An Underused Path for Rescuing Early Care Providers

This is our latest post in “The Looming Financial Crisis?” series. Read the rest here.

Even in the best of times, the community-based organizations, nonprofits, and schools that run early childhood programs in this country operate on extremely thin margins.

Because of COVID-19, they’re in crisis. Many are waiting desperately for families willing to sign up for in-person care or for the federal government to pass another stimulus bill. In a July survey, 40 percent of current early childhood providers said that without additional public assistance, they would close permanently. In that scenario, thousands of early educators would lose their primary source of income. The resulting loss would also have dire implications for parents and caregivers trying to go back to work — and for the economy. 

Outside of direct financial assistance, there’s another — and largely unexplored — route to help shore up the finances of existing early childhood providers and support the creation of new providers: state legislators should create flexibility from regulations that govern the facilities where early childhood operators can work.

Right now, for example, early childhood providers spend valuable money and limited staff time thinking about things like building individual “cubbies” within classrooms with individual hooks and ensuring an “adequate supply of blocks in varied sizes” that is “organized and labeled.” Facilities regulations can also prevent potential providers from ever opening. For example, in order to serve preschoolers, charter schools often must retrofit their existing classrooms to meet early childhood regulations, which can be a prohibitively expensive endeavor. 

There is no argument that children need safety, and that operators need to be compelled — through a combination of oversight, law, and agency guidance — to make the safest spaces for kids to play and learn. But states across the country have taken things a step too far, adding burdensome hoops that don’t actually do anything to ensure quality, safety, or rigor.

Loosening these regulations would ease the financial pressure on existing providers, allowing them to spend funds elsewhere, like on public health measures, staff salaries, or rent. Depending on the regulation, providers may even be able to reconfigure their existing space to enroll more students while still meeting COVID health and safety standards. And in the best case scenario, providers that have not previously offered child care due to facilities restrictions could begin to do so. 

A few states have begun exploring such exemptions. California, for example, issued an emergency waiver in March that creates flexibility for early childhood providers. This waiver allows existing early childhood providers to extend their capacity, and allows employers to open and temporarily operate new early childhood programs, called “pop-up centers.”

California should consider ways to extend the impact of this waiver. For example, the state must push for more uptake among new providers. More than 80 percent of waivers have been granted to existing providers. Prospective provider types other than employers should be eligible for waivers. Both of these efforts would increase the number of early childhood providers, and the number of seats for students, across the state. 

Without early childhood providers, parents and caregivers don’t work and the economy will continue to flag. States can take matters into their own hands right away, following California’s lead or exploring other ways of creating regulatory flexibility. In doing so, they can stop current early childhood providers from closing and support prospective providers in opening — and ensure that more parents can get back to work.

This is our latest post in “The Looming Financial Crisis?” series. Read the rest here.