With child care centers in Kentucky facing the end of federal pandemic relief funding, and families in many counties struggling to find care options for their young children, one state senator is proposing $300 million to support the industry.
Sen. Danny Carroll’s Horizons Act includes funds to help families cover the costs of child care tuitions, grant money for providers seeking to create innovative models for delivery of child care, and dollars for home-based care centers. Senate Bill 203 also creates an associate’s degree in early childhood education entrepreneurship at the state’s community and technical colleges that would teach students how to own and operate their own child care facilities.
“This issue is so important to our state, to our families, to our kids, to our economy,” says Carroll, “and it’s worth every cent of that investment.”
The Senate Families and Children Committee approved the legislation on Tuesday (Feb. 27), and the measure now awaits further actions by the Senate.
The Roots of the Child Care Crisis
Carroll, a Benton Republican who heads a western Kentucky non-profit that operates an early childhood center, says the child care crisis has been years in the making. He says Kentucky has lost half of its providers in the last decade alone. Now nearly 80 counties are considered child care deserts where more families are seeking care than local centers have available slots.
Part of the problem, which child care advocates say is a national issue, is the economics of the industry. Centers are caught between staffing costs and what parents can afford to pay in tuition. Infants and toddlers require more adult supervision than pre-school-age children. Yet the more employees a center has, the higher the operating costs.
“The business model is structured in such a way that you can’t generate more revenue, so we’re stuck where we are,” says Carroll.
That gives centers two options, says Sarah Vanover, policy and research director for Kentucky Youth Advocates. One is to keep employee wages low, which can lead to staff turnover. Vanover says the average wage for a child care worker in Kentucky is $12.39 an hour, which is below what someone could earn working in fast food or retail. The other option for centers is to raise tuition. In some instances, a family’s annual cost for child care already equals the cost of a year of college tuition, which prices families out of the market.
Congress provided vital relief payments for child care during the COVID-19 pandemic, but the last of those funds in Kentucky are set to run out later this year. Vanover says that money kept many centers afloat, and with the end of that support, facilities will be back to struggling to break even. She says that’s left providers with some tough choices.
“Do I lay off staff, do I reduce their wages, do I double the tuition for families, or do I just close?” says Vanover.
Would State Subsidies Result in Higher Costs?
Higher child care tuition or the closure of centers would impact more than just parents. Kate Shanks, vice president of public affairs at the Kentucky Chamber of Commerce, says those actions would reverberate through the state’s economy.
“There is a direct relationship to child care availability and affordability and workforce,” says Shanks. “If you don’t have child care, what is your alternative? Your alternative is not going to work, not going to a job, not being able to keep a job.”
While he acknowledges the benefits of quality care for the state’s youngest citizens, Andrew McNeill, president of Kentucky Forum for Rights, Economics and Education, questions the plan to pump millions into the industry. He contends many small businesses struggle to balance their expenses and profits, yet they don’t ask Frankfort for assistance. McNeill says parents have long grappled with child care and the issues facing in the industry deserve more than what he describes as a late-session bill to prop-up these centers.
“It’s kind of a rite of passage for parenting to go through some of the struggles of identifying child care, affording child care, making the sacrifice,” says McNeill.
Kentucky already has a state-funded program that helps low-income families pay for child care, McNeill notes. He argues that further subsidizing the industry will ultimately increase prices for their services. He says that’s what has happened with higher education and health care.
“Subsidies make services more expensive,” says McNeill. “So for the advocates, if their goal is to make child care more affordable, really the last thing we should be looking at are long-term subsidies, which will ultimately lead to higher tuition costs but also increasing costs, ever-growing costs for the taxpayers.”
Advocates say the state regularly incentivizes industries and businesses, from bourbon to the electric vehicle battery manufacturers. They also contend that offering high quality child care that is accessible to parents around the commonwealth is difficult in a state as poor as Kentucky.
“There really is no other choice than for state government to get involved to ensure that child care is an option for families,” says Prichard Committee for Academic Excellence President and CEO Brigitte Blom.
“These centers don’t want a handout,” adds Carroll. “They want to be able to survive like any other businessperson does, but the model just doesn’t allow for that, and subsidies may create higher prices, but investments in right places create dividends.”
Universal Pre-K and other Child Care Options
Some Frankfort Democrats, including Gov. Andy Beshear, have called for state funding of universal pre-kindergarten as another way to address the child care shortage and to better prepare Kentucky children for academic success as they grow older.
“I believe that the most important thing we can do is pass a public, universal pre-K program for four-year-olds,” says Armstrong. “Studies have shown over and over again that that’s the best way to make sure our kids are ready for kindergarten, and I believe it’s the best way to make sure that every kid across Kentucky benefits equally from our investments in early childhood education.”
Armstrong says universal pre-K can coexist with investments proposed in the Horizons Act. For his part, Carroll says he embraces an “all-of-the-above model” for early childhood education.
Blom says the Prichard Committee opposes any approach that would only fund universal pre-K. She says many day care centers already provide pre-school-quality child development opportunities. If all eligible youngsters were taken out of child care and moved into pre-K, Blom fears the child care centers would be put at even greater financial risk.
“If we do it any other way, what we’ll find is another death blow to child care,” says Blom. “So child care has got to be part of the pre-school delivery mix.”
Combining child care and pre-K models could provide new options for early childhood education in the commonwealth. Armstrong says the state needs more innovation in child care, especially for parents who work second or third shifts, or who have children with special needs.
“There’s a lot of innovation that we can do in this space to figure out how we meet the needs of families, how we meet the needs of kids, and how we make sure we’re setting up every child in our community for success,” says Armstrong.
Carroll says Kentucky can either “fall in a pit” with other states that have failed to support child care or be “the bright light on the horizon” that leads the nation with innovation in the industry. Vanover says Kentucky already has one policy that other states have copied. The Child Care Assistance Program (CCAP) allows certain child care workers to get free care for their own children. She also notes how several communities are fostering public-private partnerships to address local child care needs.
Shanks says the availability of child care is rapidly becoming an important recruitment tool for cities and towns to attract new businesses and workers.
“It’s not just what are the schools like, what is the housing situation? (It’s) what’s your child care situation like?” says Shanks.
For more content, watch KET’s Smart Start, a special report on early childhood development, which includes an extended discussion on the child care industry.
