By Rachel Baldauf
Cynthia Mitchell, who has been the director of Beverly’s Day Care in Columbus County for 36 years, has always had a tough job. But it’s gotten even harder since 2020, when the COVID-19 pandemic caused a drop in enrollment and a spike in supply costs.
Funding from North Carolina’s Child Care Stabilization Grants helped Mitchell stay afloat. Since 2021, the pandemic relief program has infused over $960 million into child care centers across the state to pay staff and cover other costs.
Mitchell said she used the money allocated to Beverly’s Day Care to give employees raises and pay for sick leave. “It helped out a lot,” she said.
But money from the stabilization funds is set to run out at the end of June, which advocates say could lead to the closure of as many as 1,500 child care centers throughout the state. Child care advocates are urging state lawmakers to free up money in the budget to keep the program going. The state is projected to have a $1 billion budget surplus this year.
“It’s going to have a big impact,” Neil Harrington, research director at the nonprofit NC Child, said of the funding cliff faced by child care centers. “They’re going to have to cut staff or they’re going to have to increase costs on parents to make up for that lost revenue from the stabilization grants.”
The situation is especially dire in poor communities like those in rural southeastern North Carolina, where families who need child care are already more cost-burdened. In Robeson County, the average household spends 35% of its income on child care for two children, compared to 27% statewide, according to data from County Health Rankings.
Families in Columbus and Robeson counties spent a median $8,262 on tuition at infant day care centers in 2023, up from $7,019 in 2018, according to the U.S. Department of Labor.
Child care centers in Bladen, Columbus, Robeson and Scotland counties have received a total of over $26 million in stabilization funds since 2021. Still, local facilities have struggled to stay open.
Bladen County has seen a 20% decrease in child care providers since early 2020, according to the N.C. Child Care Resource and Referral Council. Scotland County has lost 16.1%, and Columbus County has lost 6.5%. Statewide, nearly 5% of licensed programs have shut down since the start of the pandemic.
Funds running out
The grant money allowed Linda Pollard, the director of All Annie’s Children in Riegelwood, to give her staff raises. On average, child care workers received raises of $2 to $3 an hour in North Carolina as a result of the funds, according to a study by the resource council. .
Pollard said she also used the money to cover paid time off, reduce tuition costs for parents who couldn’t afford it and keep up with the rising cost of supplies. Mitchell said she also struggled with inflation.
“Every time you turn around, something is going up in price,” Mitchell said. “We’re having to get more bleach, we’re having to get more table weights and sanitation wipes and this, that and the other.”
Payments to child care centers began in 2021 using money from the American Rescue Plan Act, a pandemic-era stimulus bill passed by Congress. The funds were meted out using two grant programs: one to help child care centers with operational costs like rent and supplies, and another to help centers pay staff.
The money for operational costs expired last year.
A total of 4,379 programs across the state received $276.8 million in funding for staff compensation and bonuses, according to the N.C. Child Care Resource and Referral Council. These funds are expected to run out by the end of June. Nearly 30% of child care centers in the state said that they expect to close when the grant money goes away, according to a February survey by the council.
The closures would further burden already-strained resources. The number of child care slots across the state are enough to serve only about a quarter of the infants and toddlers with working parents, according to a 2022 report by the Child Care Services Association. In Scotland County, the number of slots can serve only 18.6% of that population.
Child care openings in rural areas are often filled by families who qualify for a subsidized rate. More than 64% of child care facilities in Bladen, Columbus, Robeson and Scotland counties provide subsidized rates, according to the N.C. Department of Health and Human Services. The reimbursement rates for subsidized child care tend to be significantly lower in rural areas than urban areas, Harrington said.
Demand is high. Rhonda Creech, the director of Opening Doors Preschool II in Whiteville, said her center has the longest waitlist it has had in over 30 years. Families are also waiting for spots to open at Pollard’s center.
“I have a waiting list from here to New York,” she said.
Strained resources
Harrington said the situation will only get worse.
“You’re putting more pressure on a system that already doesn’t have enough supply to meet the demand from parents that are working in North Carolina,” he said.
Mitchell said she’s already feeling financial pressure. She lost her funding earlier this year when an illness prevented her from getting her paperwork in on time. Then two staff members left when Mitchell couldn’t afford to increase their pay.
Creech, who used the grant money to give her workers raises, worries what will happen if the money goes away.
“If money got real tight, we would have to take it back away,” she said of the raises. “I’m hoping not to.”
The median income for early care and education teaching staff is $12 per hour, according to a 2019 report by the Child Care Services Association.
“A lot of people can go home and work and they can make $20 an hour,” Creech said. “I can’t pay people $20 an hour.”
While advocates are pushing for the General Assembly to continue the funding, Harrington said grants aren’t the most sustainable solution. Lawmakers could establish a statewide minimum for reimbursements to centers that provide subsidized care, a move that could improve disparities between rural and urban regions.
In Scotland County, the reimbursement rate for infant child care at a five-star center is $880 a month, according to the N.C. Department of Health and Human Services. In Wake and Durham counties, the rate is over $1,500.
“It would bring the amount of money that providers are being reimbursed for providing care to low-income eligible children more in line with the true cost of providing care,” Harrington said.
