NC child care leader warns of looming financial crisis
A new survey shows nearly one in three child care providers in North Carolina could be forced to close their doors this year without additional financial help from the state or federal government.
The survey, commissioned by the North Carolina Child Care Resource and Referral Council, an advocacy group, asked providers how they plan to manage the upcoming end of federal COVID-era stabilization grants that helped raise wages for teachers by 2 to 3 dollars per hour.
88% of respondents said they will have (or have already had) to raise tuition to cover the loss, and 29% – more than 1,500 providers – said they may go out of business. The group estimates that could leave more than 91,000 children without care.
Advocates are asking state lawmakers for $300 million to maintain the wage support provided by the sunsetting federal grants for another year. But even with that support, providers are closing their doors because of staffing shortages and rising costs.
State child development and early education director Ariel Ford discussed the crisis with state lawmakers at an oversight committee hearing Tuesday. Ford said changes need to be made across the system to keep it financially viable, including changing the rating system for child care programs, increasing the value of state child-care subsidies, and increasing the pay and benefits for teachers and staff.
"We are tipping over the edge of that cliff," Ford told them.
She said the average pay for a preschool teacher in this state is $14 per hour, far less than they could make in retail or customer service.
"Programs have had to raise tuition. They're having staffing shortages because of the wages. And they're under-enrolled, because they can't hire enough staff to keep classrooms open," Ford told lawmakers.
The state child care subsidy, she said, reimburses childcare providers only between 30% and 50% of the actual cost of providing care.
According to Ford, the cost for a year of NC Pre-K, the state-run program for the lowest-income children, is $11,330, but the state funding for it is $5,450 - less than half of the actual cost.
"You can't operate a business at 50% of the cost when you are going 50% in the hole every year," Ford said.
