Idaho Republicans rejected ARPA child care funds. Providers must cut wages or raise prices

On Wednesday morning, the doors at Lakewood Montessori in Boise will be locked, the lights will be off and the dozens of children its providers typically care for will be absent.

Co-owner Mary Clements said the preschool will shutter for the day so employees can rally outside the Idaho Capitol. They’ll be joined by parents and child care providers from around the Treasure Valley who fear a lack of funding could lead Idaho child care centers to close for good.

Advocates are urging Idaho lawmakers to rethink a budget that would cut millions in federal funds for child care that was planned to continue until June.

Providers say losing the funds, which many used to boost employee wages, means passing costs on to families, many of whom are already struggling with the state’s sky-high day care costs.

Funding cut shocked child care providers

Last week, the Joint Finance-Appropriations Committee voted in favor of passing an Idaho Department of Health and Welfare budget that excluded $36 million for an ongoing child care stabilization grant. The grant money, which Health and Welfare would have distributed to child care providers through June, was funded entirely with federal dollars from the American Rescue Plan Act.

Committee co-chair Rep. Wendy Horman, R-Idaho Falls, told the Statesman that lawmakers passed over the money because of “unresolved issues” with the funding source. Horman said the Idaho attorney general’s office was investigating possible misuse of funds. Emily Kleinworth, a spokesperson for the attorney general’s office, pointed the Statesman to an Idaho Press report that said the office was serving civil investigative demands to programs that applied for a Health and Welfare after-school grant program. A civil investigative demand is a type of subpoena that allows the government to demand information for a potential lawsuit.

Grants for that program also came from ARPA funds and were handled by the Idaho Department of Health and Welfare.

Horman said it was unclear if the attorney general’s inquiry would conclude in time for the budget-writing committee to reconsider the child care stabilization grant.

Health and Welfare began disbursing the child care grant funds in monthly payments last year and estimated the money would last until June.

Lori Fascilla, executive director of the Treasure Valley’s Giraffe Laugh child care facilities, told the Statesman providers knew the funds were temporary, but she and many others budgeted for 2023 with the June estimate in mind. Fascilla said the June cutoff was the “worst-case scenario,” as providers hoped funds might be extended into 2024.

“Our worst-case scenario is now not our worst case,” Fascilla said. “It’s moved four months ahead of schedule.”

Clements said the JFAC budget decision came as a shock. Within a few days, she said, Health and Welfare sent a letter informing her that Lakewood Montessori’s final payment was on the way.

“It feels like a lack of respect for what we do to pull funding with no warning,” Clements said.

Grant funds went to employee wages

Fascilla and Clements said that like many other providers around the state, they used the ARPA grant funds to pay employees higher wages. Fascilla said it made a difference in employee retention in a competitive job market.

“When children are growing up in a stable environment with the same people and aren’t engaging with a new teacher every other week or every other month, it just makes a huge difference in terms of quality for children,” she told the Statesman.

According to child care advocacy group Idaho First Steps Alliance, the median child care worker salary in Idaho was just over $10 an hour before the pandemic. Justin Snyder, who owns Boise’s Le Soleil French school, said he was able to increase employee wages 10% to 20% with the grant money.

Losing the funds means making a difficult decision sooner: Cut back on employee wages or pass costs along to parents. Neither is an attractive option.

Wage cuts would likely mean losing employees, Snyder said. With state-mandated teacher-child ratios, losing employees can impact how many children a provider can care for. But increasing costs for families could force some parents to forego child care altogether.

An Economic Policy Institute study estimated the average cost for infant care in Idaho at $7,474 per year — about 13% of the median family income in the state. The U.S. Department of Health and Human Services considers child care affordable if it costs no more than 10% of a family’s annual income.

“I am pretty fearful that a lot of families around the state won’t be able to deal with the (cost) increases,” Snyder told the Statesman.

Providers said they know families are already spread thin. Clements said she had to raise tuition prices 10% at the start of the year and expects to have to raise prices again now that the grant funds have been cut.

“I think that’s a lot to absorb in one year but I’ve literally had had no choice and so we were hoping that these funds would help extend the time that we hold off on those increases,” Clements told the Statesman. “In the time that I’ve done (this job) we’ve gone from what I felt were very reasonable rates to ... I don’t know how to qualify it except to say it feels like California now. And I don’t know how families can continue to afford this.”

Families already face major child care costs

Cindy Montoto’s son has attended Le Soleil since Snyder opened it in June 2020. Since then, Montoto said prices have increased at least once a year. Her son’s day care costs more than her family spends every month on mortgage payments, she told the Statesman.

“We have families in our program that have multiple children,” Montoto said. “I can’t even imagine what that feels like for those families.”

Montoto said her family is willing to spend money on Le Soleil, which charges up to $1,400 per child per month, because she knows Snyder pays employees well and runs a quality program. Still, she and her husband worry about what they would do if Le Soleil had to close or cut day care positions because it couldn’t keep staff.

“We would be basically out of luck in sending him to another program until he starts kindergarten (this fall) because the waitlists are so long everywhere else,” she said. “They’re also probably going to be equally as expensive, if not more.”

Anthony and Jordan Jacobs also have a son who attends a Boise child care facility. They said they toured multiple facilities in 2021 while Jordan was pregnant. Knowing how competitive child care spots are, they hoped to get their child on a waitlist before he was even born.

Now they worry what lies ahead without the grant funding that providers expected.

“Removing this remaining funding that child care programs have accounted for is going to leave child care programs and families with really difficult decisions,” Jordan Jacobs told the Statesman. “And we’re not sure what that means for us yet. We haven’t sat down and talked through because we’re kind of hoping that it doesn’t go through.”

The Jacobs family said they reached out to legislators and were told they heard the outcry from parents and child care providers. The budget that nixed the federal grant funding still must be approved by the House and Senate.

Parents and providers said this issue reaches beyond child care and families that use it. For some families, the only feasible option in light of tuition increases is for one working parent to stay home. That has a ripple effect on the community and the economy.

“Every single other business in every sector in Idaho has employees who would not be able to work if they didn’t have affordable child care,” Snyder said. “And especially since we already have an extremely tight job market and employment costs are rising, this could really lead to a pretty big portion of the workforce not being able to work.”