Childcare Providers Feeling Pressure in Legislative Budget

Childcare room.

Providers Facing Financial Hurdles from State Senate and House Proposed Budget

Recent budget proposals threaten the sustainability of private and community-based childcare providers in Michigan, jeopardizing the progress made in the sector. While Governor Whitmer has supported childcare providers more than any other governor in Michigan’s history, legislative proposals to add costly mandates and redirect funding could close providers, negatively impacting West Michigan.

Proposed House Legislation: The House budget removes language that requires at least 30% of total GSRP allocation to ‘public and private for-profit and nonprofit community-based providers.’ The House language now requires that all GSRP providers use funding ONLY for classrooms operated by the ISD or constituent districts.

Proposed Senate Legislation: The Senate budget includes language that requires community-based providers to pay teachers within the Great Start Readiness Program a salary no less than the average GSRP salary within their respective prosperity region.

What West Michigan Providers Have to Say: At Big Steps Little Feet, a privately owned childcare provider, they understand the necessity for preschool teachers and childcare workers to earn a livable wage, however, mandating that private business owners pay employees based on regional averages misaligns with the childcare industry’s structure.

“There is going to be a gap of educated and trained childcare teachers who do not have the experience and the education to support that kind of salary position,” said Jessica White-Hatinger, Director of Operations at Big Steps Little Feet. “So, what is the expectation for how we compensate people for their work if they don’t have the expertise to support it in a manner that gives respect and dignity to the people who do?”

White-Hatinger points out that both privately owned childcare facilities and working families are already struggling to make ends meet.

“The profit margin in childcare is so small. 75% of our budget goes to wages,” said White-Hatinger. “Big Steps, Little Feet is a one-owner-operated center that has been in business for 30 years and has wavered some serious storms, COVID being one of them. But now, we have to pivot to something that might cost more than we can feasibly provide, which ultimately, in the end, hurts working families.”

Cost and capacity are major concerns.

“The cost and accessibility of childcare in West Michigan is already at a catastrophic level, and any legislative action that could increase that level will prevent our region from continued growth,” said Marcus Keech, Director of Government Affairs at the Grand Rapids Chamber.

“The talent pool will decrease, as parents are forced to leave the workforce due to lack of access. The cost of living will increase due to the increased cost of care in the region, forcing parents to make the difficult choice of whether their wages outweigh the cost to work.”

In recent years, the YMCA of Greater Grand Rapids, a community-based organization, has focused on expanding its preschool operation and is a proud implementation partner of GSRP in Kent County and has 70% of the four-year-old children served by the YMCA enrolled in GSRP programming.

“Community-based preschool providers increase access to high-quality early learning programs for many families,” said Dawne Bell, Vice President of Youth Development for the YMCA of Greater Grand Rapids. “For decades, we have worked in partnership alongside school-based preschool providers to expand and grow our preschool classrooms, offering extended learning options [like early drop-off, late pick-up, and year-round summer programming] to meet the needs of families. For organizations like the Y, the continued expansion of high-quality preschool in Michigan must center families with the highest needs first and [it] must start with community.”

As negotiations between chambers and the executive branch begin, the Chamber is urging legislative leaders to protect childcare providers in the budget. “Supporting private childcare providers, often small and minority-owned businesses, directly impacts the community’s growth and the next generation’s development,” said Keech. “The GR Chamber calls on the business community and concerned citizens to join the advocacy efforts to protect these essential services.”

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