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Minnesota Taps COVID Relief Funds to Support Children Families and the Child Care Sector

Debra Fitzpatrick is the policy and legislative affairs director of the Children’s Defense Fund-Minnesota.

As states across the country scramble to keep their child care sectors from collapsing amidst the public health and economic fall-out of COVID-19, Minnesota has taken a novel approach to expanding support through the use of federal COVID relief funds. While most states (including Minnesota) have used CARES Act funding provided through the Child Care Development Block Grant (CCDBG) program to support the child care sector, Minnesota has also tapped the COVID Relief Fund.

The CARES Act established the $150 billion Coronavirus (COVID) Relief Fund to provide assistance to States and eligible units of local government to cover expenses that are: incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19); were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020. Minnesota has uniquely made the case that the child care industry is critical to the state’s COVID response and the governor and state have encouraged providers to stay open to serve emergency workers. Other states can and should prioritize support for child care within their COVID Relief Fund plans to ensure children and families can survive and thrive despite the pandemic.

Child care providers face higher costs to operate safely as defined by the CDC and state Health Department guidance, including limiting the number of children and staff in classrooms, social distancing, ramped up cleaning and sanitation regimens, additional sick leave and substitute teacher usage and incentive pay to retain and attract these essential workers that continue to put their lives on the line to serve families and maintain continuity of care for children. Federal Reserve research shows, for example, a cost of $15,000 to $18,000 per month for center-based providers, $1,200 per month for family child care providers, to meet the CDC 10-person pod guidance.

Under normal circumstances, child care businesses operate with slim margins that depend on full enrollment.  While costs have increased, enrollments in Minnesota have reportedly dropped by 75%. State and federal efforts to support small businesses have fallen short for many small businesses, but that is particularly true for child care providers.

For these reasons, with advocacy and organizing by current CDF-MN staff and leadership from former CDF-Minnesota staff Lt. Governor Peggy Flanagan and Children’s Cabinet Policy Director Stephanie Hogenson, among others, Minnesota has advanced a robust multi-pronged approach. Using both new state funding and Child Care Development Block Grant (CCDBG) CARES Act funding, the state provided $40 million in Emergency Peacetime Child Care grants to providers across the state serving essential workers during April, May and June.  Minnesota also used CCDBG CARES Act money to help fund a Child Care Assistance Program provider rate increase; support family, friend and neighbor caregiver networks with grants and supplies; and continue many federally allowed flexibilities to keep Child Care Assistance funds flowing to child care providers and families throughout the pandemic.

Nonetheless, additional child care investments are needed to ensure children and families have the care they need and the Minnesota economy has the child care infrastructure necessary to recover. Looming state budget deficits necessitate creative approaches like Minnesota Governor Tim Walz’s request for $56.6 million of COVID Relief funds to provide monthly grants to licensed child care providers that have remained open and are caring for children. With these funds, the state will provide monthly grants (for three months) of up to $1,200 for open family care providers and $8,500 for open center providers that are providing incentives to working staff, incurring additional costs or have lost revenue. It is estimated that this use of funds will preserve 65,000 child care slots.

Minnesota efforts demonstrate the importance and necessity of dedicated federal funding as states look for ways to save their child care sectors and support children and families as the pandemic rages on.  But states need not settle for funds earmarked exclusively for this purpose. We know child care is an essential part of any state’s response to COVID-19 and will be critical for the economy to rally. Creative approaches to tapping all of the resources available for this fight is critical to the survival of the sector. It is also critical to ensure children and families: those living in low-income households, those from Black, brown and indigenous communities and those in rural areas have the support they need to flourish!

2020-07-22T10:35:38-05:00July 15th, 2020|