A new pilot program in Missouri seeks to make it easier for parents to afford childcare—by getting not only the state but employers to help pay for it.
Child Care Works, which launched in November, is a new cost-sharing model enabled by a $2.5 million allocation in the state’s current fiscal year budget. Backers hope that will subsidize up to 450 seats in early childcare centers across Missouri, with a focus on helping families that don’t qualify for federal subsidies, but still struggle to pay their own way.
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Brian Schmidt is the executive director of the nonprofit Kids Win Missouri, which the state of Missouri contracted to set up and administer the program. As of late December, they’d seen 287 seats awarded, with participation in 19 communities across the state and more in the works. “We had a lot of demand, more demand for the program than we have funds,” he says.
The program builds on the expanded federal tax credits for employers that just became available on Jan. 1. Employers who are willing to help subsidize early childcare for eligible staffers can get onboarding help for those federal credits from Kids Win Missouri. But, crucially, some will also be able to avail themselves of state support, which Kids Win Missouri also assists with. That adds up to an attractive subsidy, one that can be distributed to the childcare provider of each individual employee’s choice, provided they are licensed by the state and willing to sign up. (Summer camps and before and aftercare programs are also eligible.)
Says Schmidt, “Child Care Works takes the administrative hassle off of it. We will go and get agreements and get providers onboarded into the system. Our goal is to get as many providers as possible who want to participate.”
Beyond helping the families they serve, there’s a real benefit to providers: Once their clients are enrolled, Child Care Works should be a reliable source of funding in an industry where payments can be frustratingly irregular.
Tami Timmer is the executive director of Flance Early Learning Center in North St. Louis, which eagerly signed on to the program in its first months. But Flance is not just participating from the provider side; it’s also signed up as an employer, helping two employees obtain the subsidies for their own children. Participating families’ household incomes must be less than 555 percent of the federal poverty level, or $176,825 for a family of four.
“Sadly, because we are a nonprofit, and we are in the early learning environment, while we believe we do pay higher wages than most and we have good benefits, the reality is too many of our team members still qualify for the subsidy,” Timmer says.
Timmer acknowledges that not every employer will want to deal with setting up a new program, much less offering subsidies to employees. “There’s no question that an employer can say, ‘Wait, so you’re going to make us do all this work, and you’re going to ask us to pay $375 to $400 a month for the privilege of doing this?’ It is going to take some special employers to understand. I guess it depends how much they value their team members.”
Abe Funk, the owner of John’s Pharmacy in Cape Girardeau, is an employer who sees that value, although that’s probably not news to his employees. Funk was so concerned by how the lack of affordable childcare was hurting his employees that he ended up setting up an early childcare center specifically for John’s Pharmacy employees. “We just got tired of losing good employees,” he says. The facility now has seats for 18 children and has had no trouble filling them.
Funk says he had no hesitation about signing for Child Care Works, and while the program is still incredibly new (the first payments went out this month), he’s hopeful. “We’ve become, in many ways, a daycare guinea pig,” he says. “And so as soon as this was announced, we said, ‘Sign us up.’ We’re really excited that it will help us as a business, because right now, we’re paying a lot of money just to keep it afloat. But it also helps some of the moms, because they’ll have a lower cost share than what they currently do.”
Schmidt, with Kids Win Missouri, says he’s hopeful the state will expand the program if it can show success this year (despite tight budgets, Gov. Mike Kehoe’s budget for the fiscal year beginning July 1 includes another $2.5 million to keep the program going). “We’re kind of at a proof of concept stage,” he says. He’s hopeful that the increased federal tax credit will drive even more employers to get on board, which could drive more interest on a state level.
What no one questions is the immense need for more affordable early childcare options. Timmer says she regularly hears from families that can’t afford Flance, even with the subsidies on offer (Flance maintains a mix of 70 percent low-income families using federal subsidies and 30 percent paying out of pocket to cover tuition that can reach up to $20,000 a year). Helping 450 children is a drop in the bucket compared to the need across the state, she says.
But, she adds, that shouldn’t hold Missouri back from trying to address it—and, she hopes, doing more as it becomes possible.
“It’s only $2.5 million,” she concedes. “But is it a start to a creative solution to help middle income families? To that, I have to say unequivocally, ‘Yes, it is.’ It’s a start.”
