Child Care After COVID

Well before the pandemic, the economics of child care were unmanageable for both families and providers. COVID-19 has only increased this pressure —costs have risen, programs have closed, and women have dropped out of the labor market at an astonishing rate—heightening awareness about how critical child care is to enabling families to work, to reopening the economy, and to broader community prosperity.

As stressful as the situation currently is, the good news is that broad-based policy change—nationally, in Maryland, and in Baltimore City—is underway. Decades of research demonstrate that children who attend high-quality early care and education programs arrive at school better ready to learn and that these benefits are especially large for low-income children. Since before the pandemic, support for publicly funded early childhood programs, including child care subsidies for working families and universal pre-kindergarten programs, has been growing.

The $1.9 trillion American Rescue Plan (ARP) includes $39 billion for child care nationwide. Maryland is expected to receive over $500 million from the ARP to stabilize the sector and support subsidies for families, on top of $45.8 million it received for child care from the Coronavirus Aid Relief and Economic Security (CARES) Act last summer and the $128.8 million it received from a follow-up COVID relief package that was passed in December 2020.

The bad news is that up until now, public investments in child care have not reached all the children and families who might benefit from them; are absent a strategic framework for reaching scale and providing high quality early learning and education for all children – not just those whose families can afford it; and, given state policy and program implementation, have had unintended consequences that perpetuate rather than ameliorate existing inequities.

In “Child Care After COVID: Equity, efficiency, and effectiveness in the financing and delivery of child care in Baltimore and Maryland,” public policy analyst Martha Holleman examines the availability, affordability, and costs of delivering regulated child care in Baltimore, takes a deep dive into the current implementation and funding of the Maryland Child Care Scholarship Program, discusses what the expansion of pre-kindergarten might mean for child care providers, and suggests immediate opportunities for action.

With increased recognition of the significance of child care brought on by COVID-19 and substantial new state and federal investments in early care and education that are on the way, Maryland can:

• Develop a data-driven, equity-focused process for setting child care subsidy rates that identifies the real cost of care, pursues policy goals like program quality and teacher compensation, and evens out differences across regions.
• Make permanent changes to the Maryland Child Care Scholarship — Maryland’s child care subsidy program — to reimburse providers based on enrollment and eliminate co-pays for families with incomes below the state median.
• Streamline the application process and improve customer service for the Child Care Scholarship and related benefits for families.
• Invest new federal funding from the American Rescue Plan in strategies to strengthen child care businesses.
• Expand the use of direct grants to fill critical gaps in care, especially for infants and toddlers and in areas of concentrated poverty.
• Support comprehensive, integrated planning alongside the expansion of pre-K and maximize new resources so that all young children have access to high quality early care and education.