Throughout the pandemic, the state and federal governments have approved vast sums of money for Minnesota’s child care system, hoping to stabilize an industry that was ailing even before COVID-19.
One count from last October pegged the influx of funds under the purview of the Department of Human Services since 2020 at $858 million. Despite that unprecedented aid, Democrats at the state Capitol have sweeping plans to spend some of Minnesota’s record surplus on child care, with the aim of helping providers and low-paid employees as well as families struggling with high costs.
The Republican-led Senate, however, has a much different direction. The GOP doesn’t have any proposals for new spending specifically on child care, though party lawmakers are pushing for broad tax cuts this legislative session targeted at helping families, especially amid rising inflation.
Walz, House, spend big
The split over child care is just one of many areas where Republicans and Democrats at the Capitol have starkly different plans. Legislative leaders will have to negotiate over how to use the state’s current $9.25 billion surplus in the last three weeks before the Legislature is set to adjourn. (The DFL child care plans would also tap into a projected additional $6.29 billion surplus in the 2024 and 2025 fiscal years.)
The biggest ticket item in Walz’s child care plan is a huge investment in the Child Care Assistance Program (CCAP), which is the main subsidy for low-income families in the state.
Walz would boost the rates paid to child care providers for accepting families on CCAP. Right now, Minnesota’s maximum reimbursement rates are at the 40th percentile of a market rate survey for what businesses charge to care for infants and toddlers and the 30th percentile for preschool and school-aged children, which are both above a minimum required by the federal government.
But Walz would boost the maximum rates to what the feds actually recommend — to the 75th percentile — meaning tuition costs would be fully covered by CCAP rates at roughly three in four child care providers. Twenty-two states have set all or some of their maximum rates at the 75th percentile or higher, and Minnesota’s rates put it slightly above the bottom 10 states.
Walz would also eliminate a waitlist in CCAP, and expand the program to include foster care families and more. The CCAP provisions total only $188,000 in state money in the current fiscal year in part because of available federal funds but would be significantly more expensive for Minnesota in the following two-year biennium. Over three years, the price would be nearly $820 million.
The Walz plan would also continue some grants aimed at helping child care providers in financial hardship due to the pandemic. The federal American Rescue Plan had money for this purpose, and Walz would keep some cash flowing for the hardest-hit providers after the ARP grants run out.
Another major proposal from the governor is to expand the state-funded pre-K system for eligible 4-year-old children, adding more than 22,000 kids at a cost of $155 million this year and another $370 million in the following two years.
There are other programs aimed at young children and early learners. The Walz administration says total new child care and early education spending proposed by the governor is $1.8 billion over three years.
During an interview Thursday at the MinnPost Festival, Lt. Gov. Peggy Flanagan said the state has tried to respond “in a pretty comprehensive way” to help child care throughout the pandemic. But she said there’s more the state can do to not only help raise wages for child-care workers but also help businesses stay afloat and make care cheaper for parents.
“That was a program that my mom utilized for me back in the day,” Flanagan said of CCAP. She “was able to go back to school, get a better paying job.”
The plan introduced by House Democrats is similar. It would also raise CCAP rates to the 75th percentile and expand the program. The House plan would also reduce but not eliminate the CCAP waiting list. The House would also make bigger stabilization grants for the industry permanent, injecting more into ongoing subsidies that help pay for worker wages and business costs.
[image_credit]MinnPost photo by Greta Kaul[/image_credit][image_caption]During an interview Thursday at the MinnPost Festival, Lt. Gov. Peggy Flanagan, center, said the state has tried to respond “in a pretty comprehensive way” to help child care throughout the pandemic.[/image_caption]
That’s not counting one major House proposal that’s different from the governor’s plan: a tax credit that gives families up to $3,000 for each child under 5-years-old. The program is capped at $7,500 per family and would cost $182 million in the current fiscal year and $377 million over the following two years.
