Providers of early childhood care to children under 5 years old in Austin and Travis County are anticipating lingering financial problems from the COVID-19 pandemic to become exasperated as federal relief expires.

The gist

About $4 billion in Child Care Relief Funding—funded through the American Rescue Plan Act—was distributed to nearly 11,000 child care providers by the Texas Workforce Commission, or TWC, between 2021-22. By Nov. 30, providers must spend the funds they received, a majority of which were used to help pay staff.

Providers of early childhood care, such as Havenwood Nature School in Dripping Springs were eligible for and applied for these funds last year.

A closer look

In a survey of over 1,800 child care administrators conducted by the Texas Association for the Education of Young Children, or TAEYC, 26% reported they are likely to close when funding runs out, while 31% are likely to remain open, and 43% are unsure of their fate.

In Travis County and the Austin-area, potential closures are expected to be delayed as local investments mitigate the impact of the expiring funds. In response to the TAEYC survey, 50% of Travis County child care administrators said that they are “unsure” if their programs will close without additional funding.

“I think we are still seeing effects of the pandemic,” said Cathy McHorse, vice president of Success By 6 for United Way for Greater Austin. “We see costs are increasing, and now [early child care providers are] losing any kind of pandemic support that they had.”

The big picture

For Cody Roberts, co-owner of Havenwood, the Child Care Relief fund gave his business the ability to offer more benefits to staff and roll out new programs.

“In our business, you’re always fighting for the good teachers,” Roberts said. “[The funds] allowed us to bump up our pay, offer a bunch of extra benefits, roll out a bunch of cool programs for teachers, and even allowed us to stock our office with a bunch of snacks, which seems dumb, but that really moves the needle with teachers.”

Outside of federal funding, Havenwood, like all private early childhood programs, relies on tuition for revenue. Without the ability to receive more funds, however, Roberts anticipates the need to raise tuition in order to keep up with inflation and provide a competitive pay for staff.

In a survey of 70 Travis County-area child care providers conducted by TAEYC, 80% said they have already raised or will raise tuition as a result of Child Care Relief funds ending.

“The average wages in our region are less than $20 an hour,” McHorse said. “You see fast food restaurants raise their prices because it's more of a market, so you pass that cost to the customer, while in child care, the customer is a parent who's at their probably lowest level of economic mobility.”

What’s next

McHorse says that local collaborating and allocated funds will help mitigate closures for the near future in Austin-Travis County.

Local efforts toward affordable child care include United Way for Greater Austin’s work with Austin ISD to renovate Pease Elementary School, which closed after the 2019-20 school year, into an early childhood education center.

“We're not going to see a dramatic closure like everything goes dark in November, but we're going to have this insidious decline that is easy to overlook,” McHorse said. “And if we don't pay attention, we're going to find ourselves in a year or two from now thinking there is no more child care.”