Although the vast majority of child-care programs opened back up after the spring stay-at-home orders lifted, many daycare center and preschool owners are taking on huge financial losses — both personal and professional.
To help, lawmakers reached a deal Sunday on a $900 billion Covid-19 pandemic relief package that provides $10 billion in funding for the industry, including $250 million for the Head Start program. The bulk of the funding will go toward the Child Care & Development Block Grant (CCDBG) to fund grants for child-care providers, which they can use to stabilize their businesses in a number of ways, including making payroll, purchasing sanitization supplies and even spending on fixed costs such as rent.
Lawmakers allocated $284 billion in loans through the Paycheck Protection Program, specifically noting that child-care programs would be eligible for these funds. The bill also makes updates to the child tax credit, making it more accessible to people whose incomes fell during the pandemic.
However, both proponents in Congress and industry advocates say that amount isn't enough to keep child-care providers in business for long.
"Child care is the critical infrastructure that we have to make a significant investment in in order to have an economic recovery," says Rep. Katherine Clark (D-Mass.). While Clark tells CNBC Make It that she's grateful for the $10 billion in funding, "it's just not nearly enough to make sure that we have a child-care sector that survives this pandemic."
About 56% of child-care providers report losing money by staying open, according to the latest survey from the National Association for the Education of Young Children. Moreover, 42% of the December survey respondents say they have taken on debt using personal credit cards to pay for supplies and other items.
That's because many centers are still operating at lower capacities, even as costs rise. The survey found that 91% are paying extra for cleaning supplies, 73% have taken on extra expenses for personal protective equipment and 60% are paying additional staff wages.
"Child-care providers have been hit hard by the Covid-19 economic crisis," says Sarah Rittling, executive director of the First Five Years Fund, an early childhood education advocacy organization.
The $10 billion in relief allocated to child care in Sunday's package is a "symbolic" recognition of the critical role child-care providers play, Rittling says. But more assistance is needed in order to support this hard-hit industry.
"The new Congress and incoming Biden administration have an opportunity to pick up where this down payment leaves off to ensure providers have the resources to prevent them from shuttering their doors permanently through what is sure to be a tumultuous and unpredictable few months, as well as to address the nation's child-care challenges by fortifying an early learning and care system that works for all families," Rittling says.
Others agree. Zero to Three Chief Policy Officer Myra Jones-Taylor called the latest pandemic rescue deal a "stopgap," saying that the child-care industry needs at least $57 billion in funding to provide grants and assistance to operators for long-term increased costs and lower enrollment.
"This package does not include nearly enough funding to support our child-care centers, who are struggling to remain afloat with less capacity, nor does it include the paid leave all workers so desperately need," Jones-Taylor says.
Editor's note: This story has been updated to reflect new details regarding the Covid-19 pandemic relief bill.