Webinar on State and Federal Child Care Funding: What You Need to Know and How to Act!

Because they are built on an existing program, the Child Care Development Block Grant funds will be similar to the previous federal stimulus child care investments, meaning that states do not have to meet minimum direct service or quality spending targets and can fund child care for essential workers regardless of their income level and include child care providers who have not previously participated in the subsidy program.

The Child Care Stabilization Grant is a new program, designed to send funds to providers in the form of grants. The design of the program is still to be determined, but it is focused on losses and costs incurred by child care providers after the declaration of the public health emergency on January 31, 2020. These funds could be used to support all licensed, regulated or registered providers under state law, not just child care providers who accept child care subsidy. These funds could potentially cover personnel costs, rent or mortgage payments, COVID-related costs such as personal protective equipment or cleaning supplies, or mental health supports for children and child care employees.

Potential guidance from the federal government on how the CCDBG funds can be used is not yet available. However, in previous federal child care relief packages, states have a substantial amount of flexibility to determine how funds are spent. Examples of policy changes paid for through previous federal child care stimulus include:

• Paying providers based on enrollment rather than attendance;
• Creating incentive payments to boost compensation for provider staff;
• Expanding eligibility for state-subsidized child care;
• Establishing higher reimbursement rates for subsidy providers that have reopened;
• Covering costs of PPE, cleaning/sanitizing materials, etc.;
• Increasing the availability of scholarships for providers; 
• Waiving co-pays and parent fees; and
• Paying for direct grants to providers to fund COVID-related operating costs.

Importantly, these funds must all be used to supplement, not replace, other federal, state and local child care funds.

The New Jersey Department of Human Services has made information available on its website https://www.childcarenj.gov/covid19, but direct communication is also made with providers through the workforce registry, NJCCIS. The local resource and referral agencies are also distributing information. The Department of Human Services plans to provide technical assistance, as it has in prior federal relief efforts.

Most existing federal rules around Child Care Development Block Grant funding still apply to those funds, which means that these funds cannot be used for major facility renovations or redesign. However, a state may allow some of the funds to be used for small renovations such as emergency exits or handwashing stations to meet health and safety standards or state quality standards.

However, funds in the Child Care Stabilization Fund can only be used for operating expenses, not facilities. “Facility maintenance” is included as a category of allowable expenses, but these likely do not include capital improvements. (For a full list of allowable expenses in the legislation, see the statutory text here.)

It depends. The state will determine the size and length of each subgrant, but it will be based on current operating expenses, including salaries and benefit, rent/mortgage costs, etc.

It’s not yet known exactly when funding or grant applications will be available. However, the goal of the legislation is to support providers as soon as possible.

Note, however, that the legislation anticipates getting the grants expended by September 30, 2021.

Absent finalized federal guidance, it is hard to say for certain. But to be eligible for the child care stabilization grant, the child care provider must either 1) be an eligible child care provider in the Child Care and Development Block Grant, or 2) be licensed, regulated, or registered in New Jersey, meeting applicable state and local health and safety requirements. The Department of Human Services may be able to make a final determination of which providers will be eligible within these federal requirements.

The unfortunate answer is “it depends.”

New Jersey school districts may contract with child care providers for pre-K services, and have been required to continue paying those contracts based on enrollment during the pandemic. However, these programs may be incurring other expenses and costs associated with the pandemic that may make them eligible for stabilization funds.  They may also be eligible for grants through CCDBG to pay for PPE and other health and safety materials, or to otherwise improve quality through professional learning opportunities or purchasing new materials and resources.  Whether these are available will depend on policy choices at NJDHS.

Contracted providers should also be eligible for support through the $2.7 billion in Pre-K-12 school funding in the American Rescue Plan, which covers costs of reopening, staff costs, extended learning opportunities and mental health support. (More information on the school grant program from the US Department of Education here.)

The law actually requires that states set aside funding to provide technical assistance to child care providers to help them apply for subgrants, as well as publicize the availability of subgrants. This is a critical component, because so many child care providers are often small businesses or agencies unfamiliar with the process of applying for federal grants and the paperwork that goes with it. 

As mentioned above, information and technical assistance will be coordinated through the Department of Human Services through the workforce registry, through direct outreach to child care providers, and through the child care resource and referral agencies.

• Link to PowerPoint Presentation
• ZERO TO THREE: American Rescue Plan Addresses 5 Critical Needs for Babies
• The Center for Law and Social Policy (CLASP): Opportunities to Advocate for Equitable Child Care Policies through the State CCDF Planning Process
• National Association for the Education of Young Children (NAEYC) Pandemic Surveys
• Bipartisan Policy Center State by State Use of CARES Act Supplemental CCDBG Funds
• CLASP: How States Can Spend $10 Billion for Child Care Well, Wisely & With Urgency
• Activating Better Child Care Through Stimulus Funding
• Buffet Early Childhood Institute at the University of Nebraska Publication
• Buffet Early Childhood Institute at the University of Nebraska: Nebraska's Public Investment in Early Childhood Care and Education FY2017
• New Jersey Legislature: New Jersey's Budget
• New Jersey Department of Human Services: Child Care and COVID-19
• New Jersey Child Care Information System
• H.R.7201 - Child Care is Infrastructure Act
• Payment Protection Program Application for Family Child Care
• Early Care and Education Providers: Taking Advantage of the New Small Business Administration Loan and Grant Programs
• List of NJ Budget Committee Members
• Supporting the Child Care and Early Education Workforce
• List of New Jersey Child Care Resource and Referral Agency (CCR&R)