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With Federal Grants Expiring, Democratic Governors Push Congress on Child Care

Despite lack of action in Congress, the ongoing child care crisis has received bipartisan attention at the state level.

Gov. Roy Cooper addresses the crowd during the North Carolina Democratic Party's election night party at The Dock at Seabord Station in Raleigh, North Carolina, on May 17, 2022.

Democratic governors are pushing Congress to make significant investments in child care as the last pandemic-era federal child care subsidies are set to lapse this fall, pushing providers and parents into uncertain territory.

Democratic Gov. Roy Cooper of North Carolina led a June 13 letter, signed by nine other Democratic governors, asking top congressional leaders to maintain the current funding levels and increase recurring funds for child care as they draft their fiscal 2024 budget bills.

“Of the many funding priorities before you, few are as critical to America’s working families as ensuring access to child care,” the letter said, warning that “the American child care system is now strained to its breaking point.” The governors of Colorado, Hawaii, Kansas, Illinois, New Jersey, New Mexico, Rhode Island, Washington and Wisconsin also signed the letter.

Despite a lack of action in Congress on the issue so far, the ongoing child care crisis has received bipartisan attention in the states. A total of 22 of the 36 governors who gave 2023 State of the State addresses, including nine Republicans, highlighted child care, pre-K and/or early childhood education in their remarks, according to an analysis from the center-left Center for American Progress.

Cooper describes investing in child care and early childhood education as a “triple play” that benefits child development and early learning, allows parents to remain in the workforce, and helps businesses in the state hire and retain workers. He’s asked the Republican-controlled legislature for $1.5 billion in the state’s upcoming budget process and has spent the spring visiting child care centers around the state, but wants the federal government to also pitch in on a more permanent basis.

“This is something that I think should unite all of us, but it’s somewhat frustrating that we don’t see significant help coming after these child care stabilization grants,” Cooper told The 19th. “It gave rise to the letter and my conversations with members of Congress and our state legislature to step up, because I’m worried that with these grants that we’re going to fall off a cliff here — and we’re going to make the problem that’s there already even worse.”

The United States has historically treated child care as a private market instead of an essential government service, like K-12 public education, and so it has not received consistent government funding and investment.

The COVID-19 pandemic drove thousands of workers out of the industry, another severe blow to the sector. As of April 2023, the child care industry nationwide had lost 54,000 jobs since February 2020, according to the Center for the Study of Child Care Employment at the University of California-Berkeley, representing a 5.1 percent decrease in the sector’s size.

Experts say that the business’s economics are contributing to fewer options and longer wait lists for parents and lower wages for child care providers, many of whom have struggled to keep their doors open.

The American Rescue Plan, signed into law by President Joe Biden in March 2021, put $39 billion into child care stabilization grants, the largest federal government investment in the industry in U.S. history. But the last of those grants are set to expire on September 30, leaving many states in a lurch.

Cooper said North Carolina has used the nearly $875 million it’s received in federal child care stabilization grants primarily toward increasing teacher pay and teacher bonuses to retain child care providers. But the expiring federal cash, Cooper said, means the state will have to “pare back.” Working to retain workers is especially crucial in North Carolina’s rural areas, which face even more dire child care shortages.

“If we can have support to help more slots get created, this will help rural North Carolina,” he said. “Because right now, about 70 percent of child care funding comes from parent tuition, and that is really not sustainable.”

According to the North Carolina Department of Health and Human Services, the last of the ARP’s child care stabilization grants to North Carolina will expire in December.

In many states, investing in child care doesn’t fall along neat partisan lines. Especially since the COVID-19 pandemic, legislators from both parties have pursued policy reforms to make it more available.

Democratic governors with new legislative trifectas, including the governors of Massachusetts, Maryland, Michigan and Minnesota, have achieved or proposed major investments in child care and early childhood education funds, including expanding state-level tax credits to families. Republican-controlled states including Missouri, Montana and South Carolina have also invested in expanding child care, pre-kindergarten and early childhood education in the past several years, and other Republican governors have called for more investment and expanded tax credits in 2023.

In some states the issue is partisan: Democratic Gov. Tony Evers of Wisconsin proposed allocating $340 million to the state’s Child Care Counts program, which distributed federal COVID-era aid, but the GOP legislature slashed funding for the program altogether in a late-night budget hearing, Wisconsin Public Radio reported.

In North Carolina, Republicans gained a veto-proof supermajority in the North Carolina General Assembly in April thanks to a House lawmaker’s party switch. GOP leaders then unveiled SB 20, a bill to ban most abortions after 12 weeks and impose additional restrictions on the procedure. They fast-tracked it in an unusually expedited process and overrode Cooper’s veto to pass it.

Republicans, who touted the legislation as “pro-woman” and “pro-family,” included $160 million of funding toward social programs primarily benefiting women and families. That sum includes $75 million to increase state child care subsidies over the next two fiscal years.

But Cooper said the child care funding in the bill made up only a fraction of what he would consider an adequate investment in the industry — and that it shouldn’t have taken doubling down on restricting abortion to further fund child care.

“I’ve asked for $1.5 billion to help with early childhood and continuing the childhood care stabilization grants, and neither the Senate nor the House budget has any significant help for that,” Cooper said. “That little bit certainly helps — it certainly should not be paired with taking away women’s reproductive freedoms, and introducing abortion bans that the people of North Carolina don’t want.”

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