Montana is set to approve a $42 million boon to the childcare sector. But a deficit looms large

A state panel recommended spending federal COVID aid designed to boost capacity in childcare deserts

By: - August 31, 2021 5:00 pm

Adam Meier, Gov. Greg Gianforte’s nominee tp head up the Department of Public Health and Human Services, testified before a Senate panel on February 10. (MPAN)

Montana’s financially struggling childcare sector is set to get more than a $40 million boost, thanks to federal COVID-19 relief funds that a state panel provisionally authorized last week.

State officials said the funds, made available by the feds through the existing Child Care and Development Block Grant, are a crucial tool to support Montana’s economic recovery, its children and working parents and the livelihoods of its childcare workers, who face low pay, difficult work and long hours.

“I get calls two times a week just saying I can’t do this, I’m not gonna make ends meet,” Tori Sproles with Childcare Connections, a child care resource and referral agency, told the state ARPA Health Advisory Commission last week. It’s one of several committees formed to guide the state’s allocation of funds from the American Rescue Plan Act, a federal pandemic aid package passed by Congress. 

The state Department of Public Health and Human Services brought to the committee several proposals for spending portions of that money, primarily in two chunks: $10 million for specialized training and workforce development and $15 million to fund “innovative community and business concepts to create, expand, or advance child care availability.” There’s also $7 million for stipends for teachers working in childcare settings — a maximum of $2,000 for around 3,600 staffers — and $5.5 million to provide childcare assistance to health care sector workers with a priority “to working parents who make between 185% and 250% of the Federal Poverty Level.”

Advocates and lawmakers lauded the recommendations, which passed mostly without dissent in a commission meeting Aug. 25, a step in the right direction for addressing a deficiency in the workforce, both in and out of the childcare sectors. But Sprole told the commission, which comprises both lawmakers and executive officials, that the deficit will be difficult to address.

“The $1,000 to $2,000 stipends is not a sustainable solution to the childcare workforce issue,” she said. “The average Montana childcare worker is making about $11 per hour. Even with these proposed stipends, childcare business owners will still be unable to compete with local entry-level employers.”

The aid the state is proposing — the second tranche of childcare funds allocated under ARPA — comes as a thorny web of childcare-related problems worsens under the weight of a deadly pandemic and economic downturn. There was a 43 percent drop in the number of providers in April of last year in response to the pandemic, and capacity hasn’t fully recovered, according to a report from the state Department of Labor and Industry. This means financial hardship for workers, as well as a difficult situation for parents of young children struggling to find affordable childcare, a likely impediment to their own financial or professional advancement. The state, meanwhile, has ended pandemic-related enhanced unemployment assistance programs.

Montana families pay about $7,900 a year for childcare on average, DLI said, 16 percent of the state’s average wage in 2020. The federal government says a family shouldn’t have to pay more than 7 percent of their income for childcare, meaning that 88% of Montana families would be burdened by childcare costs under that definition.

DLI further reported that six percent of the Montana workforce relies on early childcare to remain employed, or around 32,000 people. And on the flip side, the capacity of licensed childcare workers only meets 44% of the estimated demand, a problem that’s especially severe in rural counties in eastern Montana and on the Hi Line.

“The current childcare supply falls significantly short of the estimated demand,” said Xanna Burg, a coordinator with Kids Count, an affiliate of the Montana Budget and Policy Center. “For building capacity we’re taking about nearly doubling the current supply and then maintaining that capacity.” 

The proposed programs plan to address that in a variety of ways. Under the infrastructure and innovation solution grants, for example, the state will issue requests for proposals for projects that improve childcare affordability, increased access for underserved communities and so on.

The full amount of ARPA money is critical to building capacity and maintaining childcare businesses,” Burg said. “Our economic recovery depends on having more childcare slots now and into the future.”

Bruce Tribbensee, co-founder of Missoula tech company Submittable, told the commission that childcare was one of the most significant obstacles his firm faced in recruiting and retention.

“Early on as parents and employers, my cofounders and I felt the childcare crisis firsthand,” he said. “We were challenged to find employees in Montana, and our employees were working hard to balance their childcare responsibilities and job responsibilities.”

Submittable created an on-site childcare center with eight infant slots, he said, and found it to be “a valuable recruiting and retention tool.

The business model of childcare in Montana is broken,” he said. “We should find ways to fix the problem and not just short-term solutions. Implementing these recommendations will make an impact by working to shore up the foundation of the childcare industry.”

The commission also approved recommendations from DPPHS — pending approval from Gov. Greg Gianforte — to provide one-time payments of $500 to $1,500 to individuals in SNAP households with minor children, provided they report 12 consecutive weeks of new employment of at least 20 hours a week following Sept. 1, or they report an increase of employment by at least 10 hours a week. It’s similar to a workforce re-entry program the state adopted after Gianforte ended expanded pandemic unemployment assistance, though the benefits have been slow to trickle out.

Democrats on the commission attacked the benefits as an overly means-tested sum that would require needy families to wait an unreasonable amount of time to receive benefits.

“The Gianforte Administration is doubling down on a failed policy that ignores the real barriers keeping Montanans out of the workforce,” said a statement from Democratic commissioners Sen. Mary McNally  and Rep. Mary Caferro. “Instead of getting money out the door now to support working families as they search for good-paying jobs, affordable child care, and housing, they are wasting time and taxpayer money on a concept we know doesn’t work.

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Arren Kimbel-Sannit
Arren Kimbel-Sannit

Arren Kimbel-Sannit is an Arizona-bred journalist who has covered politics, policy and power building at every level of government. Before getting his dose of northern exposure, Arren worked as a reporter in all manner of Arizona newsrooms, for the Dallas Morning News and for POLITICO in Washington, D.C. He has a special interest in how land-use decisions affect working-class people, which he displayed through reporting on the epidemic of pedestrian deaths in the U.S. for the Los Angeles Times and PBS Newshour. He's also covered housing, agriculture, the Trump presidency and more.