Despite increase, House budget won’t save Kentucky child care from ‘cliff,’ advocates say

‘Significant closures’ expected without more funding

By: - February 1, 2024 12:40 pm

Preschool children sing before lunch at the iKids Childhood Enrichment Center, a child care provider in Benton, Nov. 28, 2023. (Kentucky Lantern photo by Abbey Cutrer)

FRANKFORT — Faith Lutheran Learning Center, a child care provider in Lexington, is already operating on a budget deficit. 

And while the GOP budget that came out of the House Thursday does some good for child care, center director Charla Heersche said it’s not enough to keep her out of the red.

Charla Heersche (Photo provided)

COVID-era federal dollars are running out, as the Lantern previously reported. Without state help, Kentucky could lose more than a fifth of its child care providers. And even with the state help that is proposed in the House budget, experts say about 16,000 kids could lose access to child care in 2024.  

“We are currently increasing tuition gradually,” said Heersche, who’s been director of her center since 2011. “If we were not to receive any further funding, it would probably be a 20 to 25% tuition increase, which would not be affordable for most families.” 

American Rescue Plan Act (ARPA) dollars helped Heersche raise her staff’s wages. State subsidies helped to keep that going for a little while, she said, “but not to sustain that goal.” 

The roughly 61 families whose 81 children attend Faith Lutheran pay either $220 per week for extended days (from 7 a.m. to 5:30 p.m.) or $185 a week for school days (from 7 a.m. to 3:30 p.m.). 

Families in Kentucky, on average, pay around $7,600 per child per year, according to the Kentucky Center for Economic Policy. 

What does the GOP budget propose?

The nonprofit Prichard Committee for Academic Excellence, in an analysis of the budget, found the House plan falls about $200 million short of what it says is needed.

Sarah Vanover, a policy and research director for Kentucky Youth Advocates, said the proposed GOP budget shows a “monumental difference” in the focus on child care compared to the past. 

“This is the most money that has ever been suggested to be in the budget for child care. That is a good thing,” Vanover said. “It’s not nearly as much as we need. That’s the hard part.” 

The House budget increases state spending on child care by $52 million. Among the proposals outlined in the House budget are: 

  • $12 million annually for the Child Care Assistance Program (CCAP) to continue a  $2 per day increase in reimbursement. 
  • $30 million in 2025 and $40 million in 2026 to keep CCAP reimbursement rates at the 80th percentile of a market rate survey. This point is a “major positive,” according to Vanover, because it means 80% of the child care programs in the state will get fully reimbursed. 
  • $10.6 million annually to put the CCAP eligibility limit at 160% of the federal poverty level. This is a “bad thing,” according to Vanover, because it means “approximately 10,000 kids will lose child care assistance, and the parents may have to leave the workforce.”  
  • $2 million annually in the Employee Child Care Assistance Partnership (ECCAP), which passed into law in 2022 to incentivize employers to help employees pay for child care. Advocates have said it was a good start, but it’s also new and has low participation. This point is more “neutral,” said Vanover. It is a decrease from the previous $15 million investment, but enrollment in this program also “has been slow to take off, so it definitely needed to be reduced, but maybe not as much as they did.”  

While the budget proposes some positive things for child care, Vanover said, “we’re still looking at significant closures based on those numbers.” 

Sarah Vanover

Missing in the proposal, she added, is funding to keep a program that provided free child care for employees of child care centers, which could impact about 6,000 more Kentucky kids. 

Even the “big increase” in the House budget, Vanover said, would not make up for the loss of federal funding that’s been keeping child care in Kentucky afloat. “As a result, she said, “we will have a huge number of families that will lose services and potentially leave the workforce. And then that means those families will have a hard time paying their bills (and) giving the support they need to their kids at a very critical age.” 

Beshear seeks more for early childhood

Democratic Gov. Andy Beshear is asking the legislature to spend more on child care than the House budget proposes. Beshear wants an additional $68 million for CCAP in the first year and $73 million in the second year. Beshear also wants $172 million a year to begin funding universal preschool for Kentucky 4-year-olds, which is absent in the GOP budget. Vanover said it “is a positive for the child care field” that House budget writers “didn’t focus on the pre-k.” 

Brigitte Blom

At the time of Beshear’s pitch, advocates said they worried about pre-k cannibalizing child care and exacerbating the problems faced by the industry, the Lantern previously reported. 

Brigitte Blom, the president and CEO of the Prichard Committee, told the Lantern that the proposal for child care this year “is unprecedented.” 

“But at the same time,” she said, “it is not nearly enough to deal with the issue of lack of child care and affordability of child care across the state.” 

