Republican Gov. Phil Scott and top Democratic lawmakers have spent much of the 2018 legislative session characterizing themselves as allies and protectors of Vermont’s working families. But none has put forward a plan to address a $9.2 million funding shortfall in the state’s childcare system — which some advocates are calling a crisis.
One legislative priority of Senate Democrats — a bill to raise the minimum wage to $15 an hour — might even exacerbate the situation by increasing the cost of childcare and reducing the number of families eligible for state subsidies.
The underlying problem? Vermont hasn’t increased payment rates for subsidized childcare since 2010. As a result, low-income families find themselves unable to afford high-quality childcare, and providers struggle to make a living. With no significant funding boost in the works in Montpelier, childcare centers must rely on tuition increases, grants and private donations to keep their doors open.
Not all succeed. The state’s most recent data show that 176 childcare centers closed in Vermont during a nine-month period ending in March 2017, while only 90 opened.
“Childcare right now is really balanced on the backs of parents and childcare providers,” said Robyn Freedner-Maguire, campaign director of the advocacy group Let’s Grow Kids, the advocacy arm of the nonprofit Permanent Fund for Vermont’s Children. “The state is not doing enough to invest in our young kids and working families and our professional providers.”
Last year, legislative Democrats and the Scott administration increased spending on the subsidy program by $2.5 million but used the money for direct grants to childcare centers that serve mostly low-income families — not to increase per-child rates.
Scott’s proposed budget for the next fiscal year would continue providing that level of funding with no additional increase.
The subsidy program is designed to make high-quality childcare affordable along a sliding scale. A family of four with an income of up to $72,900 can receive a partial subsidy; families at or below the federal poverty line — $24,630 for a family of four — qualify for full benefits.
Those benefits, however, aren’t working as intended. According to the federal government, which funds half of the state program’s $47.3 million budget, Vermont’s subsidies are supposed to be large enough that low-income families can afford the market-rate tuition charged by 75 percent of the state’s childcare providers.
Instead, the subsidies make only the least expensive care affordable.
“We’re at a point where … on average, our families couldn’t access more than 20 percent of providers [without a co-payment],” said Reeva Murphy, deputy commissioner of the state Department for Children and Families, which administers the program.
The low rate means low wages for providers. According to the Vermont Department of Labor, the average childcare worker in the state makes $26,650 per year. That leads to a shortage of workers and, in turn, childcare slots. The severity of that shortage was the central message in a report this month from Let’s Grow Kids about Vermont’s early childhood education system.
The report, called “Stalled at the Start,” found that 51 percent of Vermont children likely to need care “do not have access to any regulated childcare program,” an increase of 4 percent since 2016. If parents are trying to find care rated four or five stars by the state-sponsored STARS childcare quality program, the search is even more difficult. Seventy-seven percent of kids likely to need care don’t have access to those programs.
Estimates from DCF show that $9.2 million in new funding is needed in order to bring rates up to federal standards. Neither Scott nor legislative leaders have announced any plans to come up with that money this year.
When the state doesn’t pay enough, childcare centers have to choose between charging low-income families out of pocket or finding other sources of revenue.
Burlington’s nonprofit King Street Center is a case in point. On a Friday afternoon two weeks ago, executive director Vicky Smith walked into a classroom where half a dozen preschoolers were playing quietly with a pair of teachers.
“Oh, non-nappers on a Friday!” she said, approaching a 5-year-old preschooler.
“Wanna see my brand-new box?” the girl asked Smith.
Smith bent down to inspect a Nike shoebox decorated with photos of the girl and her mother and asked about its purpose.
“It makes me calm down so I don’t get nervous about my mom so I don’t miss her anymore,” the little girl explained as her teacher looked on.
“Is it helping?” Smith asked.
“Totally.”
Smith stood up as the teacher called the girl away.
“Teachers,” she said knowingly, pointing out that an educator with less training might not have found a creative way to relieve the preschooler’s anxiety.
The King Street Center has a five-star score, the highest ranking awarded. Smith said that score isn’t possible without investing in teachers and facilities.
“This is a really expensive program,” she said, noting that the center was renovated in 2015 and employs a full-time chef to feed the kids.
