The Complex Childcare Landscape: Public Policy Solutions for Utah

Overall, childcare is unaffordable for most families, and it is often more cost effective for a parent or guardian to drop out of the labor force or to choose work or a career that is not ideal. In many states, including Utah, the cost of infant care is more expensive than college tuition. Additionally, if a family wanted to find childcare, they might discover they live in a “childcare desert.” The U.S. Department of Health and Human Services states that childcare is unaffordable if it costs more than 7% of a family’s income. In the United States, couples are likely to spend 11% of their income on childcare, and single parents 36%. In most states, only a small share of families can afford center-based care. 

Utah’s business and political leaders are beginning to recognize that a key to our state’s continued economic success—and to addressing growing labor shortage concerns—is ensuring that people who need or want to work have the ability to do so. Yet, given the need for childcare addressed nationally and reported by the Utah Office of Child Care, the lack of state government investment is concerning. Childcare is a complex industry, therefore public policy attempts to address the need for more quality, affordable childcare are also complex. This white paper elucidates the complexity and, based on an extensive review of related public policy in all 50 states, provides policy mechanisms that other states have implemented to begin to supplement federal policy. 

The Challenges of Childcare as a Business 

Running a childcare business means navigating necessary regulations that pertain to the safety and care of young children, such as certifications, nutritional guidelines, square footage requirements, and zoning restrictions. In addition, providers develop learning curriculum, depend on qualified early educators, and ensure adequate child-to-teacher ratios. Whereas one teacher may be able to safely work with a group of older children, infants obviously require more one-on-one attention in order to ensure safe and quality care. This increases staffing costs for childcare business owners, which are then passed on to consumers through increased rates for families. In fact, providers may also decide that they cannot afford to offer infant care at all. If providers are committed to paying their staff a living wage—or a wage commensurate with their skills and education—they price out the customer base even further. These conditions result in less accessible infant care, less affordable childcare overall, and fewer choices for working parents. Settling for less expensive childcare can mean that care is unlicensed and unregulated, often leaving those earning lower incomes (especially those just above the subsidy cliff) with fewer safe options for their children. In many cases, parents have no choice but to utilize this care in order to remain employed. 

State Funding Investment and Other Policy Approaches 

All 50 states currently have an existing childcare program that is primarily funded using federal dollars through the Child Care and Development Block Grant (CCDBG), which is granted to state government agencies to facilitate statewide childcare services for lower income families. The U.S. Department of Education also dedicates federal funding to early learning services, most of which targets low-income families and programs for children with special needs. Forty-four states, including Utah and the District of Columbia, use state funding—and often federal funding—to provide various levels of preschool and pre-K programs. 

Most states have supplemented federal investments with state funds to expand or create additional childcare and pre-K opportunities; most finance preschool programs in public schools, with some funding for community-based childcare and early learning programs. In Utah, state funds are dedicated to creating a preschool program. 

State funding investments and other policies in this 50-state analysis generally aim to create, support, and/or expand a mixed-delivery system in which both the public education system and private childