Update: With news that the American Rescue Plan Act (ARPA) is now law, Child Care Aware of America is republishing this resource to support states as they consider spending child care relief funds. ARPA provides $39 billion in child care relief, of which $15 billion in additional funding is made available through the Child Care and Development Block Grant (CCDBG). These funds can be distributed like the December relief funds ($10 billion) and the CARES Act relief funds ($3.5 billion), including towards the proposed policies detailed in this resource. The remaining $24 billion under ARPA will be made available through a separate child care stabilization fund.
Federal support for child care will play a key role in 2021 as states are beginning to tackle their budgets, which have been impacted by the pandemic’s ongoing effects on the economy. With the availability of another round of federal relief funds, states have a critical opportunity to think about what policies are most effective in supporting providers, children and their families in the short and long-term. As states consider which policies to introduce or extend, they must consider two things: how can they best support the stability of the sector now during the pandemic, and which policies will allow for sustainability after COVID-19 is no longer a threat.
The examples shared in this blog support the child care system as it grapples with additional costs because of COVID-19 and pushes for long-term improvements needed to address problems that existed in the system before the pandemic. Advocates, including child care programs and Child Care Resource & Referral (CCR&R) agencies, can share the examples included in this blog with their lead agency staff and policymakers as innovative and effective strategies to consider implementing with new rounds of federal funding.
Nearly $10 billion in funding dedicated to child care was made available under the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021 passed by Congress in December 2020. An additional $15 billion in relief has also been provided through the American Rescue Plan Act, passed into law in March 2021. Like the first round of federal assistance, these recent funds are both made available through the Child Care and Development Block Grant (CCDBG) and intend to provide relief for child care from challenges exacerbated by COVID-19. These funds may retroactively reimburse expenses related to the pandemic. The December law made two requirements that states must follow: (1) state agencies must make information widely available and provide technical assistance to all types of providers regarding the new funds; and (2) some funds must be made available to providers that were not receiving CCDBG funds prior to COVID-19 for supports to maintain or reopen programs.
States have a great deal of flexibility in how they use their funds, but the December 2020 law specifically highlights the following policies that states are encouraged to drive funding toward:
Each round of federal relief funding has left decisions about implementation largely up to individual states; thus, states must consider which child care policies will have the most long-term impact for providers and families. However, it is clear that states need to stabilize and preserve the existing system and now and implement policies that will be effective in ensuring the viability of child care after the pandemic subsides. States will need to adopt or extend policies based upon their own unique needs but should implement policies that provide financial and health supports for providers, children and their families and CCR&Rs. Further, the policies enacted now are an opportunity to shape what is included in each state’s 2022-2024 Child Care and Development Fund Program (CCDF) plans.
Many providers are still in danger of closing their doors because their expenses significantly increased due to pandemic-related costs while their attendance and enrollment dropped (along with their income). Child Care Aware of America’s (CCAoA) 2020 report, Picking Up the Pieces: Building a Better Child Care System Post COVID-19, found that 35% of child care centers and 21% of family child care programs remain closed nationwide over the summer. To address the challenges facing child care, states should consider policies around:
Not only are eligible families unable to find child care, but many families who do not qualify for assistance are still overburdened by the cost of child care. This has only been made worse by the pandemic. State leaders should consider policies around relaxing child absences and eligibility redetermination periods, reducing or permanently eliminating family copayments, increasing the income limits for subsidy eligibility, and allowing essential workers to access subsidy assistance through the duration of the pandemic.
Illinois reduced family copayments to a maximum of $1.25 a month through February 2021, while Alaska is waiving copayments altogether through March 2021. Looking back at 2020, Kansas used its first round of federal relief funding to expand child care subsidies to essential workers by increasing eligibility for health care workers and first responders to 250% of the federal poverty level. Michigan is considering in its Executive Budget to provide additional supports for families by temporarily increasing the income eligibility threshold from 150% to 200%, temporarily waiving copayments through fiscal year 2022, and providing a 10 percent increase in hourly rates for providers.
State policymakers should use federal relief funds to invest in CCR&Rs and their ongoing work to bolster high-quality child care and provide technical assistance to families and providers. CCR&Rs have been key partners in responding to the pandemic (and other emergencies) by effectively distributing cleaning supplies, PPE, and resources including grants and stipends, to child care providers. They have taken on these emergency-related responsibilities while continuing to play a critical role in connecting parents with child care and ensuring communication flows between school districts and child care when schools have needed to suddenly close. They’ve also continued to play a critical role in providing technical assistance and trainings to child care providers to navigate business sustainability.
The language included in the Consolidated Appropriations Act of 2021 explicitly encourages states to use a portion of the funds to deliver technical assistance to help providers with the implementation of new policies. CCR&Rs are ready to provide this assistance to providers but need additional investment to carry out a host of other necessary supports. States need to ensure that CCR&Rs can continue supporting emergency response and preparedness and have funds to translate necessary materials for families and providers. This is especially true as states continue vaccination outreach. California has made the case for CCR&Rs to help with vaccine outreach and response to child care providers. In North Carolina the Division of Child Development and Early Education partnered with CCR&Rs, Smart Start and child care health consultants to get the word out to providers about the vaccine.
Federal guidance is forthcoming, including information on reporting requirements. In the meantime, OCC has encouraged states to work on plans that align with what is currently in statute.
To ensure relief money from both new laws is spent well, active engagement will be critical. Advocates should continue to amplify the challenges and needs of child care providers and families to their state policymakers and explain why long-term investment is needed over temporary changes. Stakeholders should ensure the needs of all providers and families are taken into consideration when considering how these federal funds are used. Further, state decisions should be informed by relevant data regarding the current needs of the child care system, including data that reflects issues relating to access, affordability, and provider costs for all families and child care settings. Advocates can suggest that state agencies submit a survey to all providers (like Alaska is doing), hold stakeholder meetings to hear from providers, or hold provider listening sessions with their governors, state administrators and legislators.
CCAoA continues to advocate for long-term improvements needed to address issues that existed in child care before the pandemic. Share our policy recommendations to build a better child care system in our new report, Transforming Child Care: Cross Community Voices to Inform Change, with your state policymakers.
Please reference the below resources to learn about additional recommendations or how the new federal relief funding could be used: