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Because adequate, affordable childcare is so important to Colorado’s economy, Gov. Jared Polis has made addressing early childhood education and childcare a central issue of his administration — and the state is providing resources that employers and families can tap.

Rising costs and overwhelming demand are putting pressure on childcare providers like Martha Smalley, who takes care of six children full time and two part-time before and after school in her Fountain home.

Smalley started caring for children in her home 25 years ago.

“My husband was in the military, and I had four children at home, two of them in school,” she said. “For me, it was a way to be able to stay home with my children, and I felt like this was a way I could bring in income. I’ve been able to take care of all 12 of my grandchildren, too.”

Smalley had attended nursing school and earned a child development associate credential through the military after she and her husband moved to Colorado Springs from El Paso, Texas.

As a member of the Pikes Peak Region Family Child Care Association, which connects parents with daycare providers, she fields calls and refers them to 10 other providers.

“They are all at capacity,” she said. “I rarely get a call saying that someone has an opening. It’s been this way for months.”

The pandemic has increased the demand for childcare, but the number of providers who have joined the association has decreased, Smalley said.

“We used to have close to 300,” she said. “This year, there’s maybe 100.”

Not all licensed providers belong to the association, she noted, but she has seen providers leave the field.

“We try to get new providers in, but we are seeing a lot of providers quit,” she said.

Those who remain in the field are faced with rising utility and supply costs, which have necessitated raising prices. Some providers have stopped taking infants, Smalley said, and those who do care for babies are having as much difficulty finding baby formula as parents are.

Smalley receives a food subsidy of $500 a month from the U.S. Department of Agriculture to help defray food costs, but it’s not enough to cover formula for the special needs baby she cares for — if she can find it — or even the cost of feeding eight children two meals and a snack per day.

Smalley also buys bottled water for the kids to drink and to prepare their food, because of concerns about water contamination in the Fountain area.

Smalley said she has tried to hold the line on charges to parents.

“I’m on the low end of the scale, because I don’t believe it should cost a house payment to take care of your child,” she said.

But she and other providers have been forced to pass some of the cost burden to their clients.

“Most of the providers around here are charging $175 to about $250 a week per child,” she said. “I know a provider that just went from about $700 a month for an infant to about $1,200 a month.”

Issues like these ripple through the childcare industry, whether it’s in-home providers like Smalley or daycare centers, which face the additional challenge of finding and paying qualified employees.

HIGH COSTS

As of May 2022, there were 4,689 licensed childcare providers in Colorado.

“We have seen a slight decrease in the overall number of licensed providers” since March 2020, when there were 4,923 licensed providers, said Lynlee Espeseth, communications manager for the Colorado Office of Early Childhood.

El Paso County has about 220 licensed, center-based childcare programs and about 210 licensed childcare homes, according to Alliance for Kids, the county’s designated early childhood council.

Average wages range from minimum wage to more than $21 per hour. At federally supported programs such as Head Start, qualified teachers start at about $18 per hour.

Many Colorado families pay more for childcare than they do for rent.

The U.S. Department of Health and Human Services considers childcare to be affordable if it requires a family to spend no more than 7 percent of its income, but 2022 statistics show that Colorado families with two children spend twice that on childcare. And, according to a Sept. 20, 2021 news release from Gov. Jared Polis’ office, infant care in the state costs nearly 10 percent more than the average rent. 

An April 2021 survey by Move.org ranked Colorado 11th among the states and the District of Columbia in the average cost of childcare. In the state, the cost of day care for a 4-year-old is $21,678 annually, or 26.3 percent of median household income, compared with a national average cost of $9,100, or 13 percent of median income.

That means many families must choose between both parents working outside the home and paying for increasingly expensive daycare, or one parent staying at home to take care of the kids.

The Colorado Child Care Assistance Program, which is administered through county human services departments, helps working parents defray the cost of childcare by providing access to reduced-cost services, but families must meet financial qualifications and must pay a portion of the cost of care.

