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Some federal COVID-era funding for child care providers dries up Sept. 30. What happens next?

A two-story building stands at the end of a cracked driveway with banners hanging from a second-story balcony.
Jose Davila IV
KUNR Public Radio
Leap Ahead Learning Center, pictured on Tuesday, Sept. 19, 2023, in Reno, Nev., received COVID-era federal funding that helped it become more sustainable.

Inside Leap Ahead Learning Center in Reno, a class of preschoolers was getting some energy out by singing and dancing along to the classic children’s song “Head, Shoulders, Knees, and Toes.”

Kim Moore took over Leap Ahead in early 2022. Back then, the center was still recovering from the pandemic. There were only 17 kids enrolled in the program and the resulting revenue was not enough to cover overhead costs.

But a federal grant from the American Rescue Plan (ARP) helped with those costs.

“That grant really helped with putting my feet on the ground and being able to stay afloat,” Moore said.

Moore’s grant ran out last September, but another ARP deadline comes up on Sept. 30. Two other federal COVID-era grant programs targeting child care end the same day. With those grants ending, centers face further cuts into their bottom lines, which can impact workers’ paychecks and parents’ pockets.

That money helped centers like Moore’s weather pandemic stress. Workforce issues were especially pertinent in Nevada, said Marty Elquist, the director of early education and development at the Children’s Cabinet.

“We’ve seen that, when COVID hit and centers closed and then they had to reopen for essential workers, a lot of the workforce left the field,” she said.

That left families without care. Aleph Academy organizational director Sarah Cunin recalled one desperate mom.

“I had a mother come for a tour of our program and she literally started crying to me, and she said, ‘I don’t understand why,’ at that point, we had 85 kids, ‘why 85 children are going to get quality care and my child’s not.’ And there was nothing I could do for her. It was such a low moment for me in this field,” she said.

One child standing on two multicolored tiles while another is looking on. Both are wearing puffy winter attire.
Aleph Academy
Two students at Aleph Academy in Reno, Nev., play hopscotch on March 13, 2023.

At the height of the pandemic, Nevada child care centers could only take in the children of essential workers. Most centers that were open operated at less than 25 percent capacity. Getting the federal funds allowed them to survive.

Providers spent those dollars on emergency provisions, like hazard pay for workers and newly-required personal protective equipment.

Workforce issues, inflation, and market inefficiencies during and after initial lockdowns weren’t unique to Nevada, nor to that particular time period. The privatized American child care market has always been in crisis, said Krista Olson with the Center for the Study of Child Care Employment at UC Berkeley.

“Child cares for the most part operate on razor-thin margins if they make any profit at all,” she said. “So, it was a Band-Aid to get this federal funding.”

She said the free market underestimates the cost of quality child care, forcing educators to subsidize the rest through low wages. Yet, because of the scarcity of supply, child care in Nevada still often costs more than in-state college tuition.

Back at Leap Ahead, 35 kids ages zero through five now come to the center five days a week. Moore and her seven employees lead them through daily lessons, playtime, and quiet time each day. Her business is now more sustainable with the additional kids.

That is not to say that everything is perfect. She wants to expand to new locations but rents remain high at the relatively few places she could open a new facility. And she still struggles with turnover in entry-level positions.

Part of that is due to wages. Elquist said the average wage for Nevada child care workers has risen from $12.50 an hour right before the pandemic to $15 now. But entry-level workers might not make $15 right away.

Megan Hortt, director of Pebbles Preschool in Sparks, said federal funding allowed her to boost wages to bring teachers back and open more spaces.

“You’re trying to solve that problem of not having child care spaces for people because you don’t have enough teachers, so you pay them the higher pay because that’s the solution, right? Some of those grant funds definitely helped make it so that was easier,” she said. “But now that they’re ending, that demand for higher pay is not ending.”

Cunin said her school was and is in a similar situation.

All three child care providers said that they also used the federal dollars to boost the quality of their programs. Moore improved her physical space and bought new equipment. Hortt invested in professional development for her staff. And Cunin was able to hire an extra worker.

“One of them was hiring a floater once our staff did become really big to help us with breaks but also with curriculum time,” she said. “So, every one of our lead teachers gets an hour of curriculum development time a week.”

Aleph and Pebbles have recently raised tuition. They fear losing staff if they return to pre-pandemic pay. Hortt also said that it did not make sense to eliminate spots in her program when the community still needs more spots.

Nevada only has enough child care seats for 35 percent of kids under five that have all available parents working.

The federal investments have allowed the state and its nonprofit partners to take a wider view of the child care system, Elquist said.

“Our system was broken before COVID, and COVID exposed the deep fractures. And this money has allowed us on a systems-level to really address a lot of the things we need to address so we can build a better child care system,” she said.

In general, the statewide projects, like expanding the state’s evaluation program for centers, aim to boost seats, accessibility, and quality of care. Many are funded through September 2024.

Jose Davila IV is a corps member for Report for America, an initiative of the GroundTruth Project.

Jose Davila IV reports on K-12 education with a focus on Latino students and families in Northern Nevada and the Eastern Sierra. He is also a first-year Report for America corps member. Es bilingüe, su familia es de Puerto Rico, y ama los tostones de su padre más que nada.
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