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Business leaders, advocates concerned education budget may fail community childcare services

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Business leaders, advocates concerned education budget may fail community childcare services

Jun 12, 2024 | 6:09 am ET
By Lucy Valeski
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Business leaders, advocates concerned education budget may fail community childcare services
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Stew Milne/States Newsroom

A legislative proposal in the next state education budget could hurt private childcare providers, individuals working in the industry said at a Tuesday press conference in Lansing. 

Michigan Gov. Gretchen Whitmer announced plans to offer free pre-K for 4-year-olds by the end of this year in her January State of the State address. The state is expected to pour additional millions of dollars into the Great Start Readiness Program (GSRP), which will extend state-funded access to pre-K in Michigan during the next fiscal year. 

But that funding might come with some baggage that makes it harder for smaller community childcare providers to pull a profit, Brian Calley, the GOP former lieutenant governor who’s now president of the Small Business Association of Michigan (SBAM). This could lead community childcare services to increase prices or even close, Calley said. 

“There is a proposal within the legislature today, competing proposals that are equally problematic on both sides of the Capitol to really undermine the sustainability of community-based organizations, nonprofits and small businesses that today provide such a critical role for our workforce in providing childcare, early childhood education, particularly in the Great Start Readiness Program,” Calley said. 

Calley called for lawmakers to reinstate Whitmer’s original budget for universal pre-K. Childcare experts and Calley expressed concern for two different changes made by the House and Senate separately in the Fiscal Year 2025 education budget. 

Lawmakers have passed their first versions of budget bills, but have not approved a final budget yet. Negotiations between legislative leaders and Whitmer are ongoing. The next fiscal year starts Oct. 1.

Chana Edmond-Verley, the CEO of nonprofit childcare service Vibrant Futures, said this is a critical time for expanding access to childcare, and the House and Senate proposal would go against that. 

“The governor recognizes that we are in a time where there is widespread systemic lack of childcare, and folks are trying to go to work, and so even economic developers are calling it now, critical infrastructure,” Edmond-Verley said. 

Business leaders, advocates concerned education budget may fail community childcare services
Brian Calley, president of the Small Business Association of Michigan, speaks about how the education budget could harm small childcare providers in Lansing on June 11, 2024 | Lucy Valeski

In the House, lawmakers made a change to the education budget (HB 5206) that removes funding requirements to “community-based providers.” In Whitmer’s proposal, private, independent providers could team up with a public provider to assist with their services and the private childcare would receive a 30% allocation.

However, House lawmakers struck this language in the budget, raising concern for private childcare providers. Now, public and private childcare services will compete with one another, rather than working together, said Marcus Keech, the director of government affairs at the Grand Rapids Chamber. 

“This is not just concerning, but it gives those public providers control over all GSRP funding and no reassurance that private providers will be part of this model,” Keech said. “We jeopardize these providers not being able to keep their doors open.”

The Senate proposed a change in SB 751 that would require teachers at community-based providers to make as much as an average GSRP educator in the state-designated region, after adjusting for years of experience.  

Keech said this is not fair to the community provider because public child care receives additional revenue from state and local taxes, which would equip them to pay teachers more.

Edmond-Verley and Matt Gilliard, a Democratic former lawmaker who’s now president of advocacy group Michigan’s Children, said the House and Senate plan would disproportionately impact women and people of color who work and own small childcare businesses. 

“As an entrepreneur, these women-owned businesses and women-led organizations make dreams possible for families to go to work, to better their lives, to provide care for the children,” Edmondy-Verly said.