Will Vermont’s historic investment in childcare pay off?

By Chloe Learey, Executive Director

Published in the Manchester Journal, on October 24, 2023, the Brattleboro Reformer on October 26, 2023 and VTDigger on October 32, 2023.

Headlines across the country are raising the alarm about a looming childcare crisis as federal funding allocated to the sector during the pandemic dried up at the end of September. The truth is that the childcare crisis never ended.

There were not enough slots before the pandemic, and that continues to be true.

Being an early educator is still one of the lowest-paying jobs, even though wages increased during the pandemic. Tuition can cost families more than their rent or mortgage. In 2021, Janet Yellen spoke about child care as a “broken market” that is not working for anyone and identified that it is more of a public good similar to infrastructure like roads and power, given the contributions it makes to economic growth in the present and the future. Making it possible for parents to participate in the workforce today and growing the workforce of tomorrow by giving them access to high-quality early care and learning is a rational public investment.

The pandemic raised awareness about the importance of child care, and the money that was directed towards providers made a great impact. Wages increased, teachers furthered their education, and program improvements led to higher quality ratings. This all happened on temporary funding, which has now ended, so the current alarm is real.

The Century Foundation published a report in June that identified the potential for 70,000 programs to close and 3.2 million children to lose care across the United States with the sunsetting of federal money. Fortunately, some states, including Vermont, have started down the path of making more permanent investments, which could alleviate those numbers.

The Legislature approved a bill last session that puts in motion several mechanisms for improving access to and affordability of child care to families, stabilizing the workforce by improving compensation, and providing financial stability to programs. Act 76 accomplishes this by increasing the number of families eligible for financial aid and increasing the amount of financial aid available, reviewing minimum compensation standards for early educators, and implementing a payroll tax for a Child Care Contribution Special Fund.

Another investment has rolled out in the form of “readiness payments,” which are like stabilization payments received during the pandemic. These were easy to access and flexible to use for whatever the program needed to remain open and viable. Many programs used this to increase wages to attract and retain staff during an incredibly challenging hiring environment, even though it was unclear how to maintain the increase after the funding ended. Investments through Act 76 help ensure wages can remain at a more competitive level.

It is heartening that our state is taking lessons learned from the pandemic and investing in a childcare system that will work for families, children, early educators and businesses as more of a public good. A lingering question is how all the pieces will come together to increase capacity in the system.

In January 2024, childcare programs will receive a 35 percent increase in state reimbursements. Will more programs open because there is more demand and increased reimbursement through financial aid? Will programs be able to find enough teachers?

The implementation of this historic legislation is where the rubber hits the road, and it is likely to be bumpy at times. Overall, there is hope that we are building a better future for us all.