NC Democrats say daycares will shut down unless legislature spends big

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    North Carolina (WRAL) — Hundreds of millions of dollars in federal aid for child care centers across North Carolina will end in a month — raising concerns among business leaders and some state lawmakers that thousands of people will be forced to quit their jobs, or scale back on hours, if they lose child care.

Hundreds of child care businesses are at risk of closing down, industry insiders and advocates say, unless the state government steps in to replace some or all of the federal money that was approved as part of a pandemic-era relief package. Congress didn’t renew the funding, which will run out June 30.

Democratic state lawmakers say the state has the money to fund the gap and could do so as part of a new state budget, which begins on July 1. But they fear the Republican-led legislature isn’t taking the problem seriously enough.

On Thursday, Democratic Sen. Dan Blue urged Republican legislative leaders to act — and soon.

“These parents are on edge,” said Blue, the Senate’s top Democrat. “… And that’s why it’s so critical that we send a clear message — now — that these centers can plan on remaining open. So parents don’t have to start making decisions to leave jobs.”

Republican leaders have talked of spending hundreds of millions more this year — but they want to send it to the private school tuition voucher program. Senate leader Phil Berger and House Speaker Tim Moore have each identified that voucher funding as their top priority for this year’s legislative session. Democrats have denounced the expanded voucher program as a handout to wealthy families.

Some GOP leaders have also acknowledged the childcare funding issues, and have said it might be included in budget negotiations. But details are lacking.

Budget talks breaking down There is a state budget already in place for the coming fiscal year. But it doesn’t reflect the $1 billion surplus lawmakers could now spend, since tax revenues in April were higher than expected.

Budget talks on how to spend that surplus now appear stalled, however, as the two chambers’ leaders engage in a rare public spat over their disagreements.

Berger has criticized Moore for wanting to dip into the state’s savings to spend more on “pork” projects — the baseball fields, new police cars and other types of projects that are supposed to be funded by local governments. Such spending is criticized by fiscal conservatives but can be a useful political tactic to garner support for GOP incumbents in an election year. Moore, meanwhile, has criticized Berger for not wanting to discuss the child care shortfalls, or extra raises for state employees.

“As good faith negotiations move forward, the House remains focused on pressing issues such as salaries and childcare — priorities the Senate has so far failed to consider at all,” Moore spokeswoman Demi Dowdy said.

A spokesperson for Berger, Randy Brechbiel, said Thursday he remains skeptical of requests for the state to spend hundreds of millions of dollars on child care aid.

“Childcare is an important issue, but legislative Democrats’ insistence that the state pick up the tab for the federal government is short-sighted,” he said.

It’s not only Democrats calling for the extra funding, however. In addition to Moore’s push, the issue is also being championed by the North Carolina Chamber of Commerce, a powerful conservative business lobbying group.

Of the dozens of items listed on the chamber’s legislative agenda for this session, child care funding is the top issue.

Last year an early draft of the budget by Republicans in the state House proposed an extra $10 million on child care — a fraction of the $300 million industry advocates say will be needed starting this year. The funding was cut from the budget at some point during the secret negotiations between House and Senate leaders.

As for the new budget, last week Berger indicated he’d be fine with not updating the budget at all, despite the $1 billion surplus. With inflation continuing to rise, and uncertainty lingering over future recessions, Berger told reporters, he wants to be cautious.

“Our primary responsibility is to make sure that we can fund the things that we have already promised would be funded,” he said.

Rising salaries driving costs Blue and Robert Reives, the Democratic leader in the House, brought Raleigh child care center owner Kim Shaw to the legislature Thursday. Shaw runs A Safe Place Child Enrichment Center, a five-star day care in Southeast Raleigh.

She has relied on federal funding to give her employees raises — which she and others say has been necessary to compete with rising wages in other industries. Unless the state can help replace the federal funding, Shaw said, she’d have to cut her staff’s pay or significantly increase what she charges families.

Neither option is likely to be viable for her business, she said, so she might be forced to close her doors.

In the Triangle, the typical family already pays about $16,000 a year for childcare, WRAL reported last year.

Shaw said she’s proud to offer a highly rated child care center, complete with a garden where they grow their own food on site, in a low-income part of Raleigh where quality food can be scarce and violence isn’t uncommon. She and her staff not only care for the approximately 100 children enrolled, she said, but they also help their children’s families learn more about good parenting.

“This is valuable work,” Shaw said. “It is important that, as the wealthiest nation on Earth, we do not recognize the importance of education until the children are 5 years old. The North Carolina General Assembly has the financial resources to fund early childhood education adequately. They claim to care about children. Yet their budgets do not reflect this.”

Shaw’s center isn’t the only one to have used the soon-to-expire federal funds to raise salaries rather than hiking rates on families — which are already among the highest in the nation, WRAL reported last year.

Following the Covid-19 pandemic, as new job growth has boomed and workers now have more options, wages in all industries have gone up. In 2019, federal data shows, the average child care worker in North Carolina was making $23,550 a year — the equivalent of $11.32 per hour in a 40-hour work week.

But even previously low wage jobs, such as those in fast food, now tend to offer better hourly rates. So child care wages grew by 25% between 2019 and last year. In 2023, the average child care worker made just under $30,000.

That 25% average raise from 2019 to 2023 is slightly higher than the 23% wage growth for North Carolina workers overall in that same period. The average North Carolina worker made $59,730 last year, up from $48,550 in 2019.

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