Open Discussion Forum

Federal Childcare Stimulus Funds Not Reaching Childcare Centers in Texas

  • 1.  Federal Childcare Stimulus Funds Not Reaching Childcare Centers in Texas

    Posted 25 days ago
    Although the Federal government has set aside childcare funds in the CARES Act and is proposing another 50 billion for childcare in the next round of stimulus, not all childcare centers in Texas area eligible for those stimulus funds.  Currently in Texas, the Stimulus dollars are sent to the State via the Community Development Block grant program which in turn sends the funds to the Texas Workforce Commission (TWC).  The TWC then instructs the different "Worforce Boards" around the state on how to distribute those funds through the "childcare subsidy program or NCI).

    Here is the problem.  Many high quality licensed childcare providers in Texas do not participate in the subsidy program because the reimbursement rates established by TWC are so low and do not match up to their published rates.  The difference can be anywhere from $30 -$80 dollar which means if  the provider participates in the program they have to write that amount off as a loss and limit the number of "subsidized students they take into their program.  Providers that have lower published rates will tend to participate at a higher rate in the program, because the reimbursement rates are closer to their published rates so they will take in more subsidized students.  The centers with lower published tuition rates typically are serving low income areas.

    However, this pandemic has not been selective in which type of childcare centers it has affected so both all private pay centers and mixed pay centers have been impacted financially by this crisis.  Under the current funds distribution system in Texas, only centers that participate in the childcare subsidy program have been able to access the stimulus funds.  The funds have been tied to increases in the daily subsidy rates and opening up eligibility to essential workers to increase the number of people on the subsidy program.  The funds were also used to pick up the parent fee on existing subsidized kids through the end of May and cover any students who were enrolled but not attending the program.  However if you did not have any active referrals at the time the pandemic started or if you had very few subsidized students enrolled at the time, the amount of funds received from the stimulus was much less.  Also the subsidy program in Texas pays in the rears, so if you took on any new subsidized students during this time or your existing families maybe were able to get on the program, you did not get your first " 1 week payment" until two weeks after the student started receiving services from you.

    Texas had 17,000 + licensed childcare centers before the pandemic.  We currently have around 10,000 that are open or in the process of reopening.  Of those 10,000 centers, less than half have received any of the stimulus money that was intended to directly help childcare providers stay open or reopen.  These were separate funds from the PPP loans that some but not many childcare centers were able to obtain but now those funds have been depleted.  Unless the distribution model in Texas is modified, it will not matter how much more money the State receives from the Federal government that is ear marked specifically for childcare programs.  We have been trying to get this information in front of the decision makers in Texas, including the Governor, but so far no luck.

    Are providers in any other States experiencing the same problems?  If you haven't been receiving any federal funds, had you considered that this may be one of the reasons?  Looking forward to some feedback.

    Tim Kaminski
    Gingerbread Kids Academy
    Richmond TX