“It’s just stressful to know that if we do lose the grants, that things are going to change and rates are going to go up,” said Kaylan Thomas, a Haywood County single parent of three children under the age of seven.

Thomas has an associate’s degree and brings home about $2,000 a month — if, she said, none of her kids get sick, forcing her to miss work. A rate increase would be disastrous to her already-tight budget. And, she’s not the only one.

“I haven’t really put it in perspective as far as where I’m going to have to cut,” Thomas said. “I haven’t done that yet just because it’s stressful to even think about it. I’ve just kind of put it on the back burner and not really thought about it.”

Over the cliff

The North Carolina Child Care Stabilization grants, part of President Joe Biden’s $2 trillion American Rescue Plan, brought $1.3 billion to the state’s child care providers in what the White House called the “single biggest investment in child care since World War II.”

Passed in 2021 at the height of the Coronavirus Pandemic, the grants provided child care facilities the ability to reopen and freed up parents to return to work, thereby spurring economic recovery.

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The money was made available on a quarterly basis to child care programs first licensed or regulated before March 11, 2021, and can be used in a variety of ways.

Compensation support grants are intended for one-time quarterly employee bonuses of $600 per full-time staff member and $300 per part-time staff member, while base pay grants offer one-time quarterly bonuses for both full- and part-time teaching staff. Amounts vary based on the facility’s rating, from $650 per full-time teacher at one- and two-star facilities to $1,560 at four- and five-star facilities.

Fixed cost grants are used not only for personnel compensation packages but also for facility rent and maintenance, goods and services needed to care for children, staff training, personal protective equipment, mental health support for children or employees and tuition assistance to families.

When the state’s biannual budget was passed by the General Assembly last October, state funding to continue what the expiring federal grants had started was not included.

In February, the North Carolina Child Care Resource and Referral Council conducted an email survey that was sent to roughly 5,400 child care providers across the state, asking about challenges they would likely face if the grants were to stop coming.

Of the 1,549 respondents, 88% said they’d have to increase rates, 40% of them immediately.

Two-thirds of respondents said they would expect difficulty in hiring or retaining experienced staff, half of them immediately.

Almost three in 10 respondents said they would have to close, immediately.

If all that holds true, approximately 1,500 of the remaining 5,400 child care programs in North Carolina will soon vanish, following more than 25% of the state’s child care centers that closed between 2016 and 2021.

According to the state’s Stabilization Grant Dashboard, the stabilization grants support more than 46,000 child care staff who in turn create a total capacity of just over 400,000 child care slots. Losing 29% of child care providers and/or child care slots means parents of roughly 100,000 children won’t be able to find care for them — even if they can afford it.

The providers that remain will likely raise weekly child care rates by at least 10%, per the survey, including those who have already raised rates in anticipation of the sunset.

The average per capita income in Haywood County is around $35,000. If the anticipated rate increases become a reality, it could cost the average parent $13,000 a year for the care of a single infant or toddler.

In April, Democratic Gov. Roy Cooper recommended adjustments to the biennial budget, including nearly $750 million for child care and early education.

Of that, $200 million in non-recurring funding was proposed to replenish the stabilization grants. $129 million was designated for the expansion of subsidies to parents in rural and low-income areas of the state, like Western North Carolina. The subsidies help parents afford child care, and help child care providers continue operating.

“North Carolinians in rural areas, particularly in Western North Carolina, know just how challenging it can be to find affordable and high-quality early childhood education and child care to help young children thrive, allow parents to work and enable businesses to hire good employees,” Cooper told The Smoky Mountain News on June 17. “Legislators across the state and particularly from rural counties must take this seriously and make meaningful investments in child care to strengthen North Carolina’s economy, workforce and hardworking families.” 

Cooper has also attempted to tie the issue of child care funding to a major expansion of private school vouchers pushed by Republicans, which will provide half a billion dollars in taxpayer money to private schools that can discriminate against students based on disability, religion or sexuality. The voucher expansion is also expected to hurt rural communities, where opportunities to utilize the vouchers are less common than in the state’s major metropolitan areas (see VOUCHERS).

With a veto-proof Republican majority in firm control of the General Assembly, Cooper’s proposed adjustments aren’t likely to be seriously considered.

A recent legislative effort to replenish the expiring federal funds hasn’t met with much success, either.

On May 2, seven Democratic senators in the North Carolina General Assembly introduced Senate Bill 822, which among other things proposes the establishment of a child care stabilization fund that would receive $180 million annually, essentially replacing a portion of the federal funding that’s about to disappear. The bill passed its first reading four days later, was sent to the Rules Committee and hasn’t moved since.

“It certainly is pressing to some of us in the General Assembly who understand how important this is,” said Sen. Natasha Marcus (D-Mecklenburg), a co-sponsor of the bill and candidate for insurance commissioner. “But it isn’t to everyone, unfortunately. This has been an issue that we’ve seen coming. We’re about to go over the cliff here without state help to support childcare facilities in our state.”

On June 11, Marcus attended a meeting of the North Carolina Association of County Commissioners, where Senate President Pro Tem Phil Berger (R-Rockingham) made his position on fixing the problem clear.

“He told the whole room that he’s locked in a standoff with the House,” Marcus said. “The Senate and House can’t agree on what the budget should be this year, and the way he said it was, the state is not going to come in and fill the gap that has been created since the federal government ended their Pandemic-era childcare grants. He just straight up said the state is not going to fill that gap. And then he said that was temporary money that was provided by the federal government during the Pandemic and to the extent any of these businesses relied on that funding to continue, then that was a mistake on their part.”

A rock and a hard place

A native of Jamacia, Jacqueline Wilson came to the United States to study at Western Carolina University, where she earned her master’s degree in special education in 2007.

For the past 11 years, Wilson’s been working in child care in Waynesville and is the owner/operator of Great Start Child Development Center on Putnam Street, which has a “superior” rating from the NC Department of Health and Human Services, a recent sanitation score of 229 out of 235, a capacity of 34 children and a waiting list with 17 more — mostly infants.

Her new facility on Country Club Drive, in the works for months, has a capacity of 22.

“We’re full,” Wilson said. “We already have three kids waiting to get in there, and we’re not even open yet.”

The expiration of the Child Care Stabilization grants couldn’t come at a worse time for Wilson, for her employees or for the children of Haywood County. She plans to open during the first week of July, shortly after the grants expire.

Most entrepreneurs like Wilson operate their child care facilities on a business model that leaves little room for instability.

Wilson paid cash for the Putnam Street building, so she doesn’t pay rent, but she does spend about $5,000 a month for utilities, upkeep and food. The 11 staff she employs there cost her about $30,000 a month, for a total overhead of roughly $35,000 a month.

Her monthly child care rates are in line with statewide yearly averages, starting at $960 a month for infants, $860 a month for ages 1-2, $760 a month for ages 2-3, $630 a month for ages 3-6 and $560 a month for school-aged children six or older.

If, at capacity, she has an equal amount of children from each age group, Wilson could expect to bring in about $25,600 a month in child care fees from the Putnam Street facility — less than she needs to meet expenses and earn a living.

The math can work if she has more infants and young children under her staff’s care; however, they require more staff supervision; the staffing ratio for older kids is one staff member for every 13, but for infants, it’s one to five.

“A lot of daycares won’t keep the infants because you have to have that ratio,” she said.

Once the grants ramped up in 2021, Wilson was receiving around $7,000 a month, a critical bridge to solvency.

“It did help,” she said. “I mean, we need more, but it did help.”

Wilson used the grant money to address another problem inherent in the child care industry.

Retail workers at Target start at $15 an hour, but the average wage of a child care professional in North Carolina, according to ZipRecruiter, is $14.85 an hour — 30% below living wage level for a single adult with no children, per calculations by the Massachusetts institute of Technology.

That wage is lower in rural areas like the mountain west because Wilson’s child care rates aren’t necessarily a reflection of what parents are willing to pay, but rather what they’re able to pay; poverty rates here are higher than national and state averages, and poverty is more likely to affect women as well as Black, Hispanic and Indigenous people above all others. Since most parents can’t afford an additional enrollment fee on top of the monthly rate, Wilson says, she doesn’t bother trying to charge them. 

“The grant money made it possible to pay staff, to increase their salary,” said Wilson, who added that she’d also used the grants to offer health insurance and 401k matching. “Salaries went from, say, $11 an hour up to $15 an hour during COVID because we wanted staff to stay.”

One of Wilson’s staff members is Kaylan Thomas, whose three children all attend the Great Start facility on Putnam Street. As both a child care provider and consumer, Thomas could be looking at both a pay cut and a child care rate increase if the General Assembly doesn’t come up with a solution before July 1.

“It actually breaks my heart a little bit,” Thomas said. “Not only as a parent, but as a teacher, I see it — I’m not the only parent that that needs that and as an employee, having that grant money, we could potentially have more income. It makes me sad to know that they could possibly not [replenish grant funding].”

Wilson said she doesn’t want to cut pay because she’ll have a tough time finding quality staff like Thomas, and she doesn’t want to raise rates because parents won’t be able to pay. But she doesn’t think she’ll have to close her Putnam Street operation or her new Country Club Drive facility, either.

“Well, with me opening this center, it might help some,” Wilson said. “I’m going to use this center to subsidize the payments for all the staff, so I won’t make any money here. Like, not a penny.”

But she will add some much-needed volume to the child care system in Haywood County, even as other child care establishments do close. Stats from DHHS say that as of Dec. 31, 2023, there were 27 child care providers in the county with a total capacity of 2,037 children.

As of June 30, 2023, those providers had collected more than $5.9 million in Child Care Stabilization grants.

Thomas and her three children qualify for a state subsidy that makes her monthly child care payment just $144, as opposed to an amount that would be greater than her monthly take-home. The subsidy is especially helpful for Thomas because she’s currently working towards her bachelor’s degree in early childhood education.

“I’m doing it to better my future, but also for my babies because that’s going to be a totally different pay scale,” she said.

Cooper’s proposed budget adjustments include $26 million for the WAGE$ program, an education-based supplement for child care workers earning low pay, and the Senate Bill currently languishing in the rules committee would allocate $10 million to pay operators like Wilson so that child care providers like Thomas could, regardless of income, receive free child care for their own children while actively employed in a licensed child care facility in North Carolina. But as that Senate Bill is currently going nowhere, neither is Thomas’ child care bill.

Things will likely be different for Thomas once she finishes her studies in fall 2025. Until then, she, like thousands of other parents across the state, remains between a rock and a hard place.

“I’ll probably just ride it out until I get my degree,” Thomas said. “I mean, at this point, I’m in it for the long run.” 

Remember November

Much has been made of North Carolina’s back-to-back “top state for business” designation by CNBC in 2022 and 2023, but less notice has been given to a report by international nonprofit network OxFam, which ranked the state as the worst in which to be a worker.

The child care situation can only add to OxFam’s concerns about wage policy, worker protections and the right to organize.

Even the reliably pro-business, pro-Republican North Carolina Chamber of Commerce — which since 2016 has donated more than $260,000 to General Assembly Republicans but just $30,500 to Democrats — now finds itself at odds with Republican inaction on child care.

A recent report issued by the U.S. Chamber of Commerce Foundation in partnership with the N.C. Chamber Foundation says that child care is a “two-generation” workforce issue and that employee turnover in conjunction with absenteeism costs the state $5.65 billion a year  — even more than the notorious HB2 “bathroom bill” debacle that cost the state $3.76 billion (see ECONOMIC DEVELOPMENT, p. 10).

