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Federal aid for child care providers falls short of projections

Children and their teacher playing with toys at kindergarten
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The final application period for a grant program to aid Montana child care providers remains open through the end of the month. The grants are less than half the amount the state health department originally projected, frustrating some recipients.

The state first announced last year that $61 million in federal pandemic aid Montana received would be dedicated to boost the state’s child care sector.

Kristi Wilson, owner of Kristi’s Kiddie Korner in Whitehall, heard the news during a child care provider town hall with the state health department last October.

“People got off that first town hall and they were like, ‘Holy cow, this is going to change the world.’”

Wilson said she understood from that meeting that the health department was projecting the grants would cover about two years of operating costs for each recipient.

According to the health department, though, the agency underestimated the demand for the grants and the cost of running a child care business. It had to dial back and the grants now cover nearly half of one year’s expenses.

“The grant funds can be used for rent or mortgage and utilities, for payroll and benefits, for health and safety training,” said Patty Butler.

Butler is chief of the health department’s Early Childhood and Family Support Division, and says the grants are meant to stabilize businesses that have experienced volatility since the beginning of the COVID-19 pandemic. Butler says the department had hoped to award one-full year of operating costs, but that wasn’t feasible.

Butler says the average grant size is about $71,000 and more than 500 grants have been awarded so far.

Wilson, the child care provider in Whitehall, says she’s grateful for her award, which covers about six months of operation, but the miscalculation was frustrating.

“On behalf of providers, that was definitely a big shock, a little devastating. But then you regroup and you say, ‘OK, but this is money, this is going to help us.' It’s still a significant amount of money.”

Wilson said she would have provided her staff with raises under the original proposal, but that’s no longer possible with the one-time grant. Instead, she’s using her $48,000 award to offer staff bonuses and to pay for some deferred maintenance, like new siding.

More than half of the kids in Montana who need out-of-home care won’t find a spot at a licensed child care facility, according to a 2020 state labor department study .

Brandi Thomas is with Child Care Connections, a southwest Montana nonprofit that offers support to parents and providers.

“Child care is not a money-maker,” Thomas said. “Everybody kind of thinks it is. They’re like, ‘Oh wow, you’re charging this amount for a child per month, you must be raking it in.’ But if you take out all of the expenses and then paying people, it’s not a money-maker at all.”

The 2021 legislature considered several child care-related proposals, but all failed to advance. Gov. Greg Gianforte’s administration said the federal aid money would instead help solve the problem.

Thomas says these grants are important for child care businesses, but are only a short-term fix.

“The stabilization grants are helping right now, but we need a long-term solution on how we’re going to be able to pay child care workers to stay in the field.”

Thomas said she hopes the state can eventually find a way to supplement pay for providers and their staff. Child care staff earn on average about $13 an hour, according to the job listing website Indeed.

The state is offering two other child care grant programs with awards going to innovative projects in child care and scholarships for parents to pay for care.

Wilson said she hopes people see the value in investing in child care.

“Kids need to be in high quality, supportive environments where they have opportunities to learn. And children from all economic statuses need that,” Wilson said.

The final application period for the state’s child care stabilization grant program ends July 31st at midnight. There are still about 350 providers eligible to apply.

Shaylee began covering state government and politics for Montana Public Radio in August 2020. Originally from Belgrade, Montana, she graduated from the University of Montana’s journalism program and previously worked as a reporter for the Bozeman Daily Chronicle and UM’s Legislative News Service. Please share tips, questions and concerns by emailing shaylee.ragar@mso.umt.edu.