The Minnesota Legislature made historic investments in child care. It’s not enough.

Gov. Tim Walz and Democratic lawmakers have been pushing an ambitious goal since taking control of state government last year— make Minnesota the best state in which to raise children. 

Lawmakers argue their investments in early learning and child care this past legislative session did just that.

“This budget is about making Minnesota the best state in the nation for children and families,” said House Majority Leader Jamie Long, DFL-Minneapolis, earlier this year when the House approved nearly $1.3 billion for child care and early learning. The new money, he said, “is inspired by the people and places who are asking for change, because the status quo hasn’t been working well for a very long time.”

To be sure, the Legislature will spend significantly more on early learning during the next two years, but it’s just a drop in the bucket compared to the need, data show.

The new money increased the number of subsidized slots for lower income Minnesota children by about 19,000, according to state data, bringing the total to an estimated 55,000.

But Minnesota has over 330,000 children under age five, and many of the state programs have income caps, meaning the subsidized slots aren’t available for many middle class families.

The benefits of quality child care and early learning programs can be profound — and not just for the child. 

About 90% of brain development occurs by age five, and early childhood education and child care can have a positive impact on their social, emotional and academic wellbeing, according to a state report analyzing Minnesota’s child care landscape.

That’s just one of several benefits of a robust child care and early learning program, however. 

Universal child care would likely allow many Minnesotans to return to the workforce, providing some relief to the state’s tight labor market. That’s because many parents are staying home with children because once they factor in child care costs, the financial benefits of working are negligible.

Indeed, the costs can be a staggering line item on a family’s budget, surpassing a mortgage payment for families with more than one child in daycare. Statewide, child care ranges from $253 per week for a preschool aged child to $330 per week for infants, according to Child Care Aware of Minnesota. Minnesota has some of the highest child care costs in the country. 

Earlier this year, a state task force recommended that Minnesota families pay no more than 7% of their income for early care and education. Currently, married couples pay an average of 11% for child care, while single parents pay on average 25%, according to Child Care Aware.

Rep. Dave Pinto, DFL-St. Paul, who is the House Democrats’ leader on the issue, said there is more to do to make child care more affordable and to support the workforce in Minnesota, but the state is much better off than others.

“This has been a drastically underfunded sector for decades,” said Pinto, chair of the House Children and Families Finance and Policy committee. “Minnesota’s made amazing progress on this, and we’re doing the best we can, knowing what a huge benefit it is for the state when you make progress in this area.”

The pandemic threw child care providers into crisis even as they were needed more than ever and many families struggled to pay for it.  

In early 2021, Democrats passed President Joe Biden’s American Rescue Plan, including $24 billion for child care stabilization grants and $15 billion to make child care more affordable. That funding will expire at the end of September.

Pinto said the child care and early learning efforts the Legislature made this session were meant to help those who needed it the most. “We’re starting with the lowest income and most vulnerable kids,” he  said. 

Part of that effort is to address workforce shortages in the child care industry, which are exacerbated by low pay for its workers. Those workers can often find higher pay in retail and restaurant jobs given wage growth in those sectors in recent years. The Legislature passed a new grant program — $316 million during the next two years — that child care centers can use to increase wages. 

Courtney Griener, owner of the Esko Mini child care and preschool center near Cloquet, Minnesota, said she has been able to increase her teachers’ pay to $18 per hour permanently thanks to the new state grant program.

She said Esko Mini has 96 children enrolled, but the need in the area is even greater. They stopped accepting people to their 50-person waitlist about three months ago, knowing that it didn’t have the staff to enroll more kids. 

The lower pay and a lack of reliable, affordable benefits — like health insurance and retirement — also lead to high turnover rates.

“Our teachers are willing to make the sacrifices they are making for the kids, but they shouldn’t have to,” Griener said.

Kraig Gratke, executive director of the Minnesota Head Start Association — which serves about 15,000 children across 33 programs statewide — said a workforce shortage and low pay has been impacting Head Start’s ability to attract and retain staff.

“We see Aldi, McDonald’s and places like that competing for our staff. They’re paying enough and there you don’t have all that kind of responsibility for little kids all the time,” Gratke said.

The Legislature also passed a significant child tax credit that may help families defray the cost of pricey child care while also reducing child poverty. Though the state has a long way until reaching universal child care, DFL legislators and the Walz administration believe Minnesota is on the right path to improve livelihoods for kids.

“We have a huge need in our state,” said Erin Bailey, assistant commissioner at Minnesota Management and Budget and executive director of the Governor’s Children’s Cabinet. “We were able to achieve much of what had been on the agenda for decades, but I would not say that means the job is done.”