State health leaders say child care is already hard to come by in North Carolina and could become even more scarce later this year if state and federal action is taken.
The problem, they say, is that the business model is “unsustainable” coupled with the cessation of federal pandemic funding that underpinned it.
Congress has provided billions of dollars to states to help child care providers stay open during the COVID-19 pandemic. North Carolina’s share is about $1.3 billion. However, this additional funding will end on October 1, and federal funding for child care in North Carolina is expected to return to pre-pandemic levels of about $400 million.
At the same time, the costs of providing assistance have increased significantly, and the state does not pay enough to cover them.
Ariel Ford, the state director of child development and early childhood education, told a legislative panel that oversees Health and Human Services that preschool teachers earn on average only about $14 an hour, not enough to meet basic needs. At the same time, government subsidies cover only about half the actual cost of services, leaving most parents unable to make up the difference.
Ford said federal funding and some state funding have kept North Carolina’s child care workforce relatively stable over the past several years, filling a gap and allowing teacher salaries to be slightly higher. But “money is running out and we all need to come together to find solutions,” she said.
“We have worked diligently to find the right way to fund this system,” Ford told lawmakers. “We know it has to be innovative. We know it has to be fair, and we know we have to deal with inequality. between urban and rural communities.”
If parents can’t find child care, they can’t work, limiting the state’s future economic growth, Ford said. This is already a problem in some rural areas and other so-called child care deserts.
Ford said a $20 million pilot program aimed at increasing child care services in these areas shows many businesses are interested in solving the problem if they can provide some help.
“We received over 3,000 applications but only approved 200,” Ford said. “The request for this $20 million exceeds $700 million.”
Oversight Committee Chairman Donnie Lambeth acknowledged the state “faces real challenges that lawmakers need to address” but called what he heard “disturbing.”
“Sometimes I want to put on my conservative fiscal hat,” said Lambeth (R-Forsyth), “and I think, ‘Well, why on earth are we subsidizing child care in North Carolina? Why is this the responsibility of taxpayers? ‘
“We’re facing a financial cliff that we’re pushing back from, and you’re going to have to invest tens of millions of dollars more,” Lambeth continued. “To be honest, that’s not the answer.”
Ford responded that Congress could take some action to address the problem, but that might not happen until the funds run out, so state governments might have to help find a bridge.
Many states are seeking to significantly expand federal grants for child care development, she said.
“Every state in the country is heading towards the same cliff, so we’re in good company. All 50 states, all territories and all tribes are heading toward this cliff together,” Ford said. “I agree that a solution will not be found until early November. But I hope they come back and are willing to help make sure the country’s economy remains strong.”
Post time: Jul-19-2024