Where the state budget falls short for young children and families

Under-investment in early learning opportunities for young children hampers kids’ development and parents’ ability to get back to work.

By: Elizabeth Byrum | August 2021

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The state budget presents an opportunity to make vital investments in programs that support children, families, and communities such as early childhood education. Despite a record state surplus and an unprecedented amount of federal COVID relief dollars, the Senate did not make substantial recurring investments in child care that prioritize the sustainability of the system. And when the House passed its budget proposal last week, we unfortunately saw limited improvement in the early childhood education investments that help our youngest kids thrive.

This week the House and Senate begin negotiations to reconcile differences between their two versions, and finalize the state budget. Once they come to agreement, the budget package goes to the Governor for his consideration.

Read our full budget analysis here.

While there were some bright spots for child care, including recurring funding for Smart Start and NC Pre-K, we know that much more needs to be done to support struggling teachers and programs. Many are on the brink of leaving the sector and closing altogether. Now more than ever, we need our legislators to use historic revenues to address the long-standing issues plaguing child care, and help the system survive in order to serve more children in North Carolina.

North Carolina’s early childhood education system has continually been underfunded, receiving less than 1% of the state budget each year. Without significant recurring funding, the system is at risk of crumbling during a time when kids and parents need it most. Here are our recommended areas of investment for North Carolina’s early childhood system:

1. Increase child care subsidy rates

Child care programs have stepped up to stay open during the pandemic despite lost revenue and health concerns. A key way to sustain child care programs is to raise the subsidy reimbursement rates that providers receive. In rural counties, a rate increase could equal several hundred more dollars per month per child served. Read more in our fact sheet.

We’re disappointed to not see any rate increases or the proposed statewide floor included in either chamber’s proposed budget. More than 20% of child care programs are concerned about keeping their doors open for another six months. Additional revenue each month will help providers sustain their programs, pay teachers higher wages, and enhance program quality. Increased subsidy rates would also make child care more accessible for families, by encouraging more providers to serve children who receive child care subsidies.

TAKE ACTION – Use this simple form from our friends at the NC Early Education Coalition to contact your legislators.

2. Improve compensation for early educators

Early childhood teachers have one of the most important jobs in our state, and have continued to work on the frontlines throughout the pandemic. These educators make less than $12 an hour on average, with few or no benefits. This makes it incredibly difficult for child care providers to recruit and retain good staff. Right now, 82% of child care programs are facing a staffing shortage, and many programs are closing classrooms that cannot be staffed.

While the American Rescue Plan funds designated for the child care workforce are helpful, this is a long-standing problem that needs a sustainable solution beyond one-time dollars. Recurring investments in compensation strategies such the WAGE$ salary supplement program can help ensure that qualified educators stay in the field.

3. Expand child care subsidies for working families

The cost of child care far exceeds what most families can pay. Average child care fees in the state are more than the cost of tuition at our flagship universities. Many parents are desperate to go to work and support their families, but cannot afford the child care they need to do so. More than 20,000 low-income children are currently on the waiting list for child care subsidy. Pre-pandemic, that waitlist hovered around 30,000 children.

The American Rescue Plan relief funds will help additional eligible families access care in the short-term, but we need a long-term investment for the future. It’s time for the legislature to commit recurring state funds to fully fund the subsidy program, and let parents go to work.

We have the funding we need to make a robust investment in child care that address all of the above strategies. Supporting the workforce behind the workforce and helping families get back to work is essential as we continue to recover from the pandemic. However, we won’t have a successful recovery if our state legislators continue to ignore the need to invest significantly in early childhood.

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