Child care centers in Charlotte are “in crisis”

Pandemic-era federal grants that helped North Carolina child care centers stay afloat these last few years run out at the end of the year.

Why it matters: Without additional funding, centers in Charlotte and beyond say they could lose workers or close their doors.

• “The industry is in crisis,” says Pathway Preschool Center director Emma Biggs, who has been in early childhood education for nearly three decades.

Driving the news: On April 20, several child care facilities across Charlotte will close as their staffs travel to Raleigh to implore lawmakers to increase funding for the industry.

What’s happening: Child care centers in Charlotte have been struggling for years, beset by razor thin margins, surging demand for care and rising rents. Then the pandemic came, bringing with it staff departures and revenue losses as enrollment declined.

Federal stabilization grants covered two areas for child care centers: Fixed costs and salaries.

• Fixed cost grants helped offset the rising cost of operating a child care center. Insurance, food, rent, supplies, electricity and taxes have all risen in recent years, for instance. Those grants expired months ago.
• Compensation grants bolstered salaries for child care professionals. In many circumstances, teachers went from making $10-$12 an hour to $13-$15 an hour, says Janet Singerman, president and CEO of Child Care Resources Inc.

Compensation grants are set to expire at the end of 2023. Industry leaders fear they’ll lose teachers as a result. “Do we really expect our child care educators to go back to a $10-12 an hour wage?” asks Singerman.

• “Those who teach young children can’t afford to earn less. Program operators can’t charge more and expect to stay in business,” she adds.

More than eight in 10 providers child care providers say they would not be able to maintain current teacher salary levels or were uncertain if they could do so once stabilization funding ends, according to a new survey by the North Carolina Child Care Resource and Referral Council.

• Care providers say were most likely to say that it would be difficult to hire comparably educated and experienced staff and that they would have to increase parents’ fees without additional funding, per the survey. 

At Pathway Preschool in east Charlotte, director Biggs has had to close three classrooms because she can’t find enough teachers.

• In recent years, she’s lost employees to higher paying positions, including at Target, Amazon and nanny sharing.
• “Until (lawmakers) can help us invest in our staff … we’re going to continue to have well-seasoned employees leave us,” Biggs tells Axios.

Her infant classroom, which has a capacity for 10 babies, has a waitlist with 42 families on it. Pathway recently reduced its hours, too — previously it was open from 6:30am-6pm, but now it operates 7:30am-5pm.

By the numbers: Child care centers have had to raise tuition to cover operating costs as fixed cost grants ran out, Singerman says.

In March 2023, the average cost for an infant in a child care center was $15,509 per year in Mecklenburg County. That’s up from $13,208 in February 2020, per data from Child Care Resources.

• For a toddler, it’s $15,158, up from $12,844 three years ago.

At its child care facilities, the YMCA of Greater Charlotte has made “small adjustments to participant cost based on the rate of inflation and increased staffing costs,” according to Adrianne Hobbs, the Y’s VP of youth development.

Yes, but: The Y hasn’t had to cut programs or reduce hours in recent months, Hobbs says.

• “When it comes to recruiting, we find that potential employees are attracted to the bigger story of our mission and the impact we have on our youth and community,” she adds. The Y also offers benefits including free membership and discounted programming.

The big picture: Child care underpins the economy, advocates note. Having quality child care is necessary for working parents to maintain a job.

• “For workers who have young children, work isn’t possible unless you have someone to help care for your children,” Singerman says.

State of play: Gov. Cooper’s proposed budget includes $1.5 billion in additional funding for child care and early childhood education.

• Part of that is NC Child Care Stabilization Grant funding, plus $200 million to increase child care subsidy rates in rural and lower wealth communities.
• The House budget, which was approved this month and now heads to the Senate, marginally increases child care subsidy reimbursement rates. But it’s not enough to offset the loss of the compensation grants, advocates say.

Of note: House Speaker Tim Moore’s office did not respond to a request for comment.

“Many of these child care centers are barely hanging on and legislative Republicans want to throw them off a cliff when federal funding runs out later this year,” Cooper tweeted earlier this month.