[image_caption]State Rep. Dave Pinto[/image_caption]
“Getting young kids off to a great start is the very definition of a public good, which needs ongoing public support,” Pinto said. “It allows parents to work, employers to hire and communities to thrive now and into the future.”
Senate GOP leans in on tax credits
The Senate GOP, by contrast, has no new spending on child care programs.
Sen. Jim Abeler, a Republican from Anoka who chairs the Senate’s Human Services Reform Finance and Policy Committee, argued the child care sector in Minnesota is stabilized, noting the huge amount of public money already spent on the industry.
[image_caption]State Sen. Jim Abeler[/image_caption]
He also said he believes boosting CCAP rates — which were raised significantly already in 2021 — helps some providers stay open, especially larger child care centers, but doesn’t help families afford the service. Many Republicans, including Abeler, have been more focused on trying to ease regulations on the shrinking number of smaller in-home child care providers, which are more common in Greater Minnesota.
Abeler has unsuccessfully tried to raise the limit on the number of kids workers can look after — which would help businesses make more money. Regulators and Democrats generally have resisted increasing staff-to-child ratios, saying it could be less safe or result in lower-quality care and learning. Abeler also proposed tweaking a formula for stabilization grants in a way in-home providers say would help them financially.
More than anything, Abeler said he’s targeting money on “critically urgent” problems, namely, helping to ease major staffing shortages in the long-term care workforce; the Republican-led Senate has proposed spending about $1.5 billion on the issue. The GOP also wants to use much of the surplus on large, permanent tax cuts, including a reduction in the first-tier tax rate.
The GOP estimates a typical family making $100,000 would get $1,064 in savings each year under their tax plan. “Every year of reducing taxes is a good way to help people enjoy their own money and live within the means that we have,” Abeler said. Walz has proposed one-time rebate checks for many Minnesotans worth up to $500 for individuals and $1,000 for couples.
Pinto made the case in an interview Friday that the long-term care sector and much else rely on child care — both to support parents working in long-term care and to raise the next generation of workers. Failing to invest now will create problems down the road, he said.
Abeler said if he had $100 million, $500 million or $1 billion to work with he’d still spend it on long-term care. “Someone may well think that child care — what the (DHS) commissioner calls the ‘support behind the support’ — is the most critically urgent thing. Well, we’ll have to have that debate.”
FYI, the Federal money will go away but the cost of the programs will not. Just because you have a child it doesn’t mean the taxpayers have to support you. The programs instituted during this 9.2 billion dollars Federal money bonanza will cost billions over the next 20 years. Government Programs do not get smaller and more efficient with time, they grow and grow and grow.
The irony is, of course, that it was the GQP folks who complained the loudest about remote schooling because they missed their publically funded child care.
I wonder if the fact that red states and counties tend to be net recipients of government largess will ever penetrate the shell of delusion in which conservatives live. I guess one argument is that while they are in general more dependent, those areas also have lower incomes, are more poorly educated, have higher teen pregnancy rates, worse health (including maternal mortality), and be higher violent crime rates while imprisoning a larger percentage of their population. Basically, conservatives could imply that receiving government funds is what made them so poor off. Admitting in the process that they are exactly everything they continually say they are against.
Of course, the more realistic answer is that areas run by conservatives are so incompetently managed that their poor results in education, health, and income outcomes mean a larger percentage of people in those areas require assistance. Conservatives aren’t really interested in improving the systems in any way, they are fully willing to throw their neighbors under the bus (or run them over if they are protesting) if it means maintaining their Horatio Alger fantasies. The most laughable example of this is those who complain about any assistance to Ukraine or any other international support by saying that we should “Help people in our own country first” while simultaneously objecting to anything that would do just that.
