Apr 27, 2020

Will Child Care Be There When States Reopen?

Emilu Alvarez closed her private Miami preschool and kindergarten in late March as the new coronavirus began to spread and worried parents began to keep their kids at home. She kept paying her staff as she applied for federal small business loans and local foundation grants.

But the financial help never materialized.

“This is heartbreaking,” Alvarez wrote in an email to Stateline last week. “I have run this school for 26 years and I am at a loss for words on how to guide my staff.”

The next day, she told her team that 53 of them — everyone but her secretary and the kindergarten teacher, who’s teaching remotely — were furloughed until June. Alvarez hopes to reopen the center for summer camp.

Child care centers, home daycares and after-school programs nationwide are struggling to stay open as families stay home to avoid spreading the coronavirus. As some governors prepare to lift stay-at-home orders, child care advocates warn that if businesses like Alvarez’s cannot survive, it’ll be harder for parents to return to work.

“Every other industry relies on child care to be able to function,” said Sarah Rittling, executive director of the First Five Years Fund, a Washington D.C.-based group that advocates for child care and early childhood education.

Some states are helping. The North Carolina Department of Health and Human Services, for instance, will pay bonuses to full-time child care employees in April and May, and will continue to pay tuition subsidies for low-income children based on February enrollments, before the pandemic hit the state.

New Mexico Gov. Michelle Lujan Grisham, a Democrat, announced in March that uninsured child care workers diagnosed with COVID-19 would be able to enroll in the state’s high-risk medical insurance pool and that the state would cover their premiums.

And the Vermont Department for Children and Families is covering early childhood care tuition if families can’t keep paying. So long as providers maintain slots for families and fully pay their staff, they can charge families half of what they’d normally pay and ask the state to pay the rest. If a family decides to remove their child from the program, and the program can’t fill the spot with a child on its wait list, then the state will pay the provider up to $360 per week.

The state is spending $1.5 million per week to cover tuition reimbursements and financial incentives, said Steven Berbeco, deputy commissioner of the Vermont Department for Children and Families’ Child Development Division. There are about 1,200 child care providers in the state, he said.

National child care advocates want state leaders to use $3.5 billion in emergency child care block grants approved by Congress last month to help licensed businesses cover their operating expenses. The grants typically are used to help low-income families pay for care, but Congress also is allowing states to spend the emergency funds to help businesses open or reopen.

“If [businesses] can pay their mortgages, if they can pay their utilities, if they can pay benefits when their employees are furloughed, it will create stability in the marketplace,” said Rhian Evans Allvin, chief executive officer of the National Association for the Education of Young Children, a professional association based in Washington, D.C.

Nearly half of 5,000 child care providers Allvin’s organization surveyed earlier this month reported that they closed their doors during the pandemic, and almost 40% said they laid off or furloughed workers, or had been laid off or furloughed themselves. An additional 40% said they expect furloughs or layoffs in the next month.

Some state leaders already have announced plans to spend the extra federal money partly on aid for child care businesses. Virginia Democratic Gov. Ralph Northam, for instance, said last week that the state will spend some of its federal aid on grants for child care businesses that are open and serving essential workers — such as doctors, trash collectors and grocery store cashiers — and on additional funding for child care providers that serve low-income children but have had to close.

More than 2,600 child care centers, nearly 45% of Virginia’s total, have closed due to the pandemic, Northam’s announcement said.

Congress could approve even more money for child care in the months to come. U.S. Sens. Elizabeth Warren of Massachusetts and Tina Smith of Minnesota, both Democrats, earlier called for Congress to spend $50 billion to keep child care businesses afloat.

Shutting Down

Twenty states have ordered child care businesses to close unless they’re serving the children of essential workers, and 29 have allowed child care businesses to stay open, according to Child Care Aware of America, an organization that works with state and local child care resource and referral agencies. All states have taken steps to make sure essential workers can access child care.

But even in states where child care businesses can stay open, many are closing their doors, said Dan Wuori, director of early learning for the Hunt Institute, an education policy center affiliated with the Duke University Sanford School of Public Policy.

“Unless there’s a reason to send your kids to care,” he said, “most people are not.”

Some states are finding that even when they’ve offered free child care to essential workers, many prefer not to use it. In Colorado, for instance, 10,000 children have been approved to attend a free child care program for essential workers, even though 50,000 spots are available.

Some parents seem unsure, said Mike Johnston, president and CEO of Gary Community Investments, a Denver-based impact investment firm and foundation that created the program along with the Colorado Department of Human Services. “We’re seeing a lot of interest, and then we’re seeing some people waiting to decide if they want to commit to it.”

As demand for child care has dropped, the costs for providers have gone up.

States are requiring that child care businesses follow U.S. Centers for Disease Control and Prevention and state guidelines, such as making sure staff frequently sanitize surfaces and wear gloves while changing diapers, and that there are no more than 10 people to a classroom.

Some child care businesses are set up to serve many more children per classroom and can’t make payroll with just eight or nine pupils, said Kristi Kolitska, executive director of the Early Childhood Education Association of Colorado, a professional group.

Kolitska said some of her members that have shut their doors may wait to reopen until larger gatherings are allowed. “They need to be running full in order to make these payments.”

Once child care workers are furloughed or laid off, she added, it may be hard to lure them back because they can bring in more money in unemployment benefits than they can at their old jobs. Congress has authorized an additional $600 per week in unemployment payments through July.

To be sure, some child care businesses are managing to stay afloat. Happy Ladybug Early Learning, an Aurora, Colorado center, mostly serves affluent parents who work at a nearby medical campus or are willing to keep paying tuition even if they’re keeping their children at home.

But the business is still facing challenges, Assistant Director Cassie Larimer said. “Every day my fingers are crossed that I have enough hand sanitizer to get through and we have disinfectant.”

States Step In

Some states, such as Florida, have taken a hands-off approach to giving child care businesses assistance and advice.

Florida’s Office of Early Learning is offering first responders and essential workers free or discounted child care, and the state’s Department of Children and Families — which licenses child care facilities in most counties — is letting providers request waivers of specific standards if that will help them stay open.

But it’s been largely up to businesses and business groups to figure out what resources are available and how to continue to operate during a pandemic, said Chris Duggan, executive director of the Florida Association for the Education of Young Children, a state affiliate of Allvin’s group.

Perhaps the most important resource available to small businesses nationwide is the federal Paycheck Protection Program, forgivable loans for small businesses that avoid layoffs. But less than 3% of initial loan dollars were sent to educational services businesses, including child care, according to data released this month by the Small Business Administration.

Child care providers face a very different situation in Vermont, where child care centers must remain closed unless they’re serving the children of essential workers, but state subsidies have kept the industry healthy.

“Vermont saw the need to preserve the infrastructure as much as possible,” said Berbeco of the state’s children and families department, “so that, on the other side of our response, child care will be ready for Vermonters and ready for the Vermont economy.”

Thanks to the state program, few child care business owners have needed to apply for federal loans, said Trish Blood, secretary of the Vermont Child Care Providers Association, a professional association.

“Because of this just unique, amazing grant that’s come through, we haven’t really had to worry too much about that,” she said.

Other states could use federal child care assistance to fund a similar program, said Aly Richards, CEO of Let’s Grow Kids, a Burlington, Vermont-based early childhood education advocacy organization.

Read this story on the Stateline blog.

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