Since 2020, Texas child care providers have received more than $4 billion in federal relief funds, including roughly $2.45 billion through the federal American Rescue Plan Act approved in 2021. However, the relief funds expired in September.
While officials said it will be difficult to immediately determine the effects of the loss of funding, they pointed to several bills passed by the Texas Legislature this year that could help child care providers find some relief.
The overview
According to a July report issued by research and advocacy nonprofit Children at Risk, a third of all ZIP codes in Texas qualify as “child care deserts,” meaning there are at least three times more children eligible for early child care than the number of child care seats available.
In the Greater Houston area, 45 ZIP codes qualify as child care deserts, according to data provided by Children at Risk. Additionally, the accessibility of subsidized child care seats saw a roughly 29% decrease from 2020 to 2022, falling from an average of 38.1 seats per 100 children of low-income working parents to 27.2 seats.
To determine whether a ZIP code classified as a child care desert, Children at Risk officials used 2022 U.S. Census Bureau data to define a child as eligible for care if they were age 5 or younger and both of their parents were employed.In the Lake Houston area as defined by Children at Risk, two ZIP codes qualify as child care deserts: 77365 and 77345.
Kim Kofron, Children at Risk’s senior director of education, said access to child care has been a problem throughout the state for decades, but she said the issue was further complicated by the COVID-19 pandemic.
Kofron said Texas had around 17,000 early child centers before the pandemic hit in 2020. While that number had fallen to roughly 12,000 in 2021, the number of providers has since rebounded to around 14,000.
Despite the increase, Kofron said more than 70,000 kids throughout the state are currently on waitlists to receive early child care. She noted many of the children live in low-income areas, which can sometimes make it more difficult to find nearby child care options.
A closer look
Kofron said the industry could take an additional hit with the loss of federal relief funds. According to the nonprofit’s report, the relief funds helped support more than 80% of the existing child care centers in Texas.
“Really, what that extra money provided was a bedrock of funding that allowed centers to pay their staff more—to be able to keep tuition lower for families,” Kofron said. “That money is gone now.”
Matt Evers—co-owner of several Primrose School locations in the Greater Houston area, including Primrose School at Balmoral in Humble—said his businesses used a portion of the relief funds to help cover the cost of tuition for some staff members.
Evers noted the loss of federal funding shouldn’t affect his staff’s compensation and benefits, but he said he believed low-cost providers might take a harder hit.
Kofron said the loss of federal funding coupled with the rising cost of inflation could lead child care providers to raise tuition rates that are already too high for many families, which she said could have adverse effects on other sectors of the economy.
According to a March economic impact analysis by nonprofit Council for a Strong America, the nation’s child care crisis now costs an estimated $122 billion in lost earnings, productivity and revenue from parents, businesses and taxpayers every year.
- $5,520 lost by families per working parent in reduced earnings due to insufficient child care access and time spent looking for work if they’re fired as a result, totaling roughly $78 billion annually
- $1,640 lost by businesses per working parent in reduced revenue and in extra hiring costs, totaling roughly $23 billion annually
- $1,470 lost in tax revenue per working parent due to decreased income tax revenue and decreased sales tax revenue from reduced spending, totaling roughly $21 billion annually
- 12% reduction in the Texas child care workforce from January 2020 to March 2023
While Kofron said she was disappointed the state Legislature failed to approve an additional $2.29 billion for early child care that was originally included in the state’s budget, she pointed to a handful of bills that were approved aimed at assisting child care providers in Texas.
- Senate Bill 1145 allows local tax authorities to give property tax relief to some child care programs
- House Bill 2729 addresses teacher shortages for pre-K partnership classrooms by lowering the qualifications for pre-K teachers
- House Bill 1615 helps child care providers gain eligibility to partner with local school districts to care for pre-K aged children.
