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Federal funds helped Arkansas childcare providers stay afloat, but staffing struggles continue


Federal funds helped Arkansas childcare providers stay afloat, but staffing struggles continue

Nov 20, 2023 | 7:00 am ET
By Tess Vrbin
Federal funds helped Arkansas childcare providers stay afloat, but staffing struggles continue
(Rebecca Rivas/Missouri Independent)

Sherrie Gillespie wasn’t sure if the daycare center she runs in Monticello would survive the COVID-19 pandemic.

“I may have stayed open, but I know I would have had to cut some services in order to maintain payroll and pay bills,” she said.

Thanks to $445,000 in federal grant funds, Head of the Class Childcare and Learning is not only still in business but has renovated its site, given its employees bonuses and increased its quality rating in order to receive more state funds, Gillespie said.

More than 1,600 childcare providers throughout Arkansas received a total of more than $258 million in American Rescue Plan Act (ARPA) funds between 2021 and 2022, according to data from the state Division of Childcare and Early Childhood Education within the Department of Education. Arkansas received a total of more than $1.5 billion in ARPA funds, aimed at covering costs incurred during the pandemic.

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The Department of Education gave applicants for the childcare grant money a wide variety of options for how to use it, including repairs and renovations to classrooms and playgrounds, retention bonuses for staff, technology upgrades and professional development, among other things.

Childcare providers had to be strategic about their use of the money since it was a one-time grant, the directors of several childcare centers told the Arkansas Advocate.

Hot Springs Child Care Center received $730,500, the largest individual share of childcare grant money in the state. The vast majority of the money went to replacing physical materials in classrooms, owner and director Teri Grisham said.

Grisham used some of the funds to hire temporary additional staff but did not bolster permanent employees’ pay, since “it would be hard to use that money for payroll because you know it wasn’t going to last forever,” she said.

Entry-level hourly wages for childcare workers are below $13 per hour in Arkansas. Meanwhile, kindergarten teachers now make $50,000 annually thanks to the Arkansas LEARNS Act. Daycare and preschool directors say the wages they offer can’t compete with that, and recruiting and retaining childcare workers is an ongoing struggle in the field.

“When you’re paying $12.78 per hour and you expect quality childcare, it’s hard unless you find someone who really, really cares for children,” said Mindy Shaw, the preschool director in the Batesville School District.

Olivia Gardner, education policy director, Arkansas Advocates for Children and Families
Olivia Gardner (Courtesy of Arkansas Advocates for Children and Families)

The $24 billion that ARPA distributed nationwide to fund childcare during the pandemic expired Sept. 30, and advocates became concerned that childcare facilities would close and the industry would suffer.

However, Arkansas childcare providers have had months to use the grant money for long-term stabilization of their services, said Olivia Gardner, director of education policy at Arkansas Advocates for Children and Families.

“During the pandemic, Arkansas actually added [childcare] spots and facilities, so we’re not exactly in a situation that feels as dire as other states may be in right now,” she said. “…I don’t think it’s likely that we’re going to see a wave of closures.”

child care grant

Financial sustainability

Gardner agreed with childcare providers that employee recruitment and retention is a challenge. Some childcare workers in Arkansas received salary increases in the past year, directly or indirectly due to the grant money.

The Batesville and Hamburg school districts received $659,000 and $301,750 in grant money, respectively. Both increased their preschool teachers’ salaries to $50,000 per year in response to the LEARNS Act, which gave K-12 teachers this pay hike but did not include preschool teachers, the preschool directors in both districts said.

Both preschools also invested in new playground equipment and classroom remodeling, said Shaw in Batesville and Christa Aycock in Hamburg.

Aycock said Hamburg teachers and administrators are anxious to see if the Legislature takes action on preschool teacher pay.

“We’re not being frivolous with the spending [of the grant funds] right now because we don’t know what the future holds with the LEARNS Act,” Aycock said.

Gillespie said she is frustrated that the LEARNS Act did not give raises to preschool teachers, especially those who participate in the state-funded Arkansas Better Chance (ABC) program, which serves children 5 and under “exhibiting developmental and socio-economic risk factors,” according to the Department of Education website.

“I think it’s unfair for us to have to do a lot of the things the school district does… but my certified teachers don’t get that money,” Monticello’s Gillespie said.

When you’re paying $12.78 per hour and you expect quality childcare, it’s hard unless you find someone who really, really cares for children.

– Mindy Shaw, Batesville School District preschool director

More demand than supply

Head of the Class employees received bonuses from the grant funding. Gillespie said she did not immediately give them raises but will be able to in the future after using grant funds for training that boosted the facility’s “Better Beginnings” quality rating.

The Arkansas Department of Human Services used to rank childcare provider quality on a scale of one to three but recently broadened the scale from one to six, with six being the highest quality. Professional development brought Head of the Class to a level six rating, which will bring in more state funds and allow Gillespie to increase her employees’ pay and hopefully provide insurance benefits, she said.

Not all childcare facilities offer benefits to their staff, said Jennifer Tucker, vice president and program administrator at the After School Program, which has 22 locations throughout Northwest Arkansas.

The After School Program received a total of more than $3 million in grant funding, awarded individually to most of its facilities. Tucker said the money restructured the network’s budget and made room for raises, benefits, and the addition of new classrooms, including a new 13-classroom facility in Lowell that will open next year.

Grant funding is essential not only to keep childcare facilities open but to keep them affordable for families, Tucker said.

“It’s costly to run a quality facility, so you can’t really go down in your rates when staff salaries are 90% of your budget,” she said.

Arkansans face more challenges than most accessing child care, report shows

The After School Program’s preschool classrooms are “at capacity with a very long waiting list,” Tucker said, and she expects the new location in Lowell to fill up as soon as it opens.

Southeast Arkansas overall does not have enough childcare providers, Gillespie said, and Head of the Class is also expanding its classroom space in order to care for more infants.

Grisham and Gillespie both said they have a few early-career employees and several more with years of experience. Recruiting new, qualified early childhood educators has proven difficult, especially since the pandemic, they both said.

Gillespie said some of her longtime employees are nearing retirement and replacing them will be a challenge.

“The people I could hire aren’t ready for childcare at this level,” Gillespie said. “They think we’re babysitting, and we’re not.”