Provide $80 million in CARES Act Funds for Child Care Stabilization Grants

Posted: August 24th, 2020 - By: Emily Griffey

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There is an urgent need for child care to support working parents. Multiple factors are coinciding into a perfect storm. This storm is threatening both the child care industry and our workforce, impacting approximately 450,000 children in Virginia who need some kind of child care and might not be able to access it.

Families are not able to access child care right now because:

The child care program they have attended is closed or is accepting fewer children. To meet safety guidelines, many programs have closed due to uncertainties with liability, finances, and staffing needs.
Parents have reduced incomes and may not be able to afford child care. .
School will now be virtual and parents must find safe, affordable, and nurturing caregivers who will help support their child’s virtual instruction.

More Children Need Access to Affordable and Safe Child Care

We estimate the number of children who need assistance for child care right now due to school closures and family financial insecurity to be more than 450,000 children in in Virginia. However, this estimate could change as school divisions and families adjust their plans to participate in virtual learning.

According to the KIDS COUNT Data Center 114,000 economically disadvantaged children under age 6 have working parents. These families struggled to afford child care before the pandemic. Now it could be more out of reach or unavailable in their community due to closures.
A recent national survey found that parents reported 85% of children will return to school virtually, and that 50% of those families will need to work full-time while their child attends school. With approximately 800,000 children age 4 to 13-years-old in public schools, this would equal about 344,000 children who need care and guidance while their parent works

114,000 + 344,000 ~ 450,000 children in need of child care

How to meet this need when it seems impossible? Plan for the long-term by building supply of child care facilities.

Grants and contracts will be necessary to ensure that child care is available, well-staffed, and provide safe care. Initial grants to child care providers from Virginia’s CARES funding for child care afforded providers an average $11,000 grant for a three-month period. A second round of grants would make a similar amount of funding available to providers for July, August, and September. Nationally, only half of the child care providers who applied for Paycheck Protection Program (PPP) loans were awarded funds, representing one-quarter of the total child care industry.

Additional CARES Act funding awarded to Virginia can help support the supply of available child care to meet both the long-term needs of early childhood programs, educators, and short-term care responding to school closure. For the child care industry to come back, programs will need funding to make up for the loss of tuition, and to cover the cost of hiring and compensating additional staff.

Grants could be structured to meet the supply demands in the following ways:

For center-based child care: Award grants based on the cost to hire and retain an early educator for one year, $40,000- $60,000 per classroom. These funds could serve 12-20 children depending on the age of child.
For home-based child care and networks providing micro-schools for low-income children: Award grants by offsetting tuition costs per child. The average home-based child care charges $8,000 tuition for 4-year-olds. To take additional children, or for new providers to care for children, home-based providers could receive grants to serve additional children based on the tuition amount.
For new, “pop-up” child care programs that will monitor virtual learning and are not intended to be sustained in the long term, costs could be scaled to meet the short-term need rather than the needs of an on-going classroom. The costs for short-term virtual learning support staff could be in the $20,000- $30,000 range to serve groups of 15-20 children for approximately a six-month time period.

With an investment of $80 million in CARES Act funding, Virginia could only provide:

1,600 child care classrooms serving 24,000 young children; or
10,000 tuition grants to children seeking home-based child care in small settings; or
Short-term monitors for virtual learning for 48,000 children.

None of these options are enough. Only the first two options invest in the longer-term stability of the child care industry and the early education workforce. The third is a band-aid to meet an immediate need. A pool of grant funding should be administered to promote additional child care access in communities with high percentages of low-income families and experiencing high rates of child care closures. Additional ground-level surveys and analysis being currently being conducted by SmartBeginnings communities can help identify needs. These networks or other local connectors like United Way can help local government and school division navigate what is needed to respond in their community.

The need is great. And the need is now. Use $80 million of Virginia’s unallocated $1.3 billion in CARES Act funding to provide child care stabilization grants to local community partnerships and providers. The Virginia Department of Education and Department of Social Services must develop grant criteria that local communities or regional collaboratives could apply for to meet any of the above needs for working parents and their children.

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