The reopening of Texas child care centers to the children of non-essential workers makes it easier for parents to return to workplaces and for over-burdened and distracted parents working at home to get relief.
While Gov. Greg Abbott’s decision aims at helping workers, employers and the economy, the burden of operating during the pandemic is falling on the beleaguered child care industry.
The announced re-opening of centers to non-essential workers was quickly followed by the Texas Workforce Commission’s decision to phase out emergency COVID-19 subsidies that helped low-income parents and essential workers such as health care and emergency services providers and grocery store employees.
Although payments are allowed to continue for up to three months for essential workers, low-income parents will be required to resume co-pays for their share of tuition costs beginning June 1.
“The decision to roll back some of the state’s support runs the risk of making care unaffordable for many essential employees and forcing child care providers to consider closing their doors,” said David Feigen, policy associate for Texans Care for Children, an advocacy group.
Besides the lost revenue from the emergency subsidies, child care providers must now meet new safety regulations, including social distancing, which come at a cost.
“Child care providers will face increased expenses, but they won’t be able to serve the typical number of children – and generate typical tuition revenue – as they limit enrollment to meet new safety requirements, equip staff with protective gear and increase spending on sanitation,” Feigen said.
Operating on a profit margin of no more than 10 percent during ordinary times, the additional costs for safety measures, lost subsidy revenue and families choosing to skip child care has put many providers at risk of closing permanently.
“It’s a crisis situation,” said Tim Kaminski, owner of the Gingerbread Child Care Centers in the Houston area. “I don’t know if there is a child care center that can operate under these circumstances and still be open by the end of the summer.”
About 37 percent of Texas’ 15,000 child care centers operating before the pandemic have closed, according to child care advocates. About 7,500 of those centers are authorized providers for low-income children and receive subsidized funding (separate from the COVID-19 subsidies) through the workforce commission, according to Kim Kofron, executive director of the Texas Association for the Education of Young Children.
Centers that operate strictly as self-pay are suffering even bigger financial pain as many parents have opted out for safety reasons or to save money as a result of job losses, according to advocates.
For all centers, self-pay and those receiving subsidies, the COVID-19 enrollment limits on school-aged children is a major financial setback.
“The rules have always required tight staffing for infants and toddlers,” Kofron said. “But before the crisis, the ratio for kids 6 to 12 was 1 to 26. Now, it’s 1 to 10. That’s a loss of revenue of 16 kids, which makes a huge difference for providers.”
Although the state’s child care search portal currently lists about 100,000 available child care slots, many parents are still having trouble finding care near their homes or workplaces, Kofron said.
The state has long had “child care deserts,” but the problem has worsened as demand is rising in low-income and rural areas, where providers are most limited, she said.
“It’s safe to say that families will be faced with an additional burden to access child care, while child care programs will lose access to a consistent, predictable revenue stream,” Feigen said.
Many child care centers have obtained federal Paycheck Protection Program loans, but the forgivable loans go mostly toward payroll and provide only limited relief.
The state recently introduced Stabilization Grants of up to $10,000 to help pay operating costs for closed centers that serve low-income children.
While all these measures are helpful, child care advocates say the industry needs a much larger investment from the state or federal government and private employers to remain viable.
Without a financial lifeline, Kaminski said, even well-established, long-time operations like his could be doomed to fail. His 39-year-old business includes child care centers in Richmond and Rosenberg and after-school programs in five elementary schools in Lamar Consolidated ISD in Fort Bend County.
“We have the power to save quality child care centers from being forced to close their doors due to this pandemic,” Feigen stated. “But without sufficient investment, roughly half of U.S. child care capacity is at risk of disappearing.
“That would be cataclysmic for Texas families who rely on their quality child care programs to educate, nourish and protect their children when they are at work,” he said.