“It’s an important sign that they’re willing to put $52 million into the budget. Again, that’s, historically, a significant amount,” Blom said. “We’d like to see more come out of the final House budget and out of the Senate budget and into the child care budget, but this being a first step, it’s a good first step.”  

A ‘deeply concerning’ survey 

In the first week of January, the Kentucky Center for Economic Policy and Kentucky Voices for Health sent out a survey of all state-regulated child care centers asking about the state of child care in Kentucky in 2024. 

Dustin Pugel

Dustin Pugel, the policy director at the center, said Wednesday that the newly-released results were “deeply concerning.” 

From all but three Kentucky counties, 770 child care center owners and directors responded to the survey. The results showed: 

  • Four  in 10 centers in Kentucky are understaffed. 
  • Centers could care for 21,000 more children if they could hire enough people. 
  • 59% of respondents said they’d have already closed without COVID-era assistance. 
  • 199 respondents — slightly fewer than a quarter — said they face closure soon without help. 

This survey was sent out before the GOP released its proposed budget, but Pugel said “We think that there’s really a role for these results to influence the conversation and we really hope that (lawmakers) will listen,” Pugel said.

“Child care is indeed at the cliff right now here in Kentucky,” Pugel said. 

Luckily for Heersche, her center can operate rent-free from the basement of its affiliate church, Faith Lutheran, meaning she is free from the burden of mortgage or rent. 

But she’s not alone in facing significant tuition spikes. 

Krista Hughes, the director of Hickory Grove Daycare Preschool in Kenton County, already raised tuition by 5% for this year. But she may have to make “another significant tuition increase for our families,” depending on how the state supports her. 

“I believe that if I walk back pay,” she said, “I’m going to be walking my employees out the door.”

Cora Beth Brown, owner of The Children’s Academy in Hopkinsville, isn’t sure what the immediate future holds for her. 

Cara Stewart

“I’m afraid that I’m going to have to raise the fees again,” she said. “And I’m sad to say but I will lose a lot of families just due to them not being able to afford child care.”

Cara Stewart, director of policy advocacy with Kentucky Voices for Health, said her conversations with lawmakers have revealed that not all understand the child care industry. Some also believe, she said, that “moms should be home and not working.” 

“To that I say: our economy does not support a one income household,” Stewart said. 

“They’ve also said that they don’t understand where the profit goes,” she added. “And I’m like, ‘there is no profit. This is not a close call. This is not a situation where anybody is getting rich or even, really, doing well.’” 

A ‘profound responsibility’ 

Faith Lutheran Learning Center and many others shuttered in 2020 as the COVID-19 virus spread for the first year. These pandemic-forced closures “shined a light on long standing systemic issues,” Heersche said. But “this is not a short term problem or a new problem.” 

Kentucky lost around 1,700 child care centers between 2012 and 2020, the Lantern previously reported. Heersche said she thinks the slow bleed in child care is thanks to several factors, including the lack of respect the industry gets. 

The first five years of a child’s life are pivotal to their development, meaning child care centers serving this age group “have a profound responsibility to provide quality care and educational opportunities for that young child.” 

Emily Beauregard

“Being (called) a glorified babysitter is disrespectful to us, because that’s not what we do,” she said. “There’s a difference between just being open to care for kids so parents can go to work and then actual early childhood education.” 

That must include, for her, healthy ratios of children and teachers so every classroom is as rich as it can be, she said. 

“I think everybody would agree that it’s important to support children, but I don’t think that it’s always taken as seriously as it should (be).” 

Emily Beauregard, the executive director of Kentucky Voices for Health, said Wednesday that “access to child care is a social determinant of health and absolutely critical to a family’s ability to thrive.”   

“Child care isn’t cheap, and it shouldn’t be,” she said. “No iPad or smartboard will ever change a baby’s diaper or soothe a crying toddler.” 

Beauregard added: “I implore our policymakers to embrace this as an essential path to lifelong success and health.” 

The story has been updated to say the full House approved its proposed budget Thursday.

A backpack hangs on the door at the iKids Childhood Enrichment Center in Benton, Nov. 28, 2023. (KentuckyLantern photo by Abbey Cutrer)

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Sarah Ladd
Sarah Ladd

Sarah Ladd is a Louisville-based journalist from West Kentucky who's covered everything from crime to higher education. She spent nearly two years on the metro breaking news desk at The Courier Journal. In 2020, she started reporting on the COVID-19 pandemic and has covered health ever since. As the Kentucky Lantern's health reporter, she focuses on mental health, LGBTQ+ issues, children's welfare, COVID-19 and more.

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