Minnesota must stop stiffing child care providers

Every child deserves access to early care and education, no matter their skin color or how much money their family has. And every child care provider deserves to make a decent living.

Yet even though Minnesota is blessed with abundant resources, those who would protect the interests of the wealthy few continue to sell the vast majority of us short. Anyone with young children can tell you how hard it is to find affordable, quality child care. At the same time, caregivers and early childhood educators struggle to make ends meet, with more than 20% living in poverty, according to the Economic Policy Institute.

Perhaps the biggest missing piece is public funding. Right now low child care assistance reimbursement rates make it difficult for providers — whether in-home family child care providers or larger child care centers — to serve many families, keeping children from care and parents out of the workforce. Minnesota’s child care reimbursement rates were cut in 2003 and have never recovered. Currently, the state reimburses providers at just the 25th percentile of market rates, meaning child care providers who serve families on assistance must do so at a significant loss. On this front, Minnesota is embarrassingly behind most of the rest of the country. Our neighboring states like North Dakota and South Dakota understand the importance of affordable child care and pay the federally recommended 75th percentile. Alabama and Mississippi do, too. South Carolina pays up to the 90th.

Right now, our Legislature is debating whether to raise child care reimbursement rates to just the 40th percentile. This is the DFL-House led position, supported by Gov. Tim Walz. It would cost the state nothing in the next four years because it would use federal funds provided under the American Rescue Plan. Yet the GOP-led Minnesota Senate is resisting even this modest step in the right direction.

The Senate GOP cites projected increased state costs of $70 million, which don’t occur until 2026-27 — beyond the next four years the Legislature is responsible to budget for. At the same time, the Senate has joined the House and Walz administration to invest another $250 million in 2026-27 spending for other areas. If the Senate GOP can agree to spending for services needed by seniors and people with disabilities, a commendable cause to be sure, it should not claim a principled objection to spending in those years for Minnesota families with young children. The Senate’s argument simply holds no water.

Minnesota’s chronically low child care reimbursement rates are a key example of systemic racism in action. Too many Minnesota children, especially those who are Black, Indigenous or people of color are not given the opportunities they need. We cannot continue to pat ourselves on the back for all of Minnesota’s high quality-of-life indicators while we continue to drive disparities by underfunding our future.

Further, as a recent front-page Star Tribune article about the frenzied market for million-dollar lake homes indicates, we live in a state of vast abundance. We more than have enough to take care of all who need a hand. And Minnesota’s children, families and child care providers definitely need a hand.

Raising child care reimbursement rates is not only the right thing to do, it’s the smart thing to do. When businesses are struggling to hire new workers, raising rates will help get more families back to work and support Minnesota child care providers. This will help more families to support our state’s economy, which benefits everyone. It’s beyond time to get this done.

Lars Negstad is the policy director for ISAIAH, an organization that seeks racial and economic equity in Minnesota.

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