Federal grant money designed to help child care facilities weather the pandemic’s upheaval was a lifeline for Ellen Dietrick, who runs a child care center in Needham, where high housing costs made it difficult to attract and retain staffers. But now, she and similar child care providers, which care only for children whose parents can pay out of pocket, could be cut out of a state program designed to take over when the federal grants disappear.
While shoring up centers that serve low-income families is considered the most urgent mission, some advocates worry that leaving these other providers to fend for themselves could put the cost of care even further out of reach for everyone.
“To think of the grant ending . . . I can’t even fathom the destruction that would cause,” Dietrick said.
The conversation about who should continue to receive funding has created tension on Beacon Hill, as top policymakers grapple with how to solve a crisis that has put Massachusetts on the map for having some of the most expensive child care in the country.
To qualify for a subsidy, a family must make no more than 50 percent of the state’s median income. In 2023, for example, a family of four’s annual household income would have to be $67,968 or less.
The annual cost of infant center-based child care in Middlesex and Norfolk counties was more than $26,000, according to the data from the Department of Labor.
In speeches and in proposed legislation, state leaders have publicly committed to continuing the Commonwealth Cares for Children funding, known among providers as “C3″ grants, which budget watchers estimate will cost between $400 million and $500 million a year. But legislation put forward by the House and Senate would leave providers that depend on private tuition, like Dietrick’s program, with nothing to replace the dried-up federal funding on which they’ve come to rely.
Governor Maura Healey’s budget language, on the other hand, would fund grants for all providers, including those who enroll only families paying full tuition, though she proposes that the state’s current grant formula would continue to prioritize those who serve the state’s neediest.
“If that funding was limited to only subsidized providers, we would see a significant increase in cost for families, paired with a number of child care closures around the state,” a spokesperson for the governor said in a statement.
The C3 grant program at the center of the debate was created though the federal American Rescue Act, which Congress included in a bid to stabilize the child care sector during the pandemic. It was designed for all providers — both subsidized and private pay — and allowed states to come up with their own formulas for how to disburse the money.
In Massachusetts, the formula took into account staffing levels, community demographics, and an equity adjustment that made sure the majority of the funding was going toward providers who served lower-income families. While other states gave out rounds of grants in a more patchwork approach, experts considered Massachusetts’ approach to be relatively thoughtful.
The payments were monthly and based on fixed costs, which gave providers predictability.
To date, the state has distributed more than $600 million to approximately 6,800 programs, according to state officials.
The governor’s budget proposes the state step in to fund the program in full, by providing a total of $475 million in grants, funded in part by new revenue created by the so-called millionaire’s tax.
A pair of separate spending bills from the Legislature also propose $68 million to fund grants for providers through the end of the current school year.
Those who support the House’s and Senate’s early education legislation say while the entire industry needs the support, the state should prioritize the most vulnerable.
Providers serving children who receive state subsidies have received 64 percent of all C3 grant funds. Without C3 grants, two in three of all providers would be forced to increase the cost for families, and half would be forced to cut the salaries of educators and staff, according to a recent survey by the state’s Department of Early Education and Care.
Lauren Cook is among them. Ellis Early Learning, where Cook serves as executive director, cares for 250 children across three Boston centers; 65 percent of those children receive government subsidies. Before the pandemic grants, she felt like she operated in “scarcity mode.”
With the grants, she and thousands of other providers across the state were able to increase teacher salaries, give out bonuses, and spend money on improvements — in Cook’s case, patching a leaky roof.
Now at Ellis, she said, it no longer “feels like we live paycheck to paycheck.” While she believes the whole industry needs to band together to fight for more funding and a more equitable system, the state “should prioritize subsidy providers first.”
“We’re losing money off of every child,” said Cook, who took to Beacon Hill alongside other providers and advocates to lobby the Legislature this week. “And that’s really hard.”
Celine Reyes, who runs a family child care center in Lawrence, said the grants allowed providers like her to keep their doors open and serve low-income families in Gateway Cities that would otherwise not have access to care.
“I’m dedicated to the work, and I’ve built relationships in my community,” Reyes said in Spanish at the State House lobbying event. “These grants must be made permanent.”
State Senator Jason M. Lewis, a Winchester Democrat, is an architect of child care legislation that would, among other things, provide grants similar to C3, creating a permanent funding stream for providers. However unlike the previous C3 grants, his legislation would award grants only to programs that commit to accepting the state’s neediest children.
Lewis acknowledged the need across the sector and noted his bill would make other changes to an industry some call a “crisis in progress.” The legislation and its House companion, has been co-signed by dozens of lawmakers, and generally has the support of the House speaker, Senate president, and governor, who all vowed this year to prioritize early education.
While the legislation won’t make everyone happy, he said, it does include pieces that will benefit all children and child care workers in the long term.
“We have to be fiscally responsible with our public dollars, and we know there is a limit to the amount of funding the state will be able to provide,” Lewis said. “We want to make sure that those dollars, as much as possible, would go to support a sector that is serving the needs of all children, including those who are low income and vulnerable.”
But without state help, some private providers are facing a future that they say sets them back to a pre-pandemic state of crisis. Dietrick’s program in Needham, for example, would have to reconsider the teacher raises and other improvements they were able to implement using the state and federal money.
Providers who accept subsidy children have access to other funding streams from the state, while private-pay providers like Dietrick depend mostly on donations and tuition. The state’s subsidy reimbursement levels are also too low to make it financially feasible to accept those students, some providers say.
Melissa Hresko, a teacher and director of a small center in Watertown, said the $2,800 in monthly grant funding during the pandemic has allowed the facility to serve its roughly 18 students.
Russell Cooperative School does not have the staff to provide all-day care, and therefore can’t be part of the state’s subsidy program. It supplements tuition with fund-raising events like puppet shows and craft fairs, and parents sometimes donate needed items like refrigerators and vacuums. When staffing levels are low, parents step up to volunteer their time.
“For smaller places like us who don’t fit that full-time, all-day care model . . . we are unable to access any of that [state help],” Hresko said. “That’s why the C3 grant has been a literal lifesaver for our program . . . we often fall through the cracks.”