Unprecedented number of child care centers expected to shutter as pandemic relief funds end

“We’re hearing stories every week of centers in different parts of the state having to close their doors.”

By Kristen CabreraAugust 4, 2023 1:47 pm, , ,

The end of pandemic-era financial relief is around the corner. For many families, resuming federal student loan payments and a halt to Medicaid qualification has piled on to the loss of SNAP benefits in March of this year.

But the loss of financial relief funds that weren’t going directly into a family’s wallet is also ending, and working families with young children are likely to feel it. 

Childcare centers around the country have likely gotten their last pandemic relief check and with it comes worries and complications.

Cody Summerville, executive director of the Texas Association for the Education of Young Children, spoke with Texas Standard about the tight spot this will leave families with young children in and how the effects ripple into the workforce economy. Listen to the interview above or read the transcript below.

This transcript has been edited lightly for clarity:

What concerns are you hearing from child care providers?

Cody Summerville: Child care providers across the states are really having to grapple with what does this mean when it comes to this last payment? And we did a survey of about 1,600 child care programs earlier this year, and 44% said that they were likely – or maybe likely – to close their doors in the next year without additional funding.

So, in other words, they’re losing customers because customers just can’t afford to pay for the child care without these checks coming in.

So there’s some of some of that. There definitely is a lack of affordability of child care in our state. The average cost for infant care is about $9,000 here in Texas. And what we see is it’s really hard for child care programs to keep their bottom line turned right side up as the business model of child care just doesn’t allow for the business to charge families exactly what it costs and keep doors open.

And so there’s this gap in what families can pay and what it cost to provide high quality care. The COVID relief dollars helped cover that gap the past two years, and without additional funding, you know, that gap is going to be left uncovered and it’s going to put many health care businesses in a dire financial situation.

My understanding is there was an attempt at additional relief from the state Legislature. What happened?

That’s correct. Rep. Armando Walle of Harris County put a budget writer in for a $2.3 billion – unprecedented amount of state general revenue – to go towards child care. And unfortunately, that budget writer did not make it in the final version of HB 1 that was passed this last legislative session.

Well, where does that leave child care centers?

At least some care centers are really trying to figure out what they’re going to do next. Many child care programs are struggling to attract and retain teachers.

The average child care teacher in Texas earns about $12 an hour, and that’s without any benefits. And with all other industries paying higher starting wages, that’s making it really tricky for those homecare programs to keep teachers in their programs. Without teachers, they can’t enroll children, and which makes it really difficult to generate the revenue needed to keep their doors open.

» RELATED: Compared to pre-pandemic levels, Texas’ childcare industry remains understaffed

This has ripple effects that go beyond those in the child care industry, obviously, because you think about the burden that families now have to shoulder if they can’t find child care, can’t afford the child care, or if the nearby child care center has shuttered because it can’t afford to stay in business. You’re talking about, well, what? What do mom and dad do in that situation? 

Mom and Dad are going to have to figure out who is going to stay home and who’s going to go to work. And that’s going to affect us all.

I personally don’t have young children that are in child care, but I definitely rely on individuals who have young children who need child care. We all have doctors and construction workers, grocery store clerks who have young children in child care. We need them to be able to show up, to work, to do their job.

And so this will be something that affects us all as parents have young children aren’t able to go to work due to the lack of child care.

The survey that you put out in March of this year had a significant number of responses, saying without the funds, childcare and child care centers are going to close. You made reference to that a little bit earlier. What does happen if a large percentage of centers do close in? Is that your expectation as we’re in the coming up on the end of of the summer and start to move into these fall months?

So we do anticipate centers closing. We’re hearing stories every week of centers in different parts of the state having to close their doors and the centers have until end of November to spend their last relief dollars.

And on the other side of that, I anticipate we’ll see more programs closed. And this is going to be something that affects every community here in the state of Texas and will have a lasting effect on our economy as the supply of workers in all industries is shortened because of the lack of child care.

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I don’t guess there’s an easy answer for this. But I think I should ask the question that a lot of parents are going to be asking it: What recourse do you have if you live in a child care desert or you can’t afford the raised tuition?

You don’t have many options unless you have family and friends in your community who you might be able to leave your child with. And it’s going to affect families, household incomes.

If parents can’t get steady employment because they don’t have child care, then it’s going to set them back significantly when we just think about their household budgets and meeting all of their expenses that they have for their family.

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