Minnesota House Considers Aid for Childcare Providers

Minnesota legislators are considering passing legislation that will provide a financial cushion for childcare businesses. HF4133 would provide childcare stabilization grants to providers on a continuing basis.

The bill would remove the sunset date and scale down requirements for the childcare stabilization grant program that was established by the Legislature in 2021 with more than $304 million in federal COVID-19 relief money.

It would appropriate $73 million in fiscal year 2023 for the grants. Base funding for the program would be $153 million in each of fiscal years 2024 and 2025.

Retaining and expanding childcare capacity has become a critical need. A study released March 4, 2022, by a Wells Fargo economist examined labor market data and calculated that the historic drop in childcare employment from pre-pandemic levels is impacting more than 460,000 families across the United States. This is creating a measurable impact on the nation’s workforce, especially women.

The key takeaways from the Wells Fargo study were:

  • No industry is as central to working families as childcare;
  • The daycare industry’s challenges are making hiring more difficult and expensive for all industries right now; and
  • The core issue for the childcare industry is cost.

The Wells Fargo study also found that lack of childcare is more apt to affect working women than working men. The labor force participation rate among men with a child under the age of six was 94.2%, but among women with a child under the age of six, the laborforce participation rate was 66.1%.

First Children’s Finance, a nonprofit that works to increase childcare capacity across the United States calculates a gap of 216 childcare slots in Pennington County. From a workforce perspective, if one factors in the number of people who are commuting into Pennington County to work, the gap is much larger. If the counties that are contiguous to Pennington County are included in the gap analysis, the total gap is 1,966.

Michele Hutchinson, Business Development Specialist for First Children’s Finance reports the loss of 373 childcare programs between June 2020 and June 2021. “Each closure means the loss of jobs, parents struggling to find and afford quality care, and an unstable learning environment for children,” said Michele. “Access to quality childcare and early education is vital to individual productivity and regional economic growth.”

One might ask how this gap can be filled. Both center-based care and family childcare providers play an important role. In Minnesota (as of December 2021) there are 8,460 providers. Of these, 21% are in childcare centers and 79% are family childcare providers.

Beginning in July, new regulations allowing for “Special Family Child Care” will come into effect and may play a significant role in addressing the childcare gap. Under these new regulations, there is more flexibility for special family childcare providers who may be allowed up to four licenses at the same location and certain types of license holders may be allowed to hold up to four licenses. The entity holding the licenses may be an employer, a church or religious organization, or a nonprofit agency.

Childcare has not typically been viewed as part of economic development, but in recent years, that perspective has changed. With an eye on growing the area economy, Advance Thief River has made increasing childcare capacity one of its priorities.

“Quality childcare and sufficient childcare capacity are essential elements of a robust economy,” said Michelle Landsverk, Advance Thief River Director. “We want area parents to be able to fully engage in the workforce. We also want to see each child get a solid start, so they are prepared for success in school and in life. The legislation currently being considered, HF4133, could be extremely helpful in making sure our existing providers are able to stay in business.”

A group of local stakeholders have been meeting over the last several months in an effort to increase area childcare capacity. For updates on what is happening with childcare in the Thief River Falls area, follow @AdvanceTRFChildcare on Facebook.

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