As pandemic funding fades, Missouri child care providers wonder what’s next

ST. LOUIS – Mary Crockett-Smith has spent three decades taking care of children. Now the owner of two early child care facilities in the St. Louis Metro area is worried about paying her bills.

Her facilities benefited from federal pandemic-era funding that acted as a lifeline for providers and parents struggling in the throes of COVID-19. That expired at the end of September. Missouri’s additional funding for early childhood subsidies have not gone as far as she hoped, and she worries she may have to let go of staff and cut hours to stay open.

She’s concerned about how families will be affected, but also her staff, who already need “all kinds of subsidies, food stamps, welfare, TANF (Temporary Assistance for Needy Families) … …..they are always trying to survive,” she said.

Across the country, many other providers are in similar situations. Along with helping child care facilities stay open, American Rescue Plan funds helped many providers increase wages for child care workers, who have long been among the country’s lowest-paid workers. Data from The Century Foundation, a progressive independent policy think tank, suggests as many as 3 million children could lose access to care with this funding now gone, setting off possible ripple effects “for parents forced out of work or to cut their work hours, for businesses who will lose valuable employees or experience the impact of their employees’ child care disruptions, and state economies that will lose tax revenue and jobs in the child care sector as a result.”

WATCH MORE: Child care advocates seek solutions as pandemic-era federal funding winds down

Last month, President Joe Biden and Vice President Kamala Harris called on Congress to extend an extra year of childcare stabilization funding “to help ensure that child care providers can remain afloat.”

This week, the administration pointed to new United States Department of Health and Human Services data that showed providers in more than 96 percent of counties nationwide received aid under the program. More than half of the providers who got stabilization funds were operating in the country’s most racially diverse counties, with a large portion of funds focused on rural counties and counties with high poverty rates, too.

Those additional dollars “would likely allow states to increase the number of children served and/or increase the reimbursement rate for child care programs serving low-income children,” Dr. Pam Thomas, the assistant commissioner for the Missouri Office of Childhood, told the PBS NewsHour.

In Missouri, nearly 11,000 kids risk losing access to care with the loss of ARPA funds.

The state set aside $78 million for child care subsidies this fiscal year, part of an effort to improve access to child care across the state.

Child care subsidies allow the state to pay a base rate to providers to offset costs for those who serve low-income families. Qualifying parents or guardians pay a fraction of the cost of regular tuition. The latest funding, implemented in July, increased the reimbursement rate for providers who receive subsidies for children from low-income or foster families.

This also affected “enhancements” or additional subsidy funds for meeting certain criteria, including being accredited by one of the state’s seven agencies and having more than half of their children receive subsidized care.

But not all early child care center operators qualify for these subsidies or enhancements, and for those who do, the money is only one part of the overall funding picture.

Before the pandemic hit, WePower, a local organization aiming to activate and elevate Black and brown communities, found that “over half of the children [eligible for subsidies] that are 0 to 5 in St. Louis did not have access to an early childhood space.”

“There’s just not enough options … and the options that are available are very expensive. This is something that’s been the case for a long, long time and that the pandemic shined a light on it for all of us,” Sarah Rittling, executive director of the First Five Years Fund, said.

Sarah Rittling, executive director of the First Five Years Fund said her organization works to advocate for more funding for early education programs. Photo courtesy of First Five Years Fund

There are around 11,000 child care workers in Missouri. Providers fear that after taking steps forward in the last few years, they’ll have to take steps back.

“Parents are gonna feel it, [early childhood] centers are, our children are going to feel it … it’s going to impact multiple systems,” said Paula-Breonne Vickers, director of early childhood power building at WePower in St. Louis.

A “fragmented” system

Prior to 2021, Missouri’s early child care services were “fragmented” across several departments, Dr. Pam Thomas, the assistant commissioner for the Missouri Office of Childhood, said. Her office, launched in 2021 by executive order, is housed under the Missouri Department of Elementary and Secondary Education.

The governor launched the new office to better organize the state’s early childhood system, she said.

Thomas told the NewsHour the department has two different buckets of ARPA funds. The money that ran its course at the end of September was “stabilization” money. Preliminary data from the departments shows more than $444 million went toward stabilization over the last two years. That includes one-time staff pay bumps made possible through a paycheck protection program, which ended this fall. The state also spent more than $120 million on helping more than 1,000 providers sustain their subsidy operations.

While those stabilization funds are no longer available, Thomas said providers and families will still have access to another year of federal dollars from the state’s discretionary ARPA funds, which can be used for things like professional development, retention and recruitment.

READ MORE: How the rising cost of childcare hurts parents’ job stability

One of the main services now under the new office is child care subsidies.

The rate at which Missouri helps fund low- income families in their pursuit of affordable early childcare is dependent upon several factors, including a market rate survey, which takes place every few years, money passed by the state legislature as well as federal dollars.

The Missouri Department of Elementary and Secondary Education said “ all child care providers currently contracted with the child care subsidy program and serving subsidy-eligible children were eligible to receive a base rate increase for the children they serve” as a result of the subsidy funding passed by the state legislature for this fiscal year. Since the base rate is used to calculate enhancements, those also increased “for contracted child care providers who are also accredited programs.”

But with the added funds came some confusion.

