American Rescue Plan - The time to act is NOW!

Alabama Institute for Social Justice (AISJ) is sending a message to our state and local lawmakers: Show us the childcare money.

The COVID-19 pandemic exposed a fact that we childcare advocates have been preaching for generations: Childcare is one of the most valuable – and underfunded – assets to any workforce. It is unfortunate, if not shameful, that it took a worldwide crisis to disrupt social gatherings, redefine workspaces and undermine normal school years before lawmakers and stakeholders bothered to take childcare funding seriously.

Indeed, about three years before COVID-19 struck, Childcare Aware of America’s 2017 report (Parents and the High Cost of Childcare) indicated that childcare is one of the biggest items in families’ monthly budgets – often greater than housing, transportation, or food. Now, that fact is not only resounding, but it is inescapable.

As I travel throughout the state and speak to both parents and childcare providers, I have witnessed painful realities that have long gone avoided: the need for childcare during non-traditional hours, overreliance on unlicensed childcare facilities, needing to ask families, friends, and neighbors for help. And that was before the pandemic.

Before COVID-19, the licensed capacity for childcare centers was 99,732 in early 2020. By October of 2020, COVID had helped shrink the number to 43,459. At one point during the pandemic, only 12 percent of childcare centers in Alabama were operating, and while centers have recovered to 88 percent operational, enrollment is still down 22 percent from pre-pandemic enrollment of 98,906.

The truth is that Alabama’s current market rate model of funding childcare has failed our families and providers. Existing payment rates represent only a fraction of the actual cost of providing quality childcare and early education. The gap between rates and actual costs is even wider for programs that serve infants and toddlers. Now is the time to ensure that those resources are made available to families who need them most – especially the 27 percent of African Americans and 30 percent of Latinxs in Alabama who live in poverty, according to Alabama Possible.

Fortunately, the federal government has responded during the pandemic by giving the issue of childcare funding its long overdue attention. On March 11, President Biden signed the American Rescue Plan Act into law and unlocked billions of dollars in new and supplemental funding for supporting children, youth, and their families. The act provides nearly $40 billion in funding for childcare, including $15 billion through the Child Care and Development Block Grant to expand access for low-income families.

For childcare workers – who are not only disproportionately women of color but among the lowest paid workers in the nation – it provides a stabilization fund. The act also increases funding for home-visiting programs and expands Child Tax Credits that could lift nearly 10 million children closer to or above the poverty line.

The bill also addresses food insecurity issues historically suffered by low-income families of color by expanding investments of prior bills that address the issue. There are additional investments to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and Supplemental Nutrition Assistance Program (SNAP).

For Alabama, this funding is a godsend. Ours is a state that SmartAsset.com ranked the third most dependent on the federal government, as it historically has not generated enough state revenue to provide for necessary needs such as childcare. But the federal government regularly does its part to chip in; therefore, it is simply a matter of allocating federal and state funding where it is needed, right?

Wrong. It’s never been that simple. Alabama’s Childcare Resources Supplemental Child Care Program helps low-income and working poor families in Alabama with limited childcare funding for monthly costs, but it is hampered by many restrictions. For example, to qualify, parents must be working at least 35 hours per week and cannot be receiving childcare assistance from the Alabama Department of Human Resources (DHR).

And childcare in Alabama is expensive. According to the Economic Policy Institute (EPI), the average annual cost of infant care in Alabama is about $500 per month, while the average cost for a four-year old is $432 per month. According to the U.S. Department of Human Services, affordable childcare should cost no more than seven percent of a family’s income. But in Alabama, that would mean only 27 percent of families could afford childcare. A typical family in Alabama, EPI said, spends about 22 percent of family income to care for an infant and a four-year old.

That is why AISJ looks to track down all the childcare funds available. We will advocate for every parent, every child, and every childcare agency, to ensure funding is allocated swiftly, properly, and equitably. AISJ seeks to be a conduit between those funds and people in need -- especially Alabama's poor people, who were disproportionately in need of those funds well before COVID hit.

The American Rescue Plan Act ensures that Alabama will receive about $6 billion in COVID-19 recovery funding that can be used to meet childcare needs. The state is expected to receive $2.1 billion in fiscal recovery funding, while counties and cities are expected to receive about $1.4 billion. Alabama DHR is slated to receive about $451 million in Child Care Stabilization funding and $282 million in Child Care Development Flexible Funding. Also, the Alabama State Department of Education expects $2 billion in Education Stabilization Funding.

This funding aligns with AISJ’s new initiative, The Alabama Movement for Child Care (TMACC), which seeks to 1) make childcare a public good, 2) improve workforce development, and 3) remove market rate restrictions to childcare. We are currently in conversation with the Children’s Funding Project to share best practices and discuss ways to better track all childcare dollars in the state.

And that is just the beginning in locating more funds to assist families with childcare, as other opportunities exist for families and children within the American Rescue Plan to secure more funding. They include:

Pandemic Electronic Benefit Transfer (P-EBT) funds will help students who lost access to free or reduced meals because their schools were closed or operating with virtual or hybrid models due to COVID-19. Alabama DHR said the program helped feed a half million children in Alabama who could have faced hunger without it.

Title IV-E programs support children in foster care, adoption, and kinship guardianship. The program provides direct financial support for children placed in foster care for their safety.

The COVID-19 pandemic has shone a light on the existing problems within the childcare system, and we have an unprecedented opportunity to look beyond the status quo and make key structural investments and systems changes to address these problems in a transformational way that truly supports childcare providers, the workforce, and families. Childcare and early education from birth to four is a critical part of our national, state, and community infrastructure. The time to act is NOW!