Missouri proposes $722M for struggling child care providers. But is it a Band-Aid?

Jan. 24—JEFFERSON CITY — Missouri Gov. Mike Parson's administration plans to use more than $700 million in federal aid to support child care centers hit hard by the pandemic, a boost the industry welcomes but says is only a temporary fix for staff shortages and other long-term issues.

The money comes from the American Rescue Plan Act, signed by President Joe Biden last spring. Most would go directly for grants to help child care centers stay open, retain staff through modest bonuses or expand operations, according to a proposed spending plan obtained by The Star. Parson wants $108 million spent on staff training and other professional assistance in the hope of creating a more stable workforce.

All of it is intended to keep afloat an industry that was stagnating prior to the pandemic and has since endured dire worker shortages.

Many centers in the Kansas City metro are operating under capacity, unable to hire and retain staff, according to the Family Conservancy, a Kansas City-based charity focused on children. Wait lists for some centers stretch more than 100 families long.

Since the pandemic began nearly two years ago, 30% of the state's licensed childcare providers have closed or reduced services, according to the Department of Elementary and Secondary Education (DESE).

"We want to get that back up and running, get the capacity out there," state budget director Dan Haug said. "One of the most important things to getting people back to work is having child care opportunities."

But while the funds are intended to stabilize and grow the supply of child care, they won't go directly to families under Parson's proposal — a different approach than some other states that are using the money to help parents reduce costs. In Kansas, Gov. Laura Kelly announced last July that some of the federal funds would be used to expand eligibility for state-subsidized child care and lengthen the eligibility period from six months to a year.

"We're on life support right now," said Deirdre Anderson, executive director of Early Start, which operates three child care centers in Kansas City for children under the age of 5. "These (dollars) are short-term and they're not going to be around forever."

Even before the pandemic, child care was a tough industry. Wages for many workers hover between $10 and $12 an hour, said Paula Neth, president and CEO of The Family Conservancy.

In Jackson County, just under 3,300 children in child care receive state assistance, according to Child Care Aware of Missouri. Of the 350 child care programs in the county, only half accept subsidies provided by the Missouri Department of Social Services.

The average weekly cost for full-time care of an older toddler is $210, according to the group.

The system is primarily financed by parent fees, Neth said, but parents are typically at their lowest earning power when they have small children — meaning they often can't afford to pay for high-quality child care. And care for the youngest costs the most to provide because state regulations require more adults to care for younger children than older ones.

If providers can't charge for the true cost of care, then there's a gap, Neth said. "And unfortunately, our child care workforce has been subsidizing child care for way too long" through low wages.

Parson's administration plans to put much of the federal aid toward one-time wage boosts.

More than $138 million would be invested in "retention grants," to encourage existing providers to remain open. More than $332 million would go to a payroll protection program that allows those centers to pay salaries, rent or other costs even as their capacities shrink.

About $14 million would be used to encourage centers to add 1,500 spots across the state for infants and toddlers, the hardest to place in child care. It would also underwrite space for 500 for children with special needs in communities with the shortest supply — such as rural counties.

The plan would also spend money on efforts to boost staff recruitment, such as $4 million on background checks and CPR training for new employees, costs previously borne by child care providers.

"A lot of this is to help them get started and open back up, or many of our existing childcare providers are at half capacity, so we're trying to help support them being able to open at full capacity," said Pam Thomas, assistant commissioner of DESE in the state's new Office of Childhood.

The infusion of federal funding, while welcome, still isn't a permanent solution, advocates say.

"It's a short term band aid to a long term issue," Neth said.

Anderson, of Early Start in Kansas City, said she's looking forward to offering some bonuses to her current staff, offsetting the costs of recruitment and the state providing professional development for child care workers.

But she worries about her ability to get new caregivers in the door at all. Her three centers combined could serve more than 300 children at full capacity, but she's down about 20% of her staff.

"All the workforce is just telling us, 'No, Hell no, right now I'm not coming to work, you're not paying me enough, and is it safe for me to go to work?'" she said. "Child care workers are putting themselves on the front line, caring for children that are temper-tantruming at higher rates because their parents are stressed out. Who in the world would want to do it?"

She wants to see a longer-term stream of state funding for providers.

"It would require a wage supplement where the state is intervening," she said.

Parson's overall budget proposal received mostly positive reviews from Republicans and Democrats, though some conservatives have recoiled at the $47 billion total. Still, signs have emerged that at least some provisions, including the child care spending, may be greeted with skepticism by more mainstream Republicans.

"You always have to have a conversation about the role of government and whether it's the government's job to be, you know, babysitter and at what age. And that's not a pejorative statement to the need for the families, but it something that we have to wrestle with," Senate Majority Leader Caleb Rowden, a Columbia Republican, said.

"In an ideal world, everybody would have everything they need," Rowden said, "but we don't live in an ideal world."

Still, Rowden said that the pandemic had made an "an already bad problem worse" in terms of child care.

Ultimately, child care needs to be viewed as a public good, Neth said, similar to K-12 public education, which receives local, state and federal support.

In the long run, Anderson said she wants to see state subsidies expanded. While 85% of her clients receive child care through some form of support, many of the others can only afford the cost of care because of scholarships, she said.

"The average family can't afford what it really costs to have their children cared for," she said. "We need to be sure we're also thinking about, 'How are we going to infuse long-term dollars in our community to sustain this sector?'"

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