“I think we do need to find a way to plug this hole, as the advocates say child care workers are the workers behind the workforce,” said Sen. Julie Mayfield (D-Buncombe). “If we don’t support that workforce and those businesses, we’re going to be losing people out of the primary workforce, in droves.”

Mayfield added that she’s not aware of any dissention on the Democratic side. Attorney General Josh Stein, the Democratic nominee for Governor, told The Smoky Mountain News that solving the child care crisis will be a priority if he’s elected, much like it’s been for Cooper.

“We need adequate child care because parents need to work and kids need a safe place to grow and learn. The General Assembly allowing these centers to close is bad for business, bad for our children and bad for our future,” he said last week. “As Governor, I’ll work to keep qualified early childhood educators in the classroom and to make child care more affordable and accessible for families across North Carolina.”

Stein’s General Election opponent, Republican Lt. Gov. Mark Robinson, said through spokesman Mike Lonergan that the blame for the situation lies squarely on Stein, who Lonergan said “sat on his hands” as a global public health emergency caused “draconian” lockdowns that forced experienced child care workers to seek other employment.

According to an email survey of child are providers, rates will likely go up and facilities may have to close. Cory Vaillancourt photo

“While ultimately this decision rests in the hands of the General Assembly, the lieutenant governor and his team will continue to monitor legislative developments,” Lonergan said. “Regardless of the outcome of the short session, should he become governor, Mark Robinson wants to turn North Carolina into a destination state for life by creating a culture that will do more to support women and families that choose life, including improving foster and childcare, adoption and more.” 

During a June 18 House appropriations committee meeting, members unanimously approved proposed Republican changes to the budget, including $135 million in non-recurring funds for the Child Care Stabilization grants.

“The amount that advocates and business leaders are telling us is needed to sustain childcare services in NC for just one year is $300 million,” said Buncombe County Democratic Rep. Lindsey Prather. “Even knowing this budget isn’t going to pass the Senate (as they’ve made clear), House Republicans still aren’t willing to put in the money needed to keep families and workers supported.”

Rep. Caleb Rudow, Prather’s Buncombe County Democratic colleague, agreed that it was too little, too late, and that if there’s no agreement by July 1, some child care facilities may close in the meantime, waiting for money that may never come.

But there may be a last-minute solution if Republicans can’t find common ground on the competing budget adjustment proposals.

Sen. Kevin Corbin (R-Macon) represents the eight western counties and also chairs the Senate’s health and human service committee, which oversees a $7.7 billion budget.

“To me, this is very important,” Corbin said. “That funding not being there will hurt rural counties.”

He said the Child Care Stabilization grants were his number one ask, to the tune of $300 million, but he agrees that it’s unlikely the House and Senate will come together to pass a budget before July 1.

Corbin said he wouldn’t rule out running the Child Care Stabilization grant funding as a standalone bill, independent of stalled budget negotiations between his chamber and the House.

Kaylan Thomas, the Haywood County mother of three and a child care professional herself, said she’s registered to vote, she votes regularly, and she plans to vote in November. When she does, she’s going to remember how the General Assembly could have helped her — and other working parents like her — but chose not to.

“My voice is going to be heard,” she said. “Even though I’m just one person, I know that there’s other people out there that feel the same way and are going to do the same thing.”

Find child care near you

For working parents, finding quality child care has always been a chore — clickbait internet ads, irrelevant search results, inconvenient locations, inadequate schedules or unaffordable weekly rates — but it’s about to get more difficult. If you’re looking for a place to send your little ones that meets your needs and theirs, the North Carolina Department of Health and Human Services has got you covered. Visit the comprehensive NCDHHS child care facility database to learn more about licensed providers in your area that could meet your needs at ncchildcare.ncdhhs.gov/childcaresearch.