Daily Local News (West Chester, PA)
Child care providers decry lost subsidies
Say closures on horizon
Regional child care providers said Friday that they are losing tens of thousands of dollars in state payments that helped keep them afloat during COVID-19 related shutdowns and could be facing closures if new subsidy rules aren’t reversed.
“It’s definitely stressful and it’s definitely not giving us a good picture for the future,” said Erinn Rinn, director of operations for Today’s Child Learning Centers Inc. “I think most providers feel the same way, that we’re just not being supported and we’re not important.”
Rinn was among about two dozen speakers who participated in a virtual press conference Friday organized by Public Citizens for Children and Youth, where regional childcare providers detailed losses they sustained last month.
According to a release from PCCY, 81 providers in Bucks, Chester, Delaware, Montgomery and Philadelphia counties said they had lost a total $1,452,052 in state funding in September as subsidies were recalculated to provide for current enrollments.
“This is more than an economic catastrophe for owners and employees; this maneuver will leave gaping holes in communities where high quality child care provides an educational foundation for children – notably children of color and low-income kids – and are the backbone for Pre-K programs funded by state and city resources,” the release stated.
The Office of Child Development and Early Learning, a collaboration of the state Departments of Health and Education, provides subsidies for childcare to low-income households through a program called Child Care Works.
“Early in the crisis, DHS made the decision to pay providers based on enrollment as a way to sustain the industry through the stayat-home orders,” according to a statement from the department Friday. “But this approach has only supported families that were already receiving services.”
Until August, providers were receiving subsidies based on their enrollment figures as of March 13, said Rinn, though not the copays they might normally have received from families. That changed September 1, with CCW only paying subsidies based on current enrollments.
The idea, according to Rinn, was that there would be an influx of school-aged children at these centers as their parents returned to work and schools reopened in a virtual or mixed virtual/in-person instruction model.
But Rinn said that hasn’t happened. And even for the
few school-aged children that have matriculated to childcare centers, the reimbursement is less. Where centers might get a $200 subsidy for a toddler or infant, for instance, they only get $150 or $160 per schoolaged child, she said.
That comes on top of other losses childcare centers have sustained and extra expenses that have cropped up over the past few months, like personal protective equipment and upgraded Wi-Fi for school children. The centers also did not receive any income from families who don’t use the subsidy while centers were closed through the summer, Rinn said.
Margie Sebastiani, executive director and owner of Sonshine Christian Academy in Drexel Hill, said she lost close to $300,000 between March and July 6, when the school reopened. That money is not something her academy can get back, she said.
Sebastiani said subsidies account for about 20 to 25 percent of revenues at her school, though it might be closer to 90 percent for other centers in the state. Last month, Sonshine Academy took an $18,000 hit. Today’s Child, with multiple locations across the county, saw losses of $120,000, said Rinn.
“The other side of the coin is we don’t have staff,” said Sebastiani. “I literally have 20 families waiting to come in and I have no staff to support it. They have to go home and take care of their own children. The majority of our teachers have to stay home because the schools are closed.”
Full-time staff at Sonshine has been cut in half, said Sebastiani. There are now 24 employees including four in administration. Out of those, 12 are fulltime and the rest are parttime, with some only able to work two days a week.
“A lot of our budget is staffing, because that’s our service,” said Rinn. “What we provide is the teachers, the learning experience, that care and the supervision. We do have materials and we do have rent, but a big part of budget is payroll. We know from past experience that the amounts we’re reimbursed from CCW really don’t provide enough for our staff to have a good living wage, so we’ve always been fighting for that, but now, at this point, nobody is signing up for this job.”
In order to attract new hires, Rinn said the company has had to increase wages, which is another added cost. Today’s Child previously employed 205 people. It is now down to 135. At the same time, the number of children being served has more than halved from 1,200 in March to 502 as of September.
While early drop-offs or pick-ups might have also allowed for a small number of children to be grouped together in one room with a single teacher in the past, Rinn said that is no longer the case, meaning more staff is needed for full days.
Another big potential hit for providers is the virus creeping into classrooms. If anyone tests positive, said Rinn, the center has to close for two days. But the actual classroom has to shut down for 14 days as the entire class is under quarantine.
“You can’t be reimbursed for that,” said Rinn. “Originally, they said they would reimburse you if you had to close your center due to COVID, but that’s not the case anymore.”
Many providers also said state “mandates” about social distancing have reduced their ability to take on new clients. Sebastiani said that she might be permitted for 133 children, but can only fit about half of that in her facility under social distancing rules. Meanwhile, bills remain the same, she said.
“There’s no real possible way for providers to get that enrollment, the same enrollment that we had in March,” said Rinn. “We couldn’t fit those kids in at six feet apart. So there’s no real possible way for us to be open and provide the same level of children based on the rules that we have to follow now.”
Representatives for DHS pointed out that “guidance” informed by the recommendations of the Centers for Disease Control and Prevention and the Pennsylvania Department of Health has been provided to childcare centers – such as sanitation, detection and protective measures – but there are no actual mandated restrictions on child enrollment or distancing.
“Child Care Works are now being used exclusively for the purpose they were intended – to support low-income working families who need child care,” DHS representatives said in a statement. “As family enrollments were updated in September, OCDEL and its partners, the Early Learning Resource Centers (ELRC), were able to move more than 1,000 children from the waiting list, which filled the capacity for available funding. Currently, the waiting list has grown from 109 on September 7 to more than 2,420 today.”
The DHS statement said that extending CCW payments through the end of August was intended to allow child care programs to determine how to move forward and accommodate the issuance of funds under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
“All eligible providers, regardless of CCW participation, have received three distinct payments from the CARES Act, totaling $220 million,” DHS said. “Combined with the continuing CCW payments, more than $590 million in funds have been paid to providers since the COVID-19 crisis began in March. The Department quickly issued the available funds to support the child care community.”
DHS said OCDEL would continue to monitor enrollment and attendance changes, and use that data to inform future policy decisions. The department is also keeping an eye on the proposed federal Health and Economic Recovery Omnibus Emergency Solutions Act (HEROS) Act, which it said may provide additional funds to address continued child care needs.
Meanwhi le, PCCY pointed to a survey from the National Association for the Education of Young Children and a Penn State study that showed health and safety costs for childcare providers had increased by $22 a day per child during the pandemic and that providers statewide saw a minimum of $325 million in new costs and lost revenues.
“Since the start of the pandemic, over 300 providers have closed permanently and another 400 are temporarily closed and it’s unclear if they will ever reopen,” said PCCY Executive Director Donna Cooper. “The Penn State study reports 1,000 more are at risk of closing. Cutting state funds will surely increase this likelihood. The state must reverse the reinstatement of this policy if we want to have child care available for families to return to work.”
According to DHS figures, there were 7,075 licensed child care providers in the state as of March 23. Almost 360 providers have permanently closed since that date for various reasons, according to DHS. There are also 410 providers temporarily closed, though 239 new providers have also opened. As of Oct. 16, there are 6,955 total current licensed providers operating in the state.
But PCCY and childcare providers worry that the combination of increased costs, declining revenues and now cuts to state subsidies will lead to more closures that could disproportionately impact communities that need the most help.
“CCW funding is specifically for low-income, atrisk communities,” said Rinn. “So the at-risk communities are probably being hit the hardest right now. You’re threatening or kind of abandoning the childcare centers in the atrisk communities where the childcare centers sometimes might be the only place where a child can get a decent meal – a vegetable, fruit, protein. That doesn’t always happen at a home in at-risk communities. So it’s something in an economically distressed community already (where) they’re getting hit again.”
Rinn said closures could also have a ripple effect in other parts of the economy. If parents cannot get access to quality childcare, one of them might have to quit their job and stay at home. That parent then might receive other assistance, like SNAP benefits and unemployment. Rinn argued that it would be more productive in the long-run to roll that money into childcare on the front end, allowing parents to keep their jobs, rather than providing them benefits if or when providers have to close up shop.
“At this point with the decreased revenue, it’s so thin,” said Rinn. “If this went on for more than a couple of months, it’s not sustainable.”