Millions of dollars in federal COVID-19 funds have kept child care businesses afloat in the state for the last three years. Now that the money has run out, what is the state doing to support them?

WSHU’s Ebong Udoma spoke with CT Mirror’s Erica Phillips to discuss an article she wrote, “CT child care sector braces for fallout as COVID grants end,” as part of the collaborative podcast Long Story Short.

You can read the story here.

Episode Transcript

WSHU: Hello, Erica. Child care funding ballooned to hundreds of millions of dollars due to federal COVID relief grants over the past three years. How did that affect the availability of early childhood care in Connecticut?

EP: It had a huge effect. So the COVID funding brought hundreds of millions of dollars to Connecticut. Obviously this was going out to all states. It was intended to stabilize the child care sector. And what that means is, during COVID, a lot of parents were not having their kids attend child care, they were keeping them home for safety reasons. And so for a small child care business, for example, if you suddenly have only two students, as opposed to the six students that small family child care homes are limited to, that’s way less income, and it’s hard to keep the doors open.

So these federal grants helped these businesses keep their doors open, keep operating and have been there for three years now, not only enabling these small family child care homes to stay open, but expanding where child care was subsidized. So there were about 15,000 kids on a program called CARE for Kids before the pandemic. Now that number has expanded to 22,000. And these are families where child care is subsidized by Connecticut so they can send their kids to child care. This federal funding has enabled both the capacity of child care to remain stable, and the number of families qualifying for subsidized care to grow. And those grants are coming to an end.

WSHU: So before COVID, we had CARE for Kids taking care of about 15,000 kids, and now it’s over 22,000. Now that the money is gone, do we not have a need for those kids to be covered? Can their parents afford to pay for child care?

EP: Yeah, so, last year and this year, there’s been efforts to expand the amount of funding that the state of Connecticut puts into CARE for Kids. So this was federal money that was coming in allowing the subsidized child care program to expand. Legislators and officials in the state wanted to say, hey, let’s keep that as expanded as we possibly can. A number of new slots were added for infant toddler care last year, the rates that the state will pay providers per student were raised. And then again this year, the rates were raised for CARE for Kids.

And the problem there is they were significantly raised, it’s going to make a big difference for family child care homes that have low to moderate income families that they work with. But the number of slots now available is going to start declining. And what that means is for new students, for babies that are applying for CARE for Kids, there’s going to be fewer openings available. That’s not only because the federal funding is going away, the state is reducing the number of slots, but also there’s a new wrinkle, which is that the kindergarten age was raised this year. So that means next year there’s going to be a spike in the number of kids that are hanging around for another year, if that makes sense. That many fewer slots for babies in the program.

WSHU: And at the same time, there was a baby boom during the COVID pandemic.

EP: Exactly. So in a practical sense, it’s going to mean fewer slots and longer waiting lists. So parents who are getting ready to look for child care for their child, it’s going to take a longer time to find it potentially.

WSHU: And we also have a situation in Connecticut, where we have a ton of open jobs, but not enough people in the workforce.

EP: Exactly, you’re getting right at my economic development angle on all this. We’ve heard this over and over again, there’s 100,000 job openings in Connecticut, and we can’t find anyone to do a lot of different jobs around the state and child care teacher is one of them. And one of the additional challenges for this particular sector is they can’t pay very much, for someone who’s an expert in early childhood education, even a public school position pays more than a childcare educator position. And these are people a lot of times with degrees, they’ve gone to post secondary training or certification. So part of the reason they can’t pay as much as public school is because it’s not a publicly funded program the way the K-12 education is. It’s a business.

WSHU: The reimbursement rates have gone up, have they not? The CARE for Kids reimbursement rates?

EP: That is a specific subset of kids in child care. So if you qualify for CARE for Kids, which means you’re a low to moderate income family, you can get a subsidy for the care for your child. But that’s actually a minority of children in the state, most families in the state have to come up with the full cost. And, you know, providers try to keep that affordable, but with inflation and with costs going up, and they’re losing a lot of these stabilization grants, it’s going to be really challenging. So I guess to your point, not only could the waitlist get longer, but the prices are probably going to go up.

WSHU: So what’s the Legislature doing about this? We just passed this huge budget this year, what was in it for child care?

EP: What you just mentioned, which is an expansion of the reimbursement rate for child care slots for children, from low to moderate income families, that’s going to make a real difference for family child care providers that will get a higher reimbursement rate. But like I said, it’s a portion of the overall population that needs child care. So it’s a lot of money. There’s also another $15 million in the 2025 budget for early care and education. But again, this was hundreds of millions in federal grants that were coming in that are going away. And so trying to make up for that it’s going to be a challenge.

WSHU: So basically, the average Connecticut parent right now who might have benefited from these grants, might have to brace for spending more on child care in the coming year.

EP: Yeah, spending more and maybe having a hard time finding a place for their child.

WSHU: So tough times ahead. Are there any bright spots in this?

EP: Well, actually, let me backup for one second, because a minute ago, you were asking about jobs. And just to kind of make that connection as well, the reason why I cover the child care industry so closely is because child care enables parents to work. So if you have 100,000 job openings in the state, in all kinds of fields, there’s parents who work in all kinds of fields. And if those parents can’t find child care, they can’t fill those jobs. So there’s this connection. Not only is this this sector itself, struggling and having to figure out the economics of it, but they enable so many other sectors that are also facing economic constraints in terms of finding labor and so on. So they’re really a pillar upon which the rest of the economy stands.

So in terms of a bright spot, it is the CARE for Kids reimbursement rate and the infant and toddler reimbursement rate. That is what the state pays to subsidize child care for low and moderate income families. That’s going up. And the reason that that is really important, even though the number of slots is going slightly down, is it that allows child care centers that are serving low and moderate income families to potentially be able to make ends meet. A lot of these places have been working in the red just trying to stay open. And so if they’re getting a higher rate for each of the children that they’ve served, it’s going to make a real difference for someone who has six kids in their home every day, it’s going to be several thousand more dollars a year for them. So that’s, that’s significant.

WSHU: And would that increase the number of people who are staying in the field?

EP: It will make a difference for a lot of these providers. Just to end on a high note here. There was another little law that passed which changed some zoning regulations, which again, talk about technical and wonky, but what this is going to do is allow a family child care home to expand up to 12 students without having to seek zoning permissions. And that means potentially more capacity and if they’re getting a higher reimbursement rate per student, it could make a huge difference for some of those. So there is some potential capacity growth there in the industry that is worth highlighting for sure.

WSHU: So the state was able to get something that affected local zoning into law this year.

EP: Yeah, exactly. In one small way.

Long Story Short takes you behind the scenes at the home of public policy journalism in Connecticut. Each week WSHU’s Ebong Udoma joins us to rundown the Sunday Feature with our reporters. We also present specials on CT Mirror’s big investigative pieces.