Employing trained, certified teachers isn’t cheap, Smith said. Childcare centers trying to improve their star rating face an uphill climb. They have to increase spending on staff and facilities in order to improve rankings, but the low state subsidy leaves many scrambling just to stay open. The subsidy rate is higher for centers with high-quality rankings, but it’s still based on 2008 market rates.
The King Street Center charges tuition no higher than the state’s subsidy rate, so qualifying families pay nothing for childcare. For a child attending full time, tuition is about $186 per week, Smith said. The cost of delivering that care is much higher.
“We could never ever make it on what the subsidy pays,” she said. “Not for an hour.”
To make up the difference, the nonprofit relies on other government grants and private philanthropy. If the state wanted to pay the actual cost of providing care at a five-star quality level, Smith said, those weekly payments would have to be closer to $250 per enrollee.
Otter Creek Child Center in Middlebury is in a similar position.
“The state rate of subsidy for most centers comes in lower than what the tuition rate is,” said Linda January, the center’s executive director. “So for us, the weekly gap for infant care — for kids under 2 — is $56 a week.”
When multiplied by the number of children who attend Otter Creek with a subsidy, the financial gap adds up to $17,000 a year, January said.
Like the King Street Center, Otter Creek uses grant money and private donations to cover the financial shortfall. Other providers have closed, unable to make it work.
As a result, high-quality childcare is increasingly expensive and hard to find.
Jennifer Galusha, a single mom in Wallingford, earns too much money to qualify for the full state subsidy. Instead she gets 10 percent of that rate: $16 a week. That means Galusha spends $197 each week for childcare at Home Away From Home, a three-star provider in Manchester Center.
“I’m totaling out over $9,000 a year of my income for childcare,” said Galusha, who volunteers for Let’s Grow Kids. “About 40 percent of my income goes toward my son’s childcare.”
Still, Galusha said the state aid is important.
“Anything helps … As a single mom, $16 a week is worth it.”
While lawmakers do not have a plan to increase childcare subsidies this year, Senate Democrats passed legislation last week to raise Vermont’s minimum wage to $15 an hour over the course of six years. They argue that doing so would help working families. But the bill would also push some Vermonters over the so-called “benefits cliff,” meaning the additional income would render them ineligible for a variety of income-sensitive social programs.
“The real killer in that group [of programs] was the childcare benefit, in terms of the loss people may suffer if they saw their wages go up,” acknowledged Sen. Michael Sirotkin (D-Chittenden), the lead sponsor of the minimum wage bill.
A report from the legislature’s Joint Fiscal Office shows that a single parent working a full-time, minimum-wage job stands to gain $633 in income in the first year of wage increases but lose $765 in benefits, including $469 in childcare subsidies.
Sirotkin said his bill addresses the issue by requiring the state to continue providing childcare benefits to families earning the minimum wage, even as their incomes rise. However, the legislation doesn’t specify a source of funding for the expanded eligibility. Sen. Richard Westman (R-Lamoille), who sits on the Senate Appropriations Committee, said he’s not confident the state will find the money to pay for that increase.
Business leaders say the cost and availability of childcare has become an obstacle to workforce development. In an op-ed earlier this month, Lake Champlain Regional Chamber of Commerce President Tom Torti called for more investment in early childhood care.
“Even when parents are able to juggle family and work, productivity and focus can suffer due to the stress of paying for childcare or worrying about their children during work because they were unable to find an ideal childcare situation,” Torti wrote.
In an interview, he said the chamber’s members tell him regularly that lack of childcare, or lack of affordable childcare, is becoming a staff recruitment and retention issue.
“It comes up over and over and over again,” Torti said. “The fact that people, as soon as they know they are pregnant, have to go out and start looking for daycare, and sometimes pay months [in advance] … to have a daycare spot, is just crazy. I could use more colorful words, but, really, it is not a good system.”
Galusha, the Wallingford mom, said the state isn’t going to escape its economic problems by continuing to underinvest in young children. When asked about the governor’s emphasis on making Vermont more affordable, she didn’t mince words.
“[Scott] needs to start with the children,” she said. “I mean, you can’t have Vermonters staying in Vermont if they can’t afford to have a family.”
This article appears in Feb 21-28, 2018.
Got something to say?