Until recently, some providers received both a subsidy rate enhancement of 20 percent for being accredited and an enhancement of 30 percent for being a facility where more than half of children receive subsidized care.

A number of providers this fall received notice that the state found that they were “incorrectly” receiving too much in enhancement funding, a discovery made after an “internal program integrity review” conducted in August, the department said.

According to the state, the policy had been changed to limit facilities to one and not both of these enhancements. When asked when the policy changed, the department said it could “track the change back to between 2016 and 2018.” Thomas told the NewsHour the recent program review revealed that the state’s systems were not updated accordingly. This meant that people like Crockett-Smith saw a drop in the enhancements they were receiving. Crockett-Smith said she was not notified of a change until she received the latest notice, which said providers cannot get both enhancements moving forward. She’s among the 50 of 2,300 contracted subsidy providers who were incorrectly receiving both rate increases, the department said.

“This isn’t about trying to shortchange anyone,” Thomas said. “It’s just really trying to make sure it’s fair. That’s very important for us to make sure that providers are fairly getting paid and when some are getting it and some are not,” she said.

For Crockett-Smith, this means her two locations are going to lose thousands of dollars each month.

“Payroll is running about, for both schools, about $62,000 … cut $12,000 off it, how are we going to make it?” she said.

Finding and keeping teachers

MacKenzie Grayson and Paula-Breonne Vickers both say there is not enough money being pumped into early education, which will in the end affect both families and providers. Photo by Gabrielle Hays/PBS NewsHour

In 2019, before the height of the pandemic, the median hourly wage for a child care worker in the U. S. was $11.65 an hour, according to the University of Berkeley’s Center for the Study of Child Care Employment. The median pay for a child care worker in Missouri that same year was $10.45, according to that data, the most recent the center has available.

In 2022, that rose to $13.72 an hour nationally and $13.50 an hour in Missouri, according to the Bureau of Labor Statistics.

How funding changes have or will affect that pay is unclear. Data from ZipRecruiter suggests the nationwide average for active job listings for childcare workers on its platform is now $14, while the rate in Missouri is $11.58 an hour.

Providers tell the NewsHour they are doing the best to pay their workers competitive wages but without adequate funding their hands are tied.

“We don’t have the funding available to offer employees a decent salary, insurances and all of the qualities they would offer if the kids were just a little bit older or if they were in a different situation like Urban League or Head Start, or any forms of federal funding where the additional fundings are available,” Crockett-Smith said.

While barriers exist for those institutions that are accredited, they also exist for those working towards it.

READ MORE: Biden administration plans to cap how much families pay for child care through grant program

Lisa Scheer heads up Baden Christian Child Care Center, Inc., which just marked 25 years in business. All of the children who attend her center, which is licensed, are covered under a subsidy. Though her institution just got a bump in funds, she said it didn’t bring all that much relief — instead, it’s raised more questions.

One of them: the bump in subsidy funding only covers this fiscal year.

”Where are they going to get funding for next year?,” she said.

For Crockett-Smith, the inequities in early childhood funding only further a divide that unfairly affects Black Americans across systems.

Black families are more likely to experience job disruptions due to childcare, a 2020 report from the Center for American Progress, a nonpartisan policy institute, found that the wage gap between white and Black early childhood educators has widened since 2012, from 84 percent to 76 percent. Another CAP analysis from 2022 found that Black and Hispanic children are also less likely to be enrolled in a high quality early childhood setting and Black and Hispanic early childhood teachers are more likely to be paid some of the lowest rates in the field.

Vickers said being an early education teacher takes hard work, a big heart and a lot of patience and deserves equitable pay.

“They should not be coming to work hungry. They should not be having to come to work with a lack of sleep because they have to work multiple jobs to provide for their own families. Like they should be able to come to work at their best selves as well because they’re not having to constantly fill in the gaps where this funding is going to lack,” she said.

Why early investment is important

As the mother of two children and a professional in the field, Vickers said there is not enough money invested in babies.

The first few years of life are critical for brain development, with more than one millions new neuron connections forming every second, according to Harvard University’s Center on the Developing Child. Studies show that proper investment in supporting their early education can lead to a better chance of staying in school, going to college, improved mental health and a longer lifespan. More funding is needed so that children are “ able to enter kindergarten … and not have to be learning skills that they should have learned earlier or that they could have learned earlier.”

The lack of funding “sends a message of [that] this field [is] being really undervalued,” said MacKenzie Grayson, interim executive director and the Gateway Early Childhood Alliance.

The St. Louis-based alliance is a network of providers, families and advocates who work to make the system more equitable.

“ECE [early childhood education] provides the highest return on investment in our education sectors and so when you have it that they’re underfunded and undervalued, then you go into quality being at risk and then our children’s needs aren’t being met, which means our family’s needs aren’t being met because families want their children to be safe and and successful as they grow,” Grayson said.

While the halt to ARPA funds is a factor, providers and advocates in Missouri tell the NewsHour that barriers to funding and resources existed before the pandemic, and communities will suffer without better solutions.

“All children deserve an opportunity to go to college. All children deserve an opportunity to have the education so if they want to continue on to any form of making differences in society, they have the capabilities to,” Crockett-Smith said.