Durham childcare center prepares to close amid loss of federal stabilization grants

Children play at childcare center. (Photo: Stephanie Smith)

Stephanie Smith’s nearly eight-year run as a home childcare provider in Durham is coming to an end just as the Child Care Stabilization Grants that came from the American Rescue Plan Act (ARPA) expire.

The childcare veteran with more than 20 years of experience says she can no longer afford to keep the doors open due to rising expenses and state and federal childcare subsidies that haven’t kept pace with the cost of doing business.

So, Smith made the tough decision to close the doors to her Kids Rising into Success Childcare center, which she opened in 2016 . The center has one student left and will close for good June 30.

A big issue for Smith has been a chronic health condition that requires frequent doctor’s visit. As a four star-rated childcare facility, Smith said she must have a highly qualified assistant with a four-year degree in early childcare education to fill in when she isn’t there.

“North Carolina is really a stickler for education right now,” Smith said. “There’s a belief that education equals quality and that’s not the case. I believe that experience equals quality and there’s a fine line between education and experience and what quality means. North Carolina has focused so much on the education piece that a lot of great teachers with 30 years of experience — but lack the education — are leaving the industry.”

Smith couldn’t afford to hire an assistant with a bachelor’s degree at the hourly rate he or she would command. An assistant that Smith had before the pandemic quit to take a better paying job with a major retailer, she said.

“I would have to pay them $15 an hour or more and I couldn’t afford that,” Smith said. “I’m in a boat where I don’t want to increase my tuition because parents aren’t able to afford to pay the parent fee.”

Counties set childcare subsidies based on family size, income and other measures. Parents must pay the difference between what childcare centers charge and the subsidy they receive.

Newsline has previously reported that the state will soon spend the last of $1.3 billion in federal grant money to support childcare providers make through the pandemic. The money allowed some providers to increase staff pay. When the federal money runs out, some childcare centers will be forced some to raise fees on families or close.

Smith did raise tuition on two occasions. The parents’ portion of childcare (parents’ fees) cost jumped from $75 a month to as much as $230 a month for some families, she said.

“When I increased tuition, I lost students,” Smith said. “If I increase it anymore, I won’t gain any students, so it’s better for me to find another job in childcare consulting or childcare advocacy.”

Smith said she even waived parents’ fees to make tuition more affordable to parents struggling to stay afloat.

“What’s happening is their parent fees increased, and so they were struggling to pay their parent fee,” Smith said. “I waived several parent fees, which put me behind on my bills.”

Smith’s decision to close her childcare center comes as childcare advocates are vigorously lobbying state lawmakers to make a $300 million emergency appropriation to help keep childcare centers open and teachers in classrooms. It also comes as the Republican-led House and Senate joust over state budget legislation. Both chambers are proposing to allocate roughly $135 million for childcare center grants that will no longer be provided by the federal government starting next month.

Advocates, however, have said that $135 million is not enough to keep centers open and teachers in classrooms long-term. They have planned a rally for today (Wednesday, June 26) to demand that lawmakers stay in Raleigh until they fully fund childcare.

“There needs to be a moral outcry,” Rev. Rob Stephens, NC Repairers of the Breach Organizing Committee coordinator, said during a rally in Raleigh earlier this month. “The fact that they’re [the state’s Republican leadership] willing to spend hundreds of millions of dollars on vouchers for private schools that discriminate and are hesitating on passing funds for 100,000 zero- to 5-year-olds is evidence of a radical misalignment of values.”

As Newsline reported Tuesday, Sen. Ralph Hise, a Spruce Pine Republican and Senate budget committee co-chairman, said the $136.5 million in the Senate budget for childcare stabilization grants is a stop-gap measure meant to give legislators time to come up with a long-term solution.

Meanwhile, Gov. Roy Cooper’s budget proposal calls for $200 million for childcare stabilization grants.

“A lack of access to childcare is preventing parents from entering the workforce, meanwhile Republican legislators plan to spend $625 million on taxpayer-funded private school vouchers,” Cooper said in a statement. “We must address the upcoming funding cliff and invest in early childhood education and childcare.”

A recent report from the U.S. Chamber of Commerce Foundation in partnership with the N.C. Chamber Foundation and NC Child, found that insufficient childcare is costing North Carolina about $5.65 billion each year.

The report, titled How Childcare Impacts North Carolina’s Workforce Productivity and The State’s Economy, found that North Carolina employers lose $4.29 billion each year due to job disruptions and turnover related to childcare, and the state loses another $1.36 billion in tax revenue.

“The health of North Carolina’s economy is directly tied to the strength of its workforce. This survey shows that our state is not realizing its potential when it comes to both families and economic competitiveness,” said Meredith Archie, president, NC Chamber Foundation. “Affordable, quality childcare supports working parents on the job, allows businesses to recruit and retain talent, and helps North Carolina children develop skills for success in school and life.”

A survey conducted by the researchers showed that 35% of parents who experienced disruptions to their employment in the past year reported leaving the workforce as a direct result of issues with childcare. It also showed that 15% of working parents are planning to leave employment over the next 12 months.

The full report is available online here .

NC Newsline’s Lynn Bonner reported in April that a North Carolina Child Care Resource and Referral Council survey found that 88% of childcare providers will need to increase parent fees when the federal money runs out. Forty percent said they would have to raise parent fees immediately. About half said they would lose administrative and teaching staff and about two-thirds said they would have trouble hiring new employees with comparable experience and education.

Nearly one-third of the programs surveyed said they would have to close within a year. That’s equivalent to more than 1,500 programs and close to 92,000 childcare and early education slots.

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