The headlines started appearing in July and August: A child care catastrophe was looming.
Nearly 1,100 Colorado child care programs would shutter and 83,000 young children in the state would lose care after federal COVID aid expired in September, according to projections from a national think tank.
The numbers were part of a state-by-state forecast put out by the left-leaning Century Foundation in June, intended to sound the alarm about the impact of lapsing funds — the so-called child care cliff. But Colorado officials say the nightmare scenario described in the report won’t come to pass.
“This is not at all what we are seeing in any shape or form,” said Mary Alice Cohen, director of the office of program delivery at the Colorado Department of Early Childhood.
Several factors explain the disconnect between the alarming Century Foundation projections and Colorado’s on-the-ground reality. State officials say they chose to spread COVID relief money for early childhood — about $678 million from three federal packages and $45 million from the state — among many efforts with various expiration dates. At the same time, the state’s new universal preschool program is sending new money into the sector, and some communities are beginning to tap novel funding streams, like lodging taxes, for child care.
State leaders also want to continue COVID-era strategies that made the biggest impact.
“We are going to go after federal grant funding,” said Cohen. “We’re going to work with foundations to see which ones they want to pick up and continue.”
Meanwhile, some experts have raised questions about the Century Foundation’s methodology, suggesting the numbers of potential closures are significantly inflated. The group’s analysis relied on a 2022 survey that asked child care providers whether they would have closed during the pandemic without the help of COVID aid. It didn’t ask about the likelihood they’d close after the pandemic ended and the aid expired.
Julie Kashen, the lead author of the Century Foundation report, during a recent webinar for journalists, hinted that the numbers in the report were meant to push lawmakers to act.
“Congress pays attention to things that are scary. Like, I wish that wasn’t the way of the world but it is,” she said.
Kashen went on to say that while mass child care closures are a real possibility, they’re not a foregone conclusion, and that if they occur, they will happen “slowly and over time.”
Providers knew COVID aid was short term
When the pandemic hit, Jennifer Knott’s child care center in the western Colorado city of Rifle received an influx of COVID aid. The money paid for new handwashing sinks and air filtration systems, gloves, and cleaning supplies. It also helped make up for enrollment losses and covered the cost of the additional staff needed to comply with COVID-era health rules.
“The funding was instrumental in allowing us to make the adjustments that were required to stay open,” she said.
But by the time the funding ran out more than a year ago, enrollment was back up and the center had mostly returned to pre-COVID procedures. Knots, who recently opened a center called Adventure Academy in Grand Junction and has plans for a second one on the same site, said while her margins are thin, her finances are stable.
She wondered if providers facing dire consequences because of expiring COVID aid, “are people that maybe are not running their child care centers efficiently.”
“I’m not sure why people would be experiencing that,” she said.
Leaders of some early childhood councils, which are regional groups that support child care businesses, said while providers benefited greatly from federal money, they knew it was temporary.
“We really haven’t heard the rumblings of, ‘If that goes away, I’m going to close,’” said Stephanie Bivins, director of the Mesa County Partnership for Children and Families, an early childhood council.
Sarah Romack, executive director of the Chaffee County Early Childhood Council, said local providers have “always known it’s one- or two-time funds.” As those dollars run out, she said, “I don’t think they are gonna beat down our doors, like, “What happened?”
In addition, nine of 12 providers in the county participate in the universal preschool program, which means a monthly payment from the state at rates that, for some, are about the same or higher than what they charge in tuition.
Romack said along with the influx of COVID aid, the pandemic put a magnifying glass on long-standing problems in child care, a field notorious for low pay and high turnover.
“We’re starting to have more conversations about compensation and benefits than we ever did before,” she said.
Today, there are glimmers of progress. A Chaffee County lodging tax passed last year will fund a new grant program for child care providers. Local leaders are also talking about building two new child care centers — one in a planned housing development and the other in a housing complex for senior citizens.
Child care still doesn’t pay for itself
For Mary Nelson, executive director of Denver Cooperative Preschool, the federally funded stabilization grant she received during the pandemic did exactly what it was meant to do — shore up her program during a time of financial uncertainty.
She used it to offset a rent increase, pay extra cleaning costs, and beef up end-of-year staff bonuses.
“All of that funding provided a little relief,” she said. “The relief has gone away, but the stress and pressure still exist.”
The true cost of child care exceeds the amount most parents can pay, and as Nelson found out recently, what the state can pay.
She’d hoped to participate in the state’s universal preschool program, but the reimbursement rate was too low — it would have caused an annual shortfall of $85,000. As a result, she didn’t join, and ultimately lost some preschool families and their tuition dollars.
But Nelson doesn’t want to compromise the center’s long-standing priorities, including placing three teachers in every classroom and offering the best staff pay and benefits possible.
“It sometimes makes me wonder how long we can sustain some of these ideals,” she said.
Dora Esparza, the director of business services for Denver’s Early Childhood Council, said many child care providers in the city constantly struggle because they’re “basically selling a service at a financial loss.”
She said of the expiring COVID aid, “I don’t think it’s going to push them over the brink, but I think it’s a return back to being on the brink. That is just the day in the life of [early childhood education] providers.”
Ann Schimke is a senior reporter at Chalkbeat, covering early childhood issues and early literacy. Contact Ann at aschimke@chalkbeat.org.