Updated 12:30 p.m.
Two DFL legislators on Thursday proposed expanding state child care and early education subsidies so that families would pay no more than 7 percent of their income for child care.
The average Minnesota family spends about 21 percent of their income on child care currently, according to Cisa Keller, senior vice president of early childhood programs at the education advocacy group Think Small.
The 7 percent goal comes from a federal recommendation by the U.S. Department of Human Services. Think Small estimates the state would need to spend an extra $2.5 billion on top of current funding to get families to that threshold in one legislative session.
Minnesota has some of the nation’s highest costs for child care. A report last month from the United Way of the National Capital Area in Washington ranked Minnesota as the third highest cost state for child care, putting the annual expense at $16,120 or 41 percent above the national average.
Grow the Future of Public Media
MPR News is supported by Members. Gifts from individuals power everything you find here. Make a gift of any amount today to become a Member!
The Minnesota plan would expand the state’s Early Learning Scholarships Program, according to Sen. Grant Hauschild, DFL-Hermantown and Rep. Carlie Kotyza-Witthuhn, DFL-Eden Prairie, who say they’ll file a bill in the coming legislative session.
They estimate their current proposal allots for around $500 million in extra spending.
“Currently care for one infant in Minnesota is around $17,000 across the across the state per year. That's more than a year of college tuition at the University of Minnesota,” Kotyza-Witthuhn told reporters Thursday. “And we are asking young parents, who are often at the beginning of their careers at their lowest earnings potential, to shoulder this cost alone.”
‘Day care still more than mortgage’
The plan would also help subsidize costs for child care providers.
Celeste Finn opened Big Wonder Child Care in St. Paul this summer, but she says she’s already stressed about money. When a family has to drop out of child care because of the costs, it puts the center in a hard position, to either raise tuition, cut salaries or close.
“Continuity of care is huge for families, but it's essential for providers,” Finn said. “That's a big reason why you're seeing child care centers and family day cares closing their doors, it's just, it's too hard. And it's too stressful to make ends meet. But if this legislation was passed, it would be monumental to providers everywhere.”
As a nonprofit, all of the money Big Wonder makes goes back into its program. Finn said she currently has to charge families $350 a week — about $18,000 a year — just to stay afloat and pay her employees a living wage while providing quality care.
“So $18,000 for a family that makes $50,000 is way out of their means,” she said. “So the vast majority of families in St. Paul, don’t make enough to afford Big Wonder, but make too much to qualify for CCAP (Child Care Assistance Program) or early learning scholarships. And so these families are squeezed out of most quality child care centers in St. Paul and across the state.”
Kierra Bennett has her 3-year-old enrolled at Big Wonder. She said her family currently spends 10 percent of their income on child care and that being able to bring down that cost would ease the burden for her family and others. “I think if it was already built into our society, it would be a lot easier for those parents to be less stressed and be able to develop and build.”
When Bennett and her husband had their first child, they were in college and were able to qualify for the state’s Child Care Assistance Program. But as their careers progressed, they didn’t qualify for grants with their second child and so have had to make sacrifices.
Bennett said they’re holding off on buying a second car and they don’t go on family vacations to save money for child care.
“Our biggest thing that we have to think about is child care,” Bennett said. “I think there has definitely been conversations in the midst of COVID where we're like, does it make more sense for one of us to just stop working for a while and put our careers on hold because child care got so expensive? We together make a decent amount of money, but it's still our highest bill. Day care right now is still more than mortgage for us.”
Filling a middle-income gap?
The Minnesota plan would expand the state’s Early Learning Scholarships Program using a sliding-scale system for subsidies targeted toward middle-income families, according to the bills sponsors. The goal is for monthly payments to go to providers who will then credit families on their child care bills.
Currently, to qualify for child care assistance in Minnesota, a family of four must make under $60,000 a year. The goal for this proposal is to expand these child care subsidies for families who make up to $175,000 a year.
Kotyza-Witthuhn, a mother of four children younger than 9, said she knows the struggle of paying for child care and worries that cost is stopping young people from starting families. She said this proposal is a continuation of work from the last legislative session to fill in the gaps for middle-income families.
While there haven’t been formal discussions yet with Republican legislators about support for this legislation, Hauschild said during informal roundtables in his district Republican legislators in attendance “expressed interest in addressing child care affordability.”
The DFL legislators said they were optimistic this bill will get bipartisan support, noting that in the last session state Sen. Eric Pratt, R-Prior Lake, carried the child-tax credit expansion bill originally sponsored by Kotyza-Witthuhn.
As senator of the one of the state’s most rural districts, Hauschild said he also hopes this bill will help solve workforce challenges that limit economic growth. Lack of child care availability often hits rural communities the hardest.
“The truth is our child care system is a market failure, especially for our rural communities,” Hauschild said Thursday. “The economics simply do not work. We can't pay our child care providers enough to make a living wage despite the fact that our families are paying more than their mortgages to secure child care spots for their kids.”