Louisiana's hard-hit daycare industry is in store for a $773 million infusion from the $1.9 trillion federal stimulus bill to help operators with coronavirus expenses and parents by expanding access to sites.
The day cares, like lots of businesses, have suffered major losses during the pandemic — about 70% were closed at one time last year amid plummeting attendance.
Losses for Louisiana day care operators because of the coronavirus pandemic have more than tripled since May and now total $100 million, the l…
Losses totaling about $100 million in the middle of 2020 rose to about $245 million through the end of January, according to a study by the Louisiana Policy Institute for Children.
The stimulus bill, called the American Rescue Plan Act of 2021, includes about $476 million for the state's child care centers and $297 million to expand access for low-income families, according to The Center for Law and Social Policy.
The money can be used for salaries, rent, maintenance of the facilities, personal protective equipment and COVID-related supplies, the group said.
Child care providers have lost at least $1.7 million because of closings sparked by the coronavirus and sites that care for about 12,500 child…
"We already had a child care crisis prior to the pandemic," said Jenna Chiasson, assistant superintendent for the Office of Teaching and Learning at the state Department of Education. "We know that we had families who had trouble affording child care, child care providers already struggling to stay afloat."
COVID exacerbated that. "This funding is going to really carry opportunities to stabilize the sector," Chiasson said.
The legislation includes $39 billion for child care centers nationwide. Louisiana's allocation is the 14th largest in the U.S.
The latest addition means the state will have collected more than $1 billion in federal stimulus dollars for child care.
Some advocates have cheered that the $1.9 trillion measure includes money for the child care industry and for parents who need to care for their youngest learners.
However, Kenneth Francis, the director of policy and child advocacy for the nonprofit Agenda for Children, cautioned that officials should be careful about how to allocate the one-time federal dollars so they don’t end up covering expenses that should be funded through permanent revenue.
For instance, he’s wary of using the money to fund more child care seats for families through the Child Care Assistance Program, a state-run initiative that uses federal money to help low-income families pay for education for kids under the age of 4.
If the funds aren’t recurring, more families could be served only to end up on a waitlist after they dry up, Francis said.
"This is an unprecedented, historic amount of money, no doubt," Francis said. "But people are going to be very wary of doing anything recurring with this money, knowing it's going to run out at some point. Because if we’re going to leave families and providers in the lurch -- that’s a scenario we all desperately want to avoid."
Chiasson said the stimulus money will allow the state to pay child care centers based on enrollment rather than attendance.
Regardless of how the money is spent, local advocates say data shows the need for a flexible influx of cash in the child care industry, particularly in the New Orleans and East Baton Rouge markets.
Louisiana Department of Education enrollment data for 2019, compiled by the Louisiana Policy Institute for Children, shows that two out of three young children have both parents, or their single parent, in the workforce, meaning they’re likely in need of care.
But in New Orleans, only 37% have been able to access publicly-funded "seats" in daycares, leaving over 9,200 children in the lurch -- including an estimated 92% of the city’s low-income infants. In East Baton Rouge, only 34% children in need from birth through age 4 have access, leaving over 10,500 children in need.
Daycare centers are struggling, too. Although only two centers in the New Orleans area remain closed from when businesses shut down in spring 2020 as most nonessential worker parents stayed home with their children, plenty have suffered financial losses, according to a Louisiana Policy Institute for Children and Agenda for Children report called "Struggling to Recover."
In fall 2020, 59% of New Orleans centers said that one of their biggest challenges is that "costs are exceeding revenue," according to Agenda for Children, and three-fourths said that financial support was one of their top three needs, with more than half it No. 1.
Meanwhile, a Louisiana Policy Institute for Children study from June 2020 concluded that 77% of daycares statewide suffered average losses of $110,000 per business, translating to an estimated $137.5 million statewide. Francis said those numbers have only grown since.
Rochelle Wilcox, the founder of three Wilcox Academy of Early Learning daycares in New Orleans’ 7th Ward and Central City, said hers are among those that suffered. She's spent $31,000 on protective equipment and things like plexiglass partition, and her daycares are still not operating at full capacity.
Before the pandemic, Wilcox’s three centers provided care to 155 children, with a wait list of 124 kids. Her daycares now have 101 children, a decline that’s forced her to cut her 36 employees down to 24.
"People are just afraid to bring their babies. They’re unsure," she said.
State officials said Tuesday day care centers already reeling because of the coronavirus pandemic face a new challenge: How to lure teachers w…
Wilcox said she’s still trying to figure out how to fairly use federal funds that are already allocated. For instance, she thinks raises are deserved for her teachers, who make between $12 and $15 an hour, and says child care workers in general are grossly underpaid. Bureau of Labor Statistics data shows the average salary for a kindergarten teacher in Louisiana is $45,200, compared to $20,320 for a child care worker.
However, she’s also concerned about sustainability. "My concern is that while it’s great to give teachers incentives it can’t adversely affect the child care center," she said. "I don’t want to give a certain amount of money for just six months, for them to wonder where it went."
Sherrel Pointer, owner and director of Treasures From Heaven in Baton Rouge, said her center can always use financial assistance but things are much improved over 2020, when the site was closed between March and May.
Louisiana child care providers have lost $30 million because of the coronavirus pandemic and need more than double that to help re-start the e…
"We are doing wonderful," Pointer said. "Everything is going really good."
A total of 99% of centers have opened statewide, state officials said.
Pointer's site is at capacity -- 27 children ranging from six weeks to age 4 -- and has a waiting list as well.
"We are just limiting adults coming to the building unless it is a state official or an employee," she said.