The Child Care Blindspot: The Policies We Need to Stave Off Crisis and Build a Working System

11.01.2022 - LISC Stories

Child care and early learning programs, at their core, play a critical role in the development of young children. They operate at a critical nexus – the intersection of economic development, caregiving and educational systems – offering opportunities to children, families, women, employers and regional economies. After years of impassioned federal policy advocacy, I probably recite the benefits of quality care in my sleep:

• high quality child care promotes positive development in young children;
• affordable child care can raise labor participation and productivity; child care businesses are crucial to promoting healthy local economies;
• and child care facilities are essential to promoting health, safety, and strong early learning experiences.

So why are families still struggling to find safe, affordable, quality care in appropriate spaces? And why are child care systems poised to plunge into utter chaos within two years when COVID resources expire? Most important of all, what can be done to address these issues? 

The full answers to these questions require an analysis of our country’s child care financing blind spot—the historic, persistent public underfunding of the sector. That blind spot is both founded in and exacerbated by the racial and gender discrimination that continues to plant obstacles in the way of child care business owners; the lack of capital made available to the sector by traditional financial institutions; and our society’s insidious devaluation of children, women, and care giving.

But a more immediate answer is that the sizable, long-promised and widely-promoted federal investment in child care – which includes resources for facilities – has not materialized. And COVID recovery resources, which have only begun to scratch the surface of need, come to an abrupt end in 2024 (an estimated $48 billion funding cliff). Families, providers, and communities are trapped in a seemingly endless loop of uncertainty and instability. 

So how do we even begin to address the child care blind spot? The task is large but not insurmountable. We can start with some commonsense approaches.

First, the liquidation timeline for child care recovery dollars should be extended to better align with the current deployment realities facing states, providers and communities.

Child Care Development Fund (CCDF) resources under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA), and the Child Care Stabilization Grants must be liquidated in less than one year – by September 2023 – and American Rescue Plan Act (ARPA) CCDF Discretionary Funds must be liquidated by September 2024. The abrupt liquidation timetable attached to COVID recovery dollars administered by the Administration for Children and Families is adding to the frenzy in states around the funding cliff and undercutting some of the innovative ways that resources are being deployed.

For example, in addition to expanding child care subsidies so that more families can access care, and delivering funds to child care workers directly in the form of higher pay and expanded benefits, several states are also utilizing child care recovery dollars to address facilities needs. The administering state agencies have gone through the time-consuming and painstaking task of vetting allowable uses of funding (most know more than they would like to about when an egress or solar panel is considered major construction) in order to meet the needs of children, providers, families, and communities. 

These recovery resources only scratch the surface of need for workforce and facilities funding, and take time to put to use. Given the complexity and nuance of funding liquidation – including the shifting provider landscape, and issues that significantly impact facilities projects like supply chain issues and inflation (which makes materials and goods more expensive) – states should be allowed more time to utilize these funds that simply require more time to thoughtfully and strategically deploy.

Second, congressional leaders need to make good on their stated commitments to revamp our broken child care system. Furthermore, they must ensure that new investments do not reinforce a scarcity model that puts essential components of the child care system –workforce investments, business capacity building, facilities resources – in competition with each other.

Gaps in federal policy make it harder for states and providers to address some of their most pressing needs. Eighty-eight percent of child care providers are using child care stabilization funds to help pay personnel costs and keep programs staffed. We cannot stress enough how devastating the effects of low wages and inadequate compensation are on child care professionals and the availability of care in our local communities.

In order to stabilize the sector and expand the availability of child care – the system needs to be funded differently. Child care operators must receive the supports required to cover the true cost of quality care.  As it is now, most are subsidizing their operations by paying themselves and their staff paltry salaries, and/or by deferring facility maintenance and forgoing quality improvements. Additional dollars need to be made available to support innovation and access, so we aren’t facing, yet again, decades of the same challenges. Let’s move beyond the current framework and effect change. 

Third, Congress needs to establish dedicated stand-alone funding for child care facilities.

CCDF resources cannot be used to support facility acquisition, construction, or major renovation (except for the flexibility provided to Tribes and Tribal Organizations). It is well documented that quality facilities play an imperative role in helping existing providers serve additional children, and allow new providers to start their businesses and serve families.

Yet despite the weight of these facts, and ongoing advocacy, there are still no dedicated, stand-alone federal resources to support the acquisition, construction, or renovation of child care facilities. LISC is on the front lines of early childhood facility policy, financing, and practice. In our estimation, Congress must act to address the serious funding flaws in the child care system that directly influence the availability of quality care—and ultimately, the health and wellbeing of communities.

About The Author

Nicole Barcliff, Senior Policy Director
With two decades of public policy experience, Nicole Elizabeth Barcliff joined LISC in November 2012. As a Senior Policy Director, she advocates for federal policies that support LISC’s mission to forge resilient and inclusive communities of opportunity across America – great places to live, work, visit, do business and raise families. Nicole works closely with LISC national programs, LISC local offices, and a broad cross-sector of organizations to develop legislation and implement policy advocacy agendas that promote access to equitable opportunity in local communities. Her priority policy areas include safety and justice, health, and child care and early learning. Prior to joining LISC, Nicole held various positions that helped shape her federal policy expertise, including serving as Legislative Director for a member of Congress in the U.S. House of Representatives, Vice President for Education Affairs at the Motion Picture Association of America (MPAA), and Senior Associate for Government Relations at the Pew Charitable Trusts.