And if nothing changes, the state may face cuts to child care spending since a pool of federal money the state has been using to fund child care is running out.
Child care operates off slim margins, even though child care workers are some of the lowest-paid workers in the state.
Credit: Bryant Billing
Credit: Bryant Billing
“Just to put it in perspective, for every $1 that a child care center brings in, about 76 cents of that goes to pay an employee,” said Kim Kramer, CEO of Mini University, a local child care center rated as high-quality. “And we’re not even talking benefits yet, if most child care centers can even afford to offer benefits.”
Funding changes
The problem isn’t necessarily a lack of funds, it’s how the payments are being administered.
As part of the state’s overhaul to child care, larger payments were allocated to facilities, but the number of hours a center has to care for a child to charge a full-time rate rose from 25 hours to 33 hours. Many families can’t meet that new threshold.
Markida Jackson, of Hamilton, said her business, Loving Babies N’ Tots in Fairfield Twp., employs four full-time workers and one part-timer and is directly impacted by this new requirement.
Anything less than 33 hours pays at a part-time rate, even if the child is in care only one hour short of the new threshold.
“I no longer take part-time vouchers,” she said. “It’s not feasible to me, and I’m not going to waste my time feeding your child with my money because I’m not on a food program due to the area that I am in.”
Jackson noted a full-time child brings in $332, while a part-time rate dropped her reimbursement to $174 for essentially the same care.
Credit: Nick Graham
Credit: Nick Graham
David Hood, executive director of Abilities First in Middletown, said about 80% of the families his center serves receive some form of governmental support to subsidize childcare.
“That has been a major challenge for our families,” Hood said of the new rules. “Because more children are not meeting that full-time threshold, the total funding we’re receiving is decreasing.”
Kramer said her center is seeing significantly less reimbursement from the state under the new rules. She said she’s been in meetings with a significant number of providers who say they are afraid they won’t be able to pay their workers because of the changes.
“Honestly, it’s been a long time since I’ve heard so many different providers say, we are afraid if we can make payroll,” Kramer said.
Jodi Norton Trimble, a spokeswoman for the Ohio Department of Children and Youth, said part-time hours are now between 10 and 33 hours in a week.
“At the same time these changes occurred, DCY initiated a market rate increase, adding an additional $104 million into Ohio’s publicly funded child care payment system,” she said. “We hope this increase in market rate is helping providers manage through the category changes.”
Fiscal cliff
Ohio’s next governor is going to inherit a financial challenge in maintaining or expanding Ohio’s publicly funded child care system.
Lynanne Gutierrez, president of child care advocacy group Groundwork Ohio, says the state’s publicly funded child care system is facing a fiscal cliff by fiscal year 2028, the first budget for the next governor.
Child care in Ohio is mostly funded by federal funds, including the Child Care Development Block Grant and the Temporary Assistance for Needy Families grant, which also goes to traditional welfare.
Under former governor Jon Kasich, Gutierrez said TANF funds were underspent and Ohio built up savings in the program. But spending increased under current Gov. Mike DeWine, drawing down that savings.
The funds are now running out.
The state staved off the cliff for a few years using federal COVID-19 funding, but that money is also running out.
If the money runs out and the state doesn’t put more money towards child care, there will likely be cuts to the program totaling around $3 million. Gutierrez estimated that around 30,000 kids would no longer be served.
Even if the money is lost briefly and the state ends up putting in funds, Gutierrez argues that isn’t enough. Even a month or two where daycares can’t cover all their expenses can be enough to close the daycare or downsize, which would remove spots.
Payment delays
Helping young Ohioans has been a major priority for Ohio Gov. Mike DeWine, whose second term ends this year. The state recently created the Department of Children and Youth, which focuses entirely on children.
“I do think that’s the biggest, most transformational change that Governor DeWine has made is creating that Department of Children and Youth where we have a dedicated team focused on it,” said Robyn Lightcap, executive director of Preschool Promise, a nonprofit that promotes high-quality preschool in Montgomery County.
But some intended improvements are coming with unintended consequences. One change made was requiring families to apply for funds directly, streamlining the pathways for families.
Credit: Bryant Billing
Credit: Bryant Billing
But because the state has changed workflow, some families are still waiting for payments to be made to schools that families applied for last summer. The delay in funds caused Dayton Public Schools to reconsider preschool, choosing to offer it at just a handful of locations next school year and charge parents a preschool fee. DPS officials say most families should qualify for enough state and local assistance that the fee will be minimal.
Worker pay
The median hourly pay for an Ohio child care worker is $13.44, meaning in many cases, a child care worker could make more working for Target or McDonald’s.
“It makes it really hard to sustain and retain and keep really qualified staff when you’re paying such low wages and you’re competing with other sectors,” Lightcap said.
Lightcap argued that getting the funds to pay child care workers a better wage would lead to safer outcomes for children and more education. But she says that can’t happen without government funds.
Credit: Nick Graham
Credit: Nick Graham
“We have to believe that it’s a child’s right ... that no matter what your parent’s income is, no matter what your income status is, no matter where you live, you have a right to a high-quality education,” Lightcap said. “And I believe that education starts at birth, not at kindergarten.”
Jackson says that in addition to being underpaid, child care workers also are overwhelmed with requirements and an increasing workload, from conducting frequent assessments and creating and updating curriculum to managing referrals for children who fall behind.
“It’s not fair, so then it makes the owner step in to do more work, so they’re able to keep the staff member,” she said.
Also adding to that strain are efforts needed to meet the state’s updated star‑rating requirements and taking on responsibilities that Jackson said should fall to the state, such as administering surveys to determine family needs.
To retain staff, she adds small perks:
“I bring in doughnuts. I give out prizes on Friday,” Jackson said. “I have to do a lot of accommodations to keep them happy for $13 an hour.”
