission said in the state’s current system, this level of quality is unaffordable for 90 percent of Vermont families. Therefore, it recommends both short-term investments and a long-term transformational design of the early childhood system.

Some of those recommendations include finding efficiencies in the current system, developing a new tuition assistance system, making immediate investments to support the early care and education workforce and tasking the state’s early childhood public/private partnership, Building Bright Futures (BBF), with building off the commission’s work and exploring questions of delivery, funding and governance.

For the full report, visit buildingbrightfutures.org.