New York’s child care industry plagued by problems, primed for overhaul

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ALBANY — When Claudia Wolfgang converted her one-car garage into a classroom in 2020, she didn’t see it as a sacrifice. She saw it as an opportunity. 

While she was 10 feet away, reading to a gaggle of children, a handful of kids now had a space to learn. That was enough to replace the space with a smattering of desks, hundreds of books, jugs of paint, and more.

“We just kept the kids rolling,” said Wolfgang, an at-home child care provider in Rensselaer County. “That was the focus, just keep the kids with their normal day. Nothing will change.”

But things had changed. The focus of child care, intended for early development while providing relief to parents, was eclipsed during the coronavirus pandemic by a new set of rules: masks, distance, and a whole lot of bleach.

That added hours to the day and new costs that many providers couldn’t make up. Wolfgang was one of the lucky ones who managed to stay open.

A few days earlier, three child care providers Wolfgang knew made the difficult decision to close permanently. They sold some of their supplies, like toys and puzzles, to Wolfgang, but it didn’t soften the blow, she said.

The pandemic hit child care hard in New York. About 1,500 providers closed between April 2020 and last February — a span of just 10 months, according to data from the Schuyler Center, a research and advocacy group focused on family issues.

That’s not unique to the virus. Child care providers have been closing en masse in New York for years. There were close to 21,000 in 2014. By three years ago, that number had dropped to about 17,700, state data shows.

But while providers have closed, the total number of available spots has gone up — but only in New York City. Families outside the five boroughs have fewer options.

“A lot of programs have had to close because they just couldn’t make ends meet to stay open,” said Kate Breslin, president and CEO of the Schuyler Center. “We’re in a tough spot, where we’re trying to reopen, and so many programs have closed.”

At the same time, child care isn’t getting any cheaper, and it was already expensive before the pandemic ushered in a new wave of economic insecurity among middle-income New Yorkers.

Two parents with one kid could pay as much as $15,000 annually for child care on average, according to state data. But the household would only qualify for financial help from the state if they earn less than about $43,000 together.

Otherwise, they’re left to pay for child care on their own. At $15,000, that would be more than a third of that household’s income — about the same share nearly half the state’s tenants spend on rent, according to the state Comptroller’s Office.

It’s an impossible situation, but one that could soon be met with an overhaul.

Gov. Kathy Hochul is expected to include ideas for expanding access to child care in New York as part of her executive budget proposal in January, and sources said she’s tasked top officials in her administration with developing that strategy.

It’s not an unfamiliar issue for Hochul. She left her initial dream job as an attorney in the office of former U.S. Sen. Daniel Patrick Moynihan, D-N.Y., because she couldn’t find child care for her children in Buffalo while she was in Washington, D.C. After a few years of trying to juggle her family and her career, Hochul chose to return home to Erie County, where her political career would begin just a few years later.

Struggling to find care

Parents kept telling state Sen. Jabari Brisport, of Brooklyn, the same thing as he went along a nine-stop, statewide fact-finding tour over the past three months: they can’t afford child care but they also can’t find it.

“We talked to people that have just accepted the reality of waiting lists that are years long,” Brisport said.

One couple, he said, started calling child care providers right after their at-home pregnancy test was positive. They told him their hope was to get on a waiting list so that, by the time they go back to work after their child is born, a spot will be open for care.

That’s what happened with Casey O’Connor, a parent from the Capital Region with two children.

O’Connor has had his son with Wolfgang for more than two years now, first landing a spot with her when the boy was about 4 months old.  But when his daughter needed care, Wolfgang didn’t have an open spot. State regulations cap the number of pre-school children allowed at in-home group care programs at 12, and each spot was taken. 

“We pretty much begged to get in here,” O’Connor said. “We called her, like, every week.”

In the meantime, O’Connor shuffled his daughter between family and a center-based child care provider, the kind that’s in a brick-and-mortar facility instead of someone’s home. It was too expensive to send his daughter to the center-based provider full-time, he said, so he had to rely on his mother to make up the difference. And he couldn’t find another provider that would take his daughter full-time. 

“It’s not that they’re hard to find,” O’Connor said. “It’s that they’re hard to find spots in.”

One of his calls to Wolfgang eventually paid off. A spot had opened up for his daughter. He took it without a second thought. It meant that he would no longer have to juggle his two children between two complicated avenues of child care.

