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Millions in federal money meant to boost Montana's child care capacity

Tens of millions of federal dollars will likely be directed toward expanding child care capacity in Montana by doing things like boosting employee wages and reducing families' tuition costs.

The money comes from the American Rescue Plan Act passed by Congress earlier this year, which directs a total of more than $2 billion to Montana. The state Legislature created a set of commissions to vote on recommendations brought forth by state agencies and others on how to spend that money.

The health-focused advisory commission that met Thursday approved the child care recommendations crafted by the state health department. The recommendations now go to the governor, who has the ability make modifications under the law passed by legislators in April.

The commission voted to approve a recommendation of up to $31.24 million for the state health department to administer in sub-grants to stabilize and expand child care in Montana. The committee also approved another $6.8 million to provide administration of the grants, with half of that pot of money dedicated to helping people apply or do things like learn how to better run their businesses.

Most of the committee’s discussion focused on how the shortage of child care makes it harder for parents to spend the day at work. A lack of access to child care in Montana was already hurting parents in the workforce before the pandemic, according to a 2019 report published by the Montana Department of Labor and Industry in partnership with the Federal Reserve Bank of Minneapolis.

That study found licensed child care capacity met less than half of the estimated demand in the state.

“Appropriating the child care funds will also help people get back to work and provide long-term infrastructure investment,” Adam Meier, head of the state Department of Public Health and Human Services, told the commission Thursday. 

While Republican Gov. Greg Gianforte is ending expanded unemployment benefits next week in an effort to push people back to the work force, some are still unable to return to jobs because of a lack of child care.

In a memo to the commission, the health department said at the height of the pandemic 171 child care programs closed in the state.

In building its recommendations for how to spend the federal money, the health department surveyed both parents and child care providers about hurdles to accessing care.

About 42% of parents said they couldn't afford childcare. Thirty-nine percent said they wanted high-quality childcare, but there was a waiting list.

Providers cited workforce challenges like high staff turnover as the major problem on their end of the equation, overwhelmingly saying things like hazard pay, direct care staff stipends, more money for increasing education and training and help with benefits like health care would begin to address issues.

“What we have is a problem in terms of staffing,” said Kelly Rosenleaf, director of Child Care Resources in Missoula. “Child care facilities have about a 75% staff turnover per year. You can't really run a business effectively like that. And the main reason for that turnover is low compensation.”

The health department memo cited low wages as an issue in recruiting and retaining employees, pointing to an an annual median income of $22,860 a year for child care workers.

The GOP-majority Legislature, as well as Gianforte’s administration, has made clear it does not want to create new programs or ongoing obligations with the federal money that might require state dollars down the road, and instead has emphasized the funding should go to one-time only proposals.

The recommendations OK’d Thursday would allow for grants that child care providers could use to increase pay and benefits, provide bonuses, help with the cost of rent for facilities and more. Some Republican lawmakers on the committee raised concerns that could create a “cliff” when the funding expires. The funds have to be directed toward proposals by September 2022 and spent by September 2023. 

Meier said his hope was the money could both solve the current problem and develop a system that could sustain itself in the future without additional help from the state.

“There’s a lot of opportunity to utilize this funding for the best in terms of trying to build capacity so that when this funding goes away, we’ve left an infrastructure much better than we’ve found it,” Meier said.

Collette Box, who is the director of the Discovery Developmental Center in Kalispell, said the federal boost could help buy time to find solutions.

“Providing this window of time to really look at the systemic changes that need to happen in the job sector traditionally subsidized by low wages and high tuition costs for families would help us stabilize this system for the longer term,” Box said.

Montana will get a total of more than $68 million for child care stabilization. The federal government could take back some of the money if states can’t obligate at least half of the stabilization funding by this December, which is why the commission voted on the $31 million recommendation now.

Existing child care providers and ones that closed during the pandemic are eligible for the grants. Another pot of federal money the commission plans to take up at a later meeting could help open new facilities.

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