“We have individuals who want to work, but affordable childcare is a barrier,” said Cecilia Harry, chief economic development officer at the Colorado Springs Chamber & EDC. “Until we have a really strong solution for how we’re going to address that, we’re still going to have talented people missing out on participating in the workforce.”

Harry said childcare costs and shortages extend across industries, but employees in industries like manufacturing who work second and third shifts have an especially hard time finding care.

“I have yet to encounter a community that’s fully solved that challenge,” she said.

Harry said some employers are intentionally helping employees address childcare issues, but others are not, because they don’t see it as an issue for their employees or are not getting feedback from their employees about the need for childcare.

“A comprehensive strategy to address childcare needs as a country would dramatically increase labor participation rates, which would have a very positive effect on our GDP,” Harry said.

In the meantime, “there are a lot of resources and tools that employers can and should consider as a way to decrease some of that stress that their workforce is experiencing,” she said. “That’s important because we need everyone who wants to be in the workforce actively participating.”

TOOLS FOR EMPLOYERS

One of the most important tools employers can investigate is employer-based childcare, Espeseth said.

“We are very excited about the legislation passed during the 2022 season,” Espeseth said. “Legislation like SB22-213 provides additional funding to support many of the efforts that we have been engaged in to stabilize and grow the childcare sector.”

That bill pours $50 million in economic recovery and relief funds and possibly another $50 million in federal childcare stabilization grants into the state’s childcare system.

$10 million from the economic recovery and relief cash fund is earmarked to implement an employer-based childcare facility grand program.

Legislation in 2021 (SB21-236) created an $8.8 million grant program to support the creation of onsite or near-site childcare programs by for-profit, nonprofit and government entities.

The first round of applications for the grants opened in September 2021. Participants worked with Executives Partnering to Invest in Children to form partnerships, develop a business plan and fine-tune a financial model to support a competitive grant application for up to $800,000.

The Colorado Department of Human Services recently released the second-round application to apply for up to $500,000 to create employer-based childcare facilities.

According to the application, “these grants are intended to enable employers to construct, remodel, renovate, or retrofit a childcare center on the site or near to the site of the eligible employer’s property to provide licensed childcare services to the eligible entity’s employees.”

Businesses may partner with other employers to create and operate the childcare program.

Proposals are due by 11 a.m. June 15. More information is available on the Colorado Vendor Self Service website, vss.state.co.us; search for Office of Early Childhood.

This initiative “enables employers to explore what it takes to open a childcare facility in their business and be able to offer that as a benefit to their employees,” Espeseth said.

Senate Bill 22-213 also allocated funds to implement workforce recruitment and development grant and scholarship programs and to create a family, friend and neighbor program, which will support care providers with grants for training, information and technical assistance.

Through HB22-1295, legislators also created the Department of Early Childhood, which will implement a program to provide 10 hours per week of free preschool for 3- and 4-year-olds.

“Operationalizing the new Department of Early Childhood that will oversee the Universal Preschool Program is a very exciting step for Colorado,” Espeseth said. The program is expected to save parents an average of $4,300 a year in childcare costs.

Two other bills also supported the childcare industry. House Bill 22-1006 exempts property owners who dedicate property to childcare services from paying property tax on that property. House Bill 22-1010 creates an income tax credit for early childhood educators whose income falls below certain levels.

One thing employers can do right now is to share resources to help their employees find childcare, Espeseth said.

Families can search for licensed childcare through the Colorado Shines childcare resource and referral network at coloradoshines.com, she said. They can speak with a childcare navigator by phone at 1-877-338-CARE (2273), live chat with a navigator at unitedwaydenver.org/childcarereferrals, or email childcarereferrals@unitedwaydenver.org.

Alliance for Kids’ Finding Child Care page also assists parents in locating qualified care that fits their needs. It instructs parents on how to view licensing and ratings, refers families to financial assistance and provides resources for military families.

Reporter

Jeanne Davant is a graduate of the University of North Carolina. She worked for daily newspapers in D.C., North Carolina and Colorado, and has taught journalism and creative writing. She joined the Business Journal in 2017.