Governor Walz Announces New $316 Million Program to Boost Pay for Childcare

Governor Tim Walz in Thief River Falls

Governor Walz visited Thief River Falls on Tuesday, October 17. Following a tour of DigiKey, the Governor shared information about the new “Great Start Compensation” program which will provide financial support for childcare providers and early educators.

An October 16, 2023 press release published by the Governor’s office provides details of the program.

Minnesota one of first states to offer direct support to increase compensation

[ST. PAUL, MN] – Governor Tim Walz today announced a new program that will bolster wages and benefits for Minnesota child care providers and early educators, addressing a longstanding workforce crisis that makes it challenging for families to get child care.

Beginning on Monday, Oct. 16, over 8,000 child care providers can begin applying for Great Start Compensation Support Payments. Applications will close on Wednesday, Oct. 25, with the first payments going out later that week.

Vital Role of Childcare Providers 

“Minnesota’s economy doesn’t work without child care providers. Without the dedicated care they provide, parents can’t work and children miss early learning opportunities critical to brain development,” said Governor Walz. “We are boosting the pay and benefits those providers receive to grow the workforce and reflect the critical work they do each and every day.”

Historic Childcare Investment Package

Minnesota is one of the first states to provide direct funding to support the child care workforce. With $316 million over the next two years, and $130 million each year after that, the Great Start Compensation Support Payment Program is a key piece of a historic $1.3 billion package of child care investments signed into law by Governor Walz.

Important for Parents and Providers

“Families are already struggling to afford care, and providers cannot easily raise their rates without losing families,” said Human Services Commissioner Jodi Harpstead. “We know how essential child care is to a thriving economy. That’s why this is so important to both providers and parents.”

Delivering quality child care is expensive, and providers often don’t have enough revenue to cover operating costs and offer competitive wages and benefits. Minnesota’s median wage for child care workers is $14 per hour, one of the lowest median wages for positions requiring at least a high school diploma. For many families, these broken economics have created a crisis. Roughly a quarter of Minnesota’s young children live in areas with a severe lack of child care.

The state is anticipating that better compensation will attract more people to the field of child care, and keep them in those jobs, in turn making it easier for families to get child care.

The Great Start Compensation Support Payment Program builds off Minnesota’s Child Care Stabilization Grant Program, which helped support about 70% of the state’s child care providers during the COVID-19 pandemic. Providers who received stabilization grants were more likely to raise employees’ pay, keep staff turnover down and continue operating.

To provide a bridge from the stabilization grants to the new compensation grants, the state also offered $42.5 million in transition grants for child care providers. Transition grants were available beginning in July through this month.

Monthly Payments for Eligible Providers

The Great Start Compensation Support Payment Program will issue monthly payments to eligible child care providers for increases in compensation and benefits, moving the child care workforce closer to a livable wage. Licensed and certified child care centers must use the funding to increase compensation and benefits, while family child care providers will have more flexibility in how they can use the funds because of their unique business models.

To qualify for compensation support payments, providers must:

· Be licensed, certified, or registered

· Be in good standing with the Minnesota Department of Human Services or their Tribe

· Be open, operating and serving children during the funding period, and

· Meet additional requirements.

To protect program integrity, recipients will also be subject to random audits.

For more information, visit the Compensation Support Payment Program or contact Child Care Aware of Minnesota.

 

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