Fewer staff, fewer classrooms, lower pay: What losing ARPA money meant to an Alabama day care
Tejuania Nelson-Gill can already see the impact of losing federal child care stabilization funds.
Those grants, offered through the American Rescue Plan Act (ARPA), were a lifesaver for Lighthouse Academy, a child care center in Bay Minette licensed for 120 children. Nelson-Gill, the executive director of the facility, was able to buy materials for teachers and do some repairs around the facility.
But she used most of these funds to give teachers an extra bonus, on top of the $3,000 quarterly bonus provided by the workforce grants.
Now, the bonuses are gone. And her employees are starting to struggle.
Jasmine Purifoy, one of the staffers at the facility, has fallen behind on her bills. Her pay has gone down significantly since the bonuses expired in September. Earlier this month, the car she was able to purchase because of the bonuses was repossessed.
She had to choose between paying rent or her gas bill. She chose rent. Her gas was shut off. Purifoy and her four-year-old daughter now go to an aunt’s house, where they can get heat and hot water.
“Last year, everybody was okay. Everybody was able to buy their children different things for Christmas, but this year, we have to choose between our bills and getting our children something for Christmas,” Purifoy said. “And it’s hard.”
Purifoy said she started working in child care 14 years ago, making $7.25 an hour, the federal minimum wage. These days, she makes $10 an hour. The bonuses, she said, helped her stay afloat.
“Now we’re just trying to maintain it, just do all I can,” she said. “But that bonus, it really did save us and helped us a lot.”
Around $40 billion from the ARPA funds was allocated to support the child care industry, and the financial support helped child care centers to maintain stability in their businesses during the pandemic. It played a crucial role in retaining workers by allowing facilities to increase wages during a period of intense job market competition.
But the funds ended in September. And that could leave over 33,600 children in Alabama without access to child care, according to an analysis from Century Foundation, a progressive think tank, and 577 child care facilities in the state could close.
Child care workers in Alabama make slightly less than $11 per hour on average, an yearly income of about $23,000. The nation’s average is about $13.42 an hour, or about $28,000 a year.
With the quarterly federal bonuses, these workers saw their income rise by up to $12,000 a year. That meant child care workers could potentially make as much as $35,000 a year, about $5,000 over the median income for an individual in Alabama.
The grants were not the only source of federal money for child care centers. Nelson-Gill also received Temporary Assistance for Stabilizing Child Care grants, which gives child care providers $2,000 for each daytime child care slot to help cover operational costs.
But the loss of the ARPA funds has forced Nelson-Gill to close classrooms and cost her Lighthouse Academy six staff members. Child care workers, she said, are simply able to make more money in industries that don’t require as much training.
“I’ve lost a few teachers to fast food and Walmart,” she said. “So that’s the competition now.”
Before the COVID pandemic, Nelson could pay staff with no experience $10 an hour. Post-pandemic, applicants with no experience went up to $13 an hour — what she was paying teachers with a state certification or an associate degree prior to the pandemic.
“I hate to say it — right now, and I’m not the only one, a lot of child care providers are hiring — If you can pass a background check, we’re hiring you. That’s the state we’re in now,” she said. “And that’s sad to say.”
She recently decided to shut down three out of nine classrooms permanently. Every time she tried to open a new classroom, staffing issues forced her to close it.
And retaining staff is difficult. The work is much tougher than what people expect it to be, and the pay is not enough to keep them.
“A lot of people look at us as babysitters, and we’re not,” Nelson-Gill said. “We’re not babysitters. We don’t let the children watch television all day. We were educators.”
Nelson-Gill used to keep a waiting list of potential clients in case there was space. But with over 80 children waiting for a spot at Lighthouse Academy, she stopped adding to the list — instead telling parents they simply don’t have space.
But Nelson-Gill also said that the grants, while helpful, were only a short-term solution for a system that has struggled for years, long before the COVID pandemic.
“We need to look at long-term solutions when it comes to childcare in Alabama, because our state does not look at us as educators,” she said. “And early learning is the foundation to later learning.”
House Minority Leader Anthony Daniels, D-Huntsville, and Sen. Garlan Gudger, R-Cullman, introduced separate bills last spring that would have created tax credits for employers to fund child care for employees. The bills did not move out of committee.
Daniels said in an interview that a lack of access to child care is a barrier to increasing the state’s low workforce participation rates.
“Access is an issue and affordability is an issue,” he said. “If you’re working a full-time job and you break even on the cost of child care, that’s kind of a no brainer, right? That a person would choose to stay home because you’re paying everything that you’re making in child care costs.”
Daniels plans to reintroduce the bill in February’s session. It would provide stipends per child based on the facilities’ ratings, up to $2,000 per child for a five-star facility. He said the idea is to increase competition and quality of child care.
“You’re providing a quality service because the amount that’s received is going to be based upon the five-to-one star rating: five-star meaning the higher reimbursement,” he said.
The bill would also provide employers a credit of up to $1 million to build their own in-house child care facility or to provide a stipend to employees for child care.
The Legislative Fiscal Office did not analyze the impact of the bill on the Education Trust Fund last year. Daniels argued that with increasing workforce participation, that money will come back to the state via tax collection.
“If a person is working, they’re paying more in taxes,” he said. “You’re basically creating opportunities to increase your tax base, at the same time, providing the credit.”
Nelson said that the state needs to focus on child care from birth to age three as much as it focuses on pre-K, generally considered to start at age 4.
“You see this pre-K classroom with all these nice materials. The teachers are getting paid $20 to $30 an hour, and then you walk right into another classroom next door, and it’s poor quality. There’s a break right there. There’s something wrong,” she said.
Even with the challenges that come with child care and without adequate compensation, Purifoy said the children brings her back to work each day.
“I still come and make the best of it, because the kids – they need someone with that love and care for them,” she said. “So that’s why I still come and just try my best to make the best of it.”