For the last few years, eligible child care providers in Utah have received hundreds or even thousands of dollars each month to stay afloat thanks to federal pandemic relief funds. But starting in October, those payments will go down by 75%. That will impact more than 900 providers statewide. The funds will completely disappear in June 2024.
Some providers have already said they will raise tuition in response to the cuts. Child care advocates anticipate that some will decrease their capacity while others might have to close all together.
Utah’s Office of Child Care has received $573,873,964 through multiple rounds of federal COVID relief funds, according to office director Rebecca Banner.
The state set up several programs with the funding, including efforts to increase the number of child care providers and reduce costs for low-income families. Banner said a significant chunk of that money went to help child care providers, first through an operations grant and then through a $250 million stabilization grant.
With that grant, eligible providers could receive a base rate of $350 per child multiplied by their license capacity – meaning the maximum number of children they can provide for at one time. Providers could receive even more if they agreed to pay over half of their staff at least $15 an hour.
A deadline for spending most of those federal dollars is coming up in September, although Banner said her office will still have a pool of money that won’t expire until September 2024. Banner said the state has not given her office funds to offset what will be lost when the federal funds go away.
Jenna Williams, a policy analyst at the advocacy nonprofit Voices for Utah Children, said for the last year she’s heard from providers who are anxious about what the fall will look like. Some, including PC Tots in Park City, have already announced tuition hikes due to the loss of federal pandemic relief funds.
Jennifer Peard, the owner of Nanny’s Nurturey in Logan, told Williams they will be raising their rates in October by 10 to 20% in order to be able to stay open. Williams has heard from several child care providers that also plan to raise rates. She said she also heard from one Salt Lake County provider who has already seen one family leave because of the increased rates and anticipates more will follow.
The stabilization grants were meant to help the child care sector during the pandemic, but Williams said the industry was already on shaky ground before the pandemic. In 2021, the Department of Treasury called the nation’s child care system “unworkable” and did not adequately serve many families.
According to recently released data from the Annie E. Casey Foundation, center-based child care, on average, costs a Utah family $9,003 annually. That’s 24% of the median income for single mothers in Utah and 9% of the median income for a married couple. If providers increase their prices, care will become an even bigger strain.
Williams said the child care industry “will continue to be unstable when this money ends. And so it’s really a question of do we want to go back to what it was before because it wasn’t that great.”
The Century Foundation, a progressive policy think tank, predicts that 35,614 children in Utah will lose child care when the federal funding does dry up. It also forecasts that 663 child care programs will close.
Williams said this wouldn’t just affect parents, but it would negatively affect Utah’s workforce if parents have to stop working because they can’t afford child care. She would like to see the Legislature step up and fund something like the stabilization grant program and a wage supplement program for child care workers.
“I think that in Utah, no one's really taking ownership over the problem. I think the state government thinks it is the role of parents, but they can't afford it,” Williams said. “They think it's the role of businesses, but they can't afford it … This is not something that will resolve on its own. It's something that requires state investment.”
