Why the C3 grants are so important for children

Originally Appeared in Commonwealth Magazine
By Lauren Birchfield Kennedy and Ashley White

March 20, 2023

IF YOU HAVE young children, or know anyone who does, chances are you’ve noticed that the Commonwealth’s child care sector is in a major state of crisis. Classrooms are closing, waitlists are growing, tuition costs are soaring, and educators are leaving the field in droves for higher paying jobs; moreover, these persisting challenges continue to push mothers out of the workforce.

Thankfully, help may be on the way. Gov. Maura Healey’s fiscal year  2024 budget makes key investments to address this heightened crisis – and to pave the way for a healthier, more stable early education and care system for families across the Commonwealth. One is of particular importance: dedicating $475 million for foundational operating grants for child care providers for the entire fiscal year. The budget process now moves to the Legislature and it is critical that investments in the program remain.

While how a government approaches financing social sectors doesn’t typically make headlines, the importance of these grants cannot be overstated. Introduced by the Massachusetts Department of Early Education and Care as an innovative mechanism for distributing American Rescue Plan Act  funding to the sector during the COVID-19 pandemic, these grants, which have a 90 percent take-up rate across all licensed early education and care providers in Massachusetts, have had a foundational impact. Within months of being launched, these grants, which are distributed through the Commonwealth Cares for Children (C3) Stabilization Grant Program, stabilized the sector’s capacity, prevented program closures, and enabled investments in quality and educator pay.

While direct-to-provider operations grants were designed for stabilization, they have proved to be essential to the field’s shorter and longer-term viability. Data released by the Department of Early Education and Care demonstrates that direct-to-provider operations grants continue to be a critical resource for stabilizing the early education and care sector and preventing program closures. Indeed, if operations grants are not continued, more than 12 percent (751) of all early education and care providers in the Commonwealth report that they would have to close, 65 percent of which participate in the state’s child care subsidy program, which serves Massachusetts’ lowest-income families.

Operations grants have played a critical role in preserving equitable access to care for communities most in need and, as highlighted in a recent report from the Massachusetts Taxpayers Foundation, are an effective complement to the much-needed investments in the child care subsidy system also included in the governor’s budget. Equity adjustments built into the operations grants funding formula have ensured that providers serving children with child care subsidies have received 64 percent of all C3 grant funds, promoting equity in access and quality of care. Notably, data suggest that programs most vulnerable to closure are located in more socially vulnerable communities – highlighting the important role that operations grants play in equitable access to care, especially for those who need it most.

Of critical importance is that foundational operations grants have also enabled providers to invest in compensation for their staff, a badly needed intervention in a field that is rapidly losing educators. Nearly one third of educator positions have turned over in the past year, with the majority departing the sector entirely. Child care centers have an average of more than three unfilled positions, leading many providers to keep classrooms closed due to staffing shortages. The result: even if you can afford child care, you can’t find it.

Finally, with respect to affordability, operations grants have played an important role in helping to keep already sky-high tuition prices stable for families. Families in the Commonwealth pay on average $23,000 annually for private infant care; for some, that’s more than 50 percent of their household income, making Massachusetts one of the least affordable states for child care. With the help of operations grants, more than 25 percent of providers were able to defer planned tuition increases. Notably, 1 in 8 providers report that, if the operations grant program is continued at comparable funding levels, they would consider reducing tuition, making it more affordable for families.

Over the last year and a half, the operations grant program has supported more than 7,100 early education and care programs across the Commonwealth, from child care centers to Family Child Care providers to afterschool and out-of-school time programs. They have proven to be a win for everyone: children, families, educators, and the economy. Robust funding in operation grants in FY24 stands as one of the most prudent investments we can make, not only to strengthen the Commonwealth’s child care sector but also to optimize Massachusetts’ economy: currently, our flailing early education and care system costs the state roughly $2.7 billion a year in lost employee wages, lower productivity, and reduced tax revenues.

Child care was prominently featured in the inaugural speeches of each member of the “Big Three” on Beacon Hill—Governor Maura Healey, Senate President Karen Spilka, and House Speaker Ron Mariano. Most importantly, it’s a priority for families and the providers that care for them. The continuation of operations grants is an essential step towards sustaining and growing our child care system, so that it works for everyone.

Lauren Kennedy is co-president of Neighborhood Villages, which advocates for early education care and policy reform, and Ashley White is senior policy research at the Massachusetts Taxpayers Foundation.