For the first time in years, going back to the onset of the pandemic, North Carolina saw more child care programs close than open this August.
"That is extremely worrisome," said Amy Cubbage, president of the North Carolina Partnership for Children and the statewide Smart Start network.
The state had a net loss of 25 child care programs in August, the most recent month for which data is available. That month, there were 47 closures and 22 openings.
"I expect that that trend continued into September and into October, but we don't have those numbers yet," Cubbage said. "I think it's both the lack of a [state] budget in July and it's also the end of the enhancements that were being supported."
By enhancements, she's referring to stabilization grants that kept child care centers afloat during the pandemic. Those COVID-era federal funds ended last year, and state funding to continue them at a reduced rate ended this past March.
Cubbage said the issue is, child care providers were struggling financially long before the pandemic, and they relied on those funds as their costs have risen in recent years.
"The lack of a state budget means that we're level-funded at a time where we have inflation," Cubbage said. "It's simply not keeping up with the costs that providers have for insurance, for the food that they're providing… and for salaries and benefits."
Child care advocates lobbied for increased state funding this budget session, and with budget negotiations stalled out, many child care providers in North Carolina are facing dire consequences.
The North Carolina Smart Start network has received reports from providers who are struggling to pay their staff. They're getting calls from teachers taking on second jobs to make ends meet, and from providers dipping into their personal savings to pay their staff.
"Some providers are saying that they've had to send notices saying that teachers will be paid late," Cubbage said.
Child care advocates had hoped for new funds in the upcoming budget
Child care advocates lobbied for two major investments in the next state budget:
- The expansion of the WAGE$ program. This program provides subsidies to early childhood educators. The current program, administered through Smart Start in collaboration with Early Years, provides teachers with twice annual salary supplements averaging $1,200 each. Smart Start was advocating for this to be expanded to all counties in the next state budget.
- An update to the state subsidy rate for low-income families. The rate the state pays providers to subsidize child care slots for low-income families is based on 2021 market rates that are now nearly five years old. Both the House and Senate's budget proposals included appropriations to raise that subsidy rate. Child care lobbyists were also advocating for a minimum floor for subsidy rates in all counties.
Federal impacts to Head Start
In addition to the state budget delay, some child care centers are also being hit with a delay in federal funds for Head Start programs. The federal government shutdown has delayed funding to six Head Start providers, some that operate multiple child care sites.
Only these six programs are immediately affected, because federal Head Start grants are disbursed on a rolling basis.
"When a Head Start program receives its funds is not based necessarily on the fiscal year, even though it is a federal grant… but it's based on when they became Head Start grantee," Cubbage explained.
Those six programs serve nearly 2,000 young children in North Carolina. At least 1,100 of those children lost Early Head Start and Head Start services on Nov. 1, while another 756 could lose access in December if the shutdown continues.