O’Connor’s story isn’t unique. The state Office of Children and Family Services, the agency that regulates and supports child care in New York, has acknowledged the existence of wide swaths of the state where providers are few and far between.

“That’s very real,” said Sheila Poole, the agency’s commissioner. “We know that’s a need that we want to be addressing in our child care deserts.”

Child care deserts are areas where demand for child care exceeds availability.  There’s no concrete data from the state on how many children in New York live in child care deserts, but a report from the Center for American Progress, a liberal think tank, puts the number at 64 percent.

New funding sources and financial incentives are seen as key to easing the supply problem.

That happened during the pandemic. After an infusion of federal funds, New York launched the Child Care Stabilization Grant program, a $1.1 billion fund that’s aided more than 12,000 providers since August. But that funding was temporary, and Poole said the state won’t be able to sustain it in the years to come without more help from Congress.

Providers scrape by

Winifred Joy Wellington couldn’t believe how little child care providers are paid — close to minimum wage, federal data shows — when she decided to open a facility almost five years ago with her son, Jason Wellington. 

“She’s like, ‘How are we going to retain staff?’ She went immediately to staff, because you need teachers,” Jason said. 

Even in New York City, which has among the highest rates of income per capita in the state, child care providers are paid an average wage of $15.29 per hour, according to federal data. That’s 29 cents above the minimum wage in the five boroughs.

Because of that, they often rely on public benefits to make ends meet, according to research from the Center for the Study of Child Care Employment at the University of California, Berkeley.

That doesn’t inspire a lot of providers to remain in the industry if another opportunity comes along, the Schuyler Center’s Breslin said. 

“If you don’t love it, or even if you do love it, if you can do something that is easier or less demanding and make more money, you can understand why somebody would do it,” Breslin said.

Child care in New York has to offer a level of instructional learning, physical activity, meals, and more, per state rules.

But there’s a feeling among the state’s providers that they’re underappreciated by the public, said state Sen. Jessica Ramos, D-Queens, who embarked on her own statewide child care tour in recent months. 

“These workers have been thought of as babysitters and actually what they’re doing is raising our children,” Ramos said. “We have to acknowledge the seriousness of this job.”

It’s also also an industry that presents challenges in terms of the opportunity for growth. That’s a disincentive for new providers to enter the field, Breslin said. 

“We don’t value our caring workforce,” Breslin said. “And, you know, the reality is, this can be a tough job.”

At the same time, it’s not always an option for providers to raise their rates to meet new costs, like higher pay for staff. That could put them at risk of losing business from parents who can already barely afford the service, they say.

Cost consumes parents

That’s step one — finding ways to sustain the state’s current collection of providers for parents. Step two, stakeholders say, is to address the cost burden faced by low-income families. 

At $15,000 each year per child, the average cost of child care in the Empire State is more than double the tuition for in-state students at New York’s public colleges and universities.  A median-income, two-parent household with an infant and a 4-year-old would spend nearly 40 percent of their annual wages on child care at that price, according to the Economic Policy Institute, a national research group.

Low-income families can receive public subsidy payments that help cover the cost of care. They’re distributed by local social services agencies, but largely funded by the state.

Those subsidies are available to households earning twice the federal poverty level or less. For context, the federal poverty level for a household of four is $26,500.

So, if the same two-parent household with an infant and a four-year-old earns more than $53,000 each year — which is lower than two full-time incomes at minimum wage for most in the state — they wouldn’t be eligible to receive a subsidy.

There are also families who qualify for a subsidy, but don’t receive one because of limited funds, Breslin said. 

That doesn’t mean subsidies are uncommon. About 132,000 children from 79,000 families received child care  subsidies in New York last year, according to the state.

While those subsidies cover most of the average cost of child care, there’s typically a difference that parents have to make up. That gap is a co-pay, and the state caps it at 10 percent of a household’s income above the poverty level.

It’s possible that, between the subsidy and a family’s co-pay, there will still be a gap between what’s paid and what a provider charges. In those cases, providers are allowed to work out an agreement with the parents, or deny those children from their program. 

Some families don’t have to contribute a co-pay, like those who receive public assistance or don’t have a permanent address, according to OCFS.

“Limiting out of pocket expenses for parents through a direct subsidy is absolutely crucial,” Poole said.

Amanda Key is one of the state’s thousands of parents who receive a subsidy to pay for child care, but cost isn’t her only problem.

