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Childcare Providers Feeling Pressure In Legislative Budget

Private providers are facing financial hurdles from the State Senate and House proposed budgets 

The Grand Rapids Chamber has prioritized accessibility to affordable and quality childcare for employees across West Michigan. That is why the Chamber has championed initiatives like the MI Tri-Share program, legislative reform in 2022 to support working families and providers alike, and increased funding to support the creation of slots across the region. 

Now this progress is facing a significant potential challenge.  

 

House Appropriations School Aid Budget

What happened: The House budget removes language (Sec. 32d[13]) 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. 

Why this matters: The Governor has emphasized her priority with Pre-K For All. This program requires that providers must be GSRP certified and funding for this program is through a GSRP expansion. If this program is implemented with the proposed budget language, private providers will be in jeopardy of losing all 4-year-olds within their program. Due to state-mandated ratios for childcare providers, these providers will face significant strains on finances due to the loss of tuition from an age where more can be cared for by a single teacher. For more information on Michigan’s childcare ratios, you can visit here. 

Background: For more than a decade, 30% of all Great Start Readiness Program (GSRP) funding through the State budget was allocated to go toward community-based organizations (CBOs). This allowed for privately-owned childcare providers to access state funding so that they too could become a GSRP-certified childcare provider. A GSRP-certified provider is committed to quality early learning experiences for the children they serve. 

 

Senate Appropriations School Aid Budget

What happened: The Senate budget includes language (Sec 32d[5][e]) that requires community-based providers to pay teachers within Great Start Readiness Program a salary no less than the average GSRP salary within their respective prosperity region. 

Why it matters: GSRP programs range from private providers to school districts providing Head Start and other childcare services. By incorporating all these GSRP programs and teacher salaries, it will inflate the average salaries without taking into consideration the resources available to each separate type of GSRP provider. In an environment already stacking cards against these private providers, difficult decisions will be made that could include a significant increase in tuition costs to account for an increase in operational costs. 

Background: School districts that provide GSRP early care receive financing through many levels of public funding. Funding for private childcare providers is done mostly through tuition on the children they serve. With more funding sources for schools, salaries are directly benefited, therefore by not allowing for these same funding streams for private providers there is a misrepresentation on what is ultimately attainable for these providers. 

 

Why does this matter for the business community?

First and foremost, private childcare providers are small businesses, and in many cases these are minority and women-owned businesses in our community. Supporting these business leaders has a direct impact on the growth of our next generation. With both the House and Senate proposed changes to the budget, providers will both lose access to state resources and be required to increase salaries for teachers. Pairing with the potential loss of (in most cases) the only age demographic that is profitable for a provider, these businesses will be faced with options of closure or tuition increases. 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. The talent pool will decrease, as parents are forced to leave the workforce due to lack of access. Cost of living will increase due to the increased cost of care in the region, forcing parents to make the difficult choice on whether their wages outweigh the cost to work. 

In an economy that is still recovering from the pandemic and vacancies remain unfilled with the lack of a talent pool, an attack on private childcare providers is an attack on the entire business community. 

 

How can you help?

With the final Consensus Revenue Estimating Conference (CREC) having been completed on May 17th, legislative leadership will now begin negotiations between chambers and the executive branch. Contact leadership within the Senate and House and demand that privately-owned childcare providers be protected in the budget. Reinstate the 30% requirement for GSRP funding to go to CBOs as well as any appropriated funds for startup costs be accessible to private providers. Also, private providers should not solely be held responsible for pay parity without the state contributing to the increased administrative costs associated with it.  

The Grand Rapids Chamber and other childcare advocates have been educating lawmakers about the damage that will result from these changes in the budget.

 

Join the advocacy by signing onto this letter to lawmakers. Contact Marcus Keech, Director of Government Affairs at marcus@grandrapids.org to sign on.

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