Hundreds of millions of dollars in federal aid for child care centers across North Carolina will come to an end July 1, creating a $300 million gap in child care funding in the state.
The gap is raising concerns among business leaders, state lawmakers and advocates for the poor that thousands of people will be forced to quit their jobs, or scale back on hours, if they lose affordable child care.
Eshawney Gaston, who has two children and a third on the way, said the hot weather could not keep her away from joining the rally.
In a one-on-one interview with WRAL News, Gaston said she’s worried about the loss of federal child care funding.
Gaston currently works the night shift, making after-hours child care vitally important. Now, she believes that aftercare is in jeopardy.
“I’m trying not to cry … because it is a touchy subject,” she said. “I feel like it is going to ruin my life.”
Hundreds of child care businesses are at risk of closing down, industry insiders and advocates say, unless the state government steps in to replace some or all of the federal money that was approved as part of a pandemic-era relief package. Congress didn’t renew the funding, which will now run out at the end of June.
Democratic state lawmakers say the state has the money to fund the gap and could do so as part of a new state budget, which begins on July 1. But they fear the Republican-led legislature isn’t taking the problem seriously enough.
Many advocates said they have written and called House Speaker Tim Moore in efforts to convince him to get Republican lawmakers to dip into the state’s $1 billion surplus to help fund childcare.
According to Democratic state lawmakers, the state has the money to fund the gap and could do so as part of the new state budget, which begins on July 1.
“This is not just a childcare issue, this is a moral issue,” Cassandra Brooks, another child care provider, said. “This is not a luxury, it is necessity.”
New numbers released Wednesday by the N.C. Chamber show how child care issues impact the workplace and the state economy.
The data shows the state is losing nearly $6 billion in economic impact a year because of a lack of affordable child care, and 35% of parents who experienced difficulty with child care reported leaving the workforce.
Republican leaders have talked of spending hundreds of millions more this year — but they want to send it to the private school tuition voucher program. Senate leader Phil Berger and Moore have each identified that voucher funding as their top priority for this year’s legislative session. Democrats have denounced the expanded voucher program as a handout to wealthy families.
Some GOP leaders have also acknowledged the childcare funding issues and have said it might be included in budget negotiations. But details are lacking.
Budget talks breaking down
There is a state budget already in place for the coming fiscal year. But it doesn’t reflect the $1 billion surplus lawmakers could now spend, since tax revenues in April were higher than expected.
Berger has criticized Moore for wanting to dip into the state’s savings to spend more on “pork” projects — the baseball fields, new police cars and other types of projects that are supposed to be funded by local governments. Such spending is criticized by fiscal conservatives but can be a useful political tactic to garner support for GOP incumbents in an election year. Moore, meanwhile, has criticized Berger for not wanting to discuss the child care shortfalls, or extra raises for state employees.
A spokesperson for Berger, Randy Brechbiel, said in May that Berger remains skeptical of requests for the state to spend hundreds of millions of dollars on child care aid. “Childcare is an important issue, but legislative Democrats’ insistence that the state pick up the tab for the federal government is short-sighted,” he said at the time.
Last year an early draft of the budget by Republicans in the state House proposed an extra $10 million on child care — a fraction of the $300 million industry advocates say will be needed starting this year. The funding was cut from the budget at some point during the secret negotiations between House and Senate leaders.
As for the new budget, Berger has indicated he’d be fine with not updating the budget at all, despite the $1 billion surplus. With inflation continuing to rise, and uncertainty lingering over future recessions, Berger told reporters in May, he wants to be cautious. “Our primary responsibility is to make sure that we can fund the things that we have already promised would be funded,” he said at the time.
Operators of child care centers say federal funding helps them compete on wages for employees. Without the funding. they’d many face the choice of cutting staff, slashing salaries, significantly increasing rates or shutting down.
That 25% average raise from 2019 to 2023 is slightly higher than the 23% wage growth for North Carolina workers overall in that same period. The average North Carolina worker made $59,730 last year, up from $48,550 in 2019.