She has two children, and both need child care. One has a spot at Joyful Beginnings, but the other doesn’t. The second child is old enough for school, but too young to be alone at home.

Key had to find a provider for her that was on the school’s bus route, but that wasn’t enough. She works non-traditional hours that don’t line up with the provider’s schedule, so other sacrifices had to be made.

“I have to leave work early to get them before the daycares close,” Key said. “If they were open until 6 p.m. or 7 p.m., I wouldn’t really need to worry about transportation.”

For parents who have family or friends that can offer care during non-traditional work hours, scheduling and transportation can be easier. But Key doesn’t have that support.

It’s worse for parents without reliable transportation in New York’s rural counties, which typically don’t have robust options for public transit. There is no safety net if parents don’t have a solution to those problems. That leaves some with an impossible choice to make, Ramos said.

“You fear the worst, that maybe some of these children are being left home alone, which is another part of the system we never talk about,” Ramos said. “There should be no excuse.”

Child care debate in Albany

If New York is going to breathe new life into the state’s child care industry, the next six months will be crucial. 

Hochul is expected to unveil her own plan for expanding access to child care in January. That starts the clock on an agreement with the Legislature before they’re scheduled to leave Albany for the year in June.

Ahead of Hochul’s proposal, two bills have already been introduced to expand access to child care for parents and support the state’s struggling providers.

After his statewide tour this fall, Brisport introduced the Universal Child Care Act — a bill that would make child care free statewide, regardless of income, and create new funding streams to support providers and their staff. Brisport’s bill would chart a course toward no-cost child care immediately.

At the end of a transition period, the state would do away with income-based support, like subsidies, and fully finance child care for every household that needs it, at rates that would match the cost of care from providers. 

“Right now, we have a patchwork of providers and complicated means-testing,” Brisport said. “And it’s important to be able to say that we’re going to move to a system where everyone, anywhere in the state can have access to child care.”

The Universal Child Care Act would also earmark funding to support costs for new providers, raise wages for their staff, and help build out physical infrastructure if they need it. It would direct more funds to providers that operate during non-traditional work hours.

The same idea is also found in a second bill to expand access to child care in New York: the Early Learning Child Care Act, sponsored by Ramos and Assemblywoman Sarah Clark, D-Monroe. Their bill would also create new tax incentives for providers that allow drop-in care, where parents can drop their kids in an emergency. 

 The Early Learning Child Care Act would create a support program regulated by the state Office of Children and Family Services. Child care would be free for families earning four times the federal poverty level or less. Above that, subsidies would be available on a sliding scale, with a co-pay ranging from half of one percent of a household’s income, up to 7 percent.

Households earning more than 10 times the federal poverty level — $265,000 for a family of four —  would not be eligible for a subsidy.

The Early Learning Child Care Act would create funding streams to support higher wages for child care providers, the general cost of business, and new construction when needed.  That would come with a catch. The bill would require providers that receive financial assistance from the state to pay their staff a minimum of $45,000 each year.

The legislation would also create an advisory panel of experts and stakeholders that could reject or modify new rules over child care from OCFS.

That all would be paid for through a small tax on New York’s largest businesses, according to the legislation. Employers would be barred from charging the tax to their workers.

Companies with more than $2.5 million in payroll expenses would pay a tax of one half of one percent on those costs. The tax would be capped at 1 percent for employers with more than $10 million in payroll expenses. 

“What the biggest businesses will be doing is investing in their workforce of tomorrow,” Ramos said. “They’re helping parents get back to work right now, but they’re also investing in the children who are years away from working for them.”

Both bills would cost the state billions of dollars, according to estimates from both lawmakers. Brisport said he would seek to raise income taxes on the wealthy to finance his plan. 

Others have argued for a second look at the state’s regulation of child care to ease costs for providers.

State Sen. Dan Stec, the highest-ranking Republican on the Committee on Children and Families, said lawmakers should consider those rules in any road to reform.

“Most people that get into this, they want to take care of kids, they don’t want to take care of paperwork,” Stec said.

Neither bill is likely to pass as written. When major pieces of legislation are introduced in New York, they’re often negotiated between both chambers of the Legislature and the governor’s office before they receive a vote, if at all.  The last scheduled day of the new legislative session is June 2.

Dan Clark is a managing editor for New York Now.