Send a letter to the editor and we'll publish your feedback in print!
“Childcare right now is really balanced on the backs of parents and childcare providers,”
What a stupid comment. Childcare SHOULD be balanced on the backs of parents and providers. While some may need some help, this notion that taxpayers somehow OWES it to parents to pick up the cost of childcare is just really absurd. For the most part, no one forces parents to have children and society should not be expected to pick up any share of that burden. When the state taxpayers agree to pick up a share of that burden, it should be met with gratitude rather than further grasping and whining.
While you make a good point Roy I have to ask , by your logic why should taxpayers fully fund public schools . Is there an inherent difference between childcare and elementary schools ? The kids are older but the need for quality care is the same .
One factor overlooked in closing of the 176 childcares is impact of Peter Shumlin and his signature on Sarah Buxton’s unfunded universal pre-k legislation. Act 166. It had temporary federal grant that will now expire this year and put that funding requirement on all Vermont taxpayers. Related rulings from Shumlin administration imposed over 100 pages of new regulations. Unbelievable minutiae such as daily cleaning of refrigerators; and big impact stuff like new employee education requirements (that both hurt immigrant refugee run childcares; & also essentially ruled that 55 year old women who had raised 5 of their own children successfully but who did not go to college were no longer “qualified”).
Speaking as parent of former preschooler who lived through this, I can tell you the 55 year old woman is just as qualified as 26 year old who just finished child development graduate degree but no real world experience. Both are valuable.
After Act 166, costs went up (to comply with unfunded mandates); childcare workers generally not making more $; and many places closed because of the new burdens (putting those workers on street and leaving parents to hold the bag). “Subsidy” to parents was eaten up by childcares having to increase costs to comply.
Whether intended or not, Montpelier has done real harm here. It is not the state’s responsibility to raise our children. Let’s repeal Act 166 & let hundreds of childcares open back up to help families & children across the state.
Senator Sirotkin has generally been great in terms of privacy issues and Ralph Nader-esque consumer-focused issues. Seeking to protect consumer data, for example, in wake of Equifax hack.
However, we are already in insane property tax environment of ever rising taxes, and Senator Sirotkin now wants additional unfunded childcare mandate? Shouldn’t we know how it is going to be paid for before passing it?
K-12 statewide enrollment declined from 107,000 in 1997 to around 85,000 now but taxes keep rising. Coincidentally, Brigham decision that began consolidating school funding power in Montpelier and away from local school districts was issued in 1997. May have made sense then but proven disastrous over 2 decades. Zero transparency on property tax bills. No disclosure on how much money is going to your own school district versus to Montpelier.
Some legislators want to shift education funding to statewide income tax, which is even less consistent year to year than property tax (and encourages geographically mobile higher income people to flee Vermont).
Perhaps instead we should stop passing unfunded mandates? And fund our K-12 schools the way nearly every other place in the nation does. Locally.
The state can help themselves by not funding child care for people that don’t work. If they collect social services then they can get free child care. Why would you need child care if you don’t work. Leave the space for those who do work and need the help.
Daycare is and always has been a social experiment based on the misguided notion that two wage earners in the home would double the household income. Instead, it doubled the workforce and allow business to pay less than a “livable wage” ( livable wage meaning a sufficient income for a single wage-earner to support a family). Now, it has evolved into just another form of corporate welfare, where taxpayers are forced to contribute to an employee’s income, allowing businesses to suppress wages.
Here’s plan: Cut school budgets by increasing class sizes etc. and use the savings to pay for daycare. We can even rent out shuttered school as daycare facilities. This would make the plan revenue neutral. (WIN-WIN)
Is the Taxpayers’ Pre-K Investment Paying Off ?
The prestigious Brookings Institutes analysis of the Department of Health and Social Services double-blind test of the persistence of the benefits of Head Start found that, that beyond serving as a daycare convenience, There is no measurable advantage to children in elementary school of having participated in Head Start. Further, children attending Head Start remain far behind academically once they are in elementary school. Head Start does not improve the school readiness of children from low-income families.
A great effort was made to moderate the disastrous study results by speculating as to unproven long term sleeper effects postulating that long term effects of early intervention that appear after initial measurable effects have dissipated, perhaps mediated by improved socialization and emotional strength that do not show up in formal assessments of preschool children.
The Brookings analysis concludes: methodologically rigorous longitudinal studies of the impact of early intervention programs have consistently found effects that persist into the elementary school years, whereas Head Start does not show these persisting effects. The U.S. Department of Health and Human Services is grasping at straws when it tries to explain away the disappointing findings of its own study of Head Start by appealing to sleeper effects. Why not follow Occams Razor: Among competing hypotheses, the one that makes the fewest assumptions should be selected? The most parsimonious explanation of the findings from the follow-up of the Head Start Impact Study participants is that Head Start has no long-term impact.
Taxpayer investments in pre-K and Head Start programs should be based on their worthiness and productivity not on the feel-good outcomes of providing low income families with low cost daycare (especially those families where the parents are not working) and providing a new membership pool for the VT-NEA.
https://www.brookings.edu/research/can-we-…
The erroneous information offered by Brooke Paige, below, was debunked years ago. Head Start is designed, in part, to help prepare children for successful transition to kindergarten. To suggest that Head Start children from low-income families do not do as well academically in elementary or high school as their higher-income peers is not due to any lack of efficacy of Head Start, but due largely to the conditions of poverty which persist for these children. To suggest otherwise is to suggest that a child from a low-income family who is fed a nourishing breakfast should not be hungry come dinner time.
Recently studies emphasize Head Start’s long-term, beneficial impacts for children and families. The Brooking Institution’s Hamilton Project (2016) (http://www.hamiltonproject.org/assets/files/long_term_impact_of_head_start_program.pdf) presented the following key findings:
– Head Start improves educational outcomes increasing the probability that participants graduate from high school, attend college, and receive a post-secondary degree, license, or certification.
– Overall and particularly among African American participants, Head Start facilitates social, emotional, and behavioral development that becomes evident in adulthood measures of self-control, self-esteem, and positive parenting practices.
The groundbreaking study, The Lifecycle Benefits of an Influential Early Childhood Program (2016), by Nobel Laureate economist James Heckman, found that high-quality birth-to-five programs for disadvantaged children, like Head Start, can deliver a 13% per year return on investment. Significant gains are realized through better outcomes in education, health, social behaviors, and employment.
High-quality early learning programs like Head Start have positive effects on children’s academic and behavioral skills; can reduce grade retention, teen pregnancy, and the need for special education services; and can increase lifetime earnings and reduce crime. There is a reason that Head Start has had bipartisan support for 50+ years. It is one of America’s most successful and enduring initiatives to improve the lives of children, families and communities.
People continue to use the word “daycare” as an umbrella term for early education centers and preschools. The MAJORITY of us working in this field are highly trained, early education professionals and would like to be viewed as such by our communities and government. We wear many hats as educators and put in long hours not only caring for children’s basic needs, but developing curriculums, implementing lesson plans, and curating nurturing environments that evoke children’s curiosity and promote early learning. The early years serve as a critical time to address health concerns, cognitive/learning disabilities, speech delays, and behavioral problems…By working to get children special services during the early years, we are better serving children, families, public school educators and early interventionists working within public schools for years to come. The first five years of a person’s life are the most crucial in terms of physical, cognitive, and social development. The science is there. Early Childcare centers and Preschools are more than just daycares, they are places where learning is actively taking place every day and should be considered great assets to our communities, regardless of whether or not you are a parent.
These services should be publicly funded, and we should not do so but offsetting the current school budgets and maxing out classrooms…Do we all know what happens when budgets are cut and classroom sizes increase? Para jobs are cut, and teachers are expected to teach in classrooms where they spend more time maintaining quality control than actually teaching. What happens then, to the average class with 3-5 children on IPDPs that need support?
Our society needs to shift away from the idea that early childhood education services are of lesser value than primary education. The quality of the foundation dictates the quality of the resultant structure of our youth’s education. At what point do we acknowledge humans are beings capable of learning and socializing? Most would argue…from day one. Why then does the general populace consider early childcare a parental “perk” rather than an investment in our collective future?
“The MAJORITY of us working in this field are highly trained, early education professionals and would like to be viewed as such by our communities and government.”
Which might have something to do with why it is so expensive.