‘A broken system’: Idaho child care providers say they need more help to keep costs down

Editor’s Note: This is the second in an ongoing series of articles related to the cost of child care and lack of state support for early childhood education. The first story can be found here.

When tuition and federal support are factored against costs per year at Boise-based child care center Giraffe Laugh, the budget margin comes out to $600.

The center is a nonprofit, unlike most day care facilities around the Treasure Valley, which allows them to fundraise, Executive Director Lori Fascilla said. Without that, the budget would be even tighter or impossible to maintain.

Fascilla’s center is one of many across Idaho with tight margins that have struggled throughout the pandemic. The Idaho Department of Health and Welfare is implementing a higher reimbursement rate through the Idaho Child Care Program in October as one step toward relief for the industry, but even program specialists within the agency say more needs to be done.

Decreasing enrollment and difficulties hiring and retaining workers have caused more than 200 centers across the state to close in the past year and a half, and providers say that has only been made worse by other industries increasing wages across the Treasure Valley in an attempt to be competitive and fill positions. Walgreens has boosted its starting wage to $15 per hour, and the advertised wage for an Amazon warehouse team member in Nampa is $18.20, plus a $3,000 sign-on bonus.

Like any business, the largest cost for Giraffe Laugh’s three centers across Boise is labor, at about $941,000 per year. That works out to an average wage of $11.70 per hour, which is just about the mean wage of $11.73 for Idaho’s 2,200 child care workers, according to the Idaho Department of Labor. The entry wage is $8.54.

The income received for caring for 127 children at the three centers is $1.19 million, at a full-time rate ranging from $826 to $1,036 per month for ages 0 to 5.

Federal subsidies for child care still fall short of true costs, providers say

The three centers combined receive $175,000 per year from the Idaho Child Care Program, which is a subsidy program funded through the federal government to assist low-income families with the cost of child care. Ericka Rupp, who manages the program, said it is part of the Child Care and Development Block Grant, which is broken down into various amounts by state, tribe and territory across the United States. Idaho received $45 million in block grant funding for 2021, with $9 million in state matching funds.

Out of approximately 1,100 providers known to the state, Rupp said between 800 and 900 qualify to participate in the child care program, and others who go above and beyond to provide what is deemed high-quality child care can participate in the IdahoSTARS program. Higher quality centers that participate in programs like IdahoSTARS, where workers must complete CPR and first aid training on a regular basis, pass health inspections and complete 12 hours of professional development training per year, do not receive higher subsidy amounts in Idaho, Rupp said.

But even the subsidies fall short.

“The state of Idaho is doing the best (it) can, but there’s other states where (state funds) will flow into that fund so that everybody has access to quality care,” Fascilla said. “Even with our rates, the Idaho Child Care Program (reimbursement) is about half what we charge for an infant.”

That’s something the Idaho Department of Health and Welfare is aiming to mitigate starting Oct. 1. The subsidy is calculated based on the market rate of clustered counties across Idaho with similar child care rates, said Aubrie Hunt, program specialist with the Idaho Department of Health and Welfare. While Idaho has historically calculated the subsidy based on the 65th percentile of the market rate in an area, that will go up to the 75th percentile in October, with a slightly higher amount for infant care. Hunt said that is considered best practice nationally, and the goal is to help providers charge enough to sustain their business while also preventing them from arbitrarily increasing their rates.

While the state does provide those matching funds for the subsidy, Idaho is one of only four states — including New Hampshire, South Dakota and Wyoming — that does not provide any state funding for pre-K programs.

Federal food reimbursement programs too difficult for most providers to use

On top of the cost of tuition, many providers do not provide meals for children, instead asking parents to pack food. Giraffe Laugh is one of few that provides breakfast, lunch and a snack daily with support from the federal Child and Adult Care Food Program, which Fascilla said is a cumbersome bureaucratic program that most other providers don’t want to go through the effort of navigating. The program also reimburses a center based on family income levels, so if a center has fewer low-income children, the reimbursement rate is lower.

The program is also prescriptive in what foods can be selected to serve children and must be based off of the U.S. Department of Agriculture’s food pyramid. Menus must be documented, recorded and reported to the federal government. To run the program requires cooks and an administrative staffer whose main role is managing the associated paperwork.

Melissa Buck, who is the director of Vista Montessori School in Boise, operates her school out of an older house and said the setup inside doesn’t easily allow for meal preparation. She looked at the food program just for snacks, and said it was too much paperwork.

Human resources are still the key to survival of child care centers

Centers across Idaho still say wages are the biggest issue when it comes to costs. Enrollment numbers are lower than capacity at Fascilla’s centers and Buck’s school, as well as Kids Choice child care center in Meridian, which is operated by Robin Findl. Buck said she has 36 children enrolled right now and is licensed for 52.

Particularly when the centers are competing with surrounding school districts, it is difficult to keep employees.

“I started looking at Boise School District’s wages and I did a backwards budget … and in order to operate my own facility, if I were to match those wages, I would be charging a minimum of $1,200 a month per child,” Buck said. “So I think that in itself speaks for where that gap is, because we can’t really charge that to parents.”

Providers fought for funding from the Idaho Legislature that allowed them to implement a wage enhancement to potential employees, but especially in the Treasure Valley, it hasn’t made as much of a difference attracting new employees as they hoped it would.

“It helps retain the people that have a passion for this job, but people that are looking for a position, there’s just nobody out there that wants to work in a child care setting or preschool,” Findl said. “And if they do, here we are placing ads right now and I’m looking at $1,000 sign-on bonuses (in other job listings) and it’s like, ‘OK, well I can’t do that.’”

Cost of living in the Boise area has also caused one employee at Giraffe Laugh to be forced to move back to Arizona because her rent just increased by hundreds of dollars.

“It used to be a career path, and now it’s an entry-level job, and I hate that,” Findl said.

Providers also typically can’t afford to pay for employee health insurance and other benefits, which doesn’t help with retention efforts.

The system is stuck in a holding pattern, said Hunt.

“I say all the time that child care is a broken system,” Hunt said. “Child care providers cannot afford to make any less, and parents can’t afford to pay a penny more. So it will take outside intervention to correct the system.”