For a change, I almost agree with you, Joe… The federal money will go away, and in fairly short order, the state will have to live within its means, whatever those means turn out to be. That’s a primary reason why this particular citizen isn’t a fan of long-term commitments to new programs financed from the current surplus. If we’re determined to spend the surplus down, and since it’s one-time money, I’d like to see it spent on one-time capital projects. The state has dozens of bridges, for example, that need to be replaced after decades of neglect. Avoiding long-term commitments based on one-time income, of course, is the primary and overriding reason why Republican proposals for a big, permanent tax cut should be ignored. If it doesn’t make sense to make a long-term fiscal commitment based on temporary affluence, it also doesn’t make sense to make a similar long-term commitment on the tax relief side based on temporary affluence. Sound bytes for the evening news on TV are not a basis for sensible fiscal policy.
“Child care” should be a family decision. I’ve had people working for me who were paying for two kids to be in day care while both parents worked. Whether or not to have a third child would mean deciding that one of the parents would just stay home with the kids because the added child care cost for the third child would have been unaffordable even with their combined incomes. That’s a decision a family should make without government influence.
As it is now, we’re encouraging single mothers to have even more children because the government is covering for their mistakes by subsidizing their child care costs. We shouldn’t be enabling more bad decisions by people who can least afford it. But that’s what democrats do.
So why is it then that red states and counties are poorer and have worse outcomes in health and education while being more dependent on government funding?
Hmm way to “stand for life” Dennis. Do you call the poor kids mistakes to their faces, or do you just tsk tsk and gossip amongst your friends like most snobbish conservatives?
I agree with Joe. This article was a lot to digest, but as I understand it, everybody will get more money. Providers and parents. But the cost ( MN one of the highest in the U.S>) still remains high. So do you keep throwing money at it? Most sensible people would say no. In the House version, a parent gets up to $7500 in credit for children. Isn’t this the same thing as welfare prior to 1995? You get paid for having kids, it didn’t work then and it was abolished.
I think Pre-K programs are great, but I don’t think people should get free ( substantially reduced ) day care. If you can’t afford kids don’t have them.
In addition, I think the state should be doing everything it can to help stay at home Mom’s who have day care at their house. It’s much more affordable. Minnesota is one of the most expensive states in the country for daycare. One Simple Reason. Over regulation. Strict staff/child numbers make it so expensive. Why can’t the state look at what other states do and find something in the middle that brings the cost down while making sure kids are safe? That seems like a good compromise to me.
Just because you have a child it doesn’t mean the taxpayers have to support you.
Just because you own a business, or are wealthy, (or in the case of the latest attempt at conservative pandering) are old and in need of expensive long term care, it doesn’t mean the taxpayers should support you either. Never stopped the cons before. Good to know Republicans “get” who their base is, those on their way out.
It is interesting trying to pay the childcare providers more while allowing the parents in need of childcare to pay less. Seems like the two are mutually exclusive unless a third party steps in and pays for both.
The reason.
Democrats are pro child – every child that is growing up in a family or in foster care or if their parents who hate the idea of having a gay child abandoning theirs to life on the street.
Republicans love other people having babies. They think women should bear them even the crime of incest or rape was responsible for them. As for helping poor parents who struggle to support their children, they do all they can punish them reject paying taxes to give poor children better lives. They do do claiming to be motivated by their Christian beliefs. This is true even though not one of them paid their way for anything they received as a child. Some of them have lacked for nothing in their entire lives.
As long as women have had the option of safely terminating their pregnancies, there has been an uneasy compromise, Should women’s ability to control when she has her children is taken by a conservative US Supreme Court, lower income parents are going to need a lot more subsidized childcare.
They understand that conservative economic interest requires an exploitable underclass. If they can’t force people they hate to have children to create it, they fear their “people” will be forced to. At the core, conservatives are just awful, spiteful, and anti-social. Everything they do is an attempt to improve their standing, at the expense of someone else’s.a
Interesting clash of priorities. Money for daycare for kids or money for long term care workers for elderly in nursing homes. Republicans are stronger in outstate districts where both daycare and nursing home staffing and/or access is critical. Open question whether more government money can induce people to take those jobs in a competitive world. Recently heard a radio ad from a company that is offering in house day care. Huge recruiting advantage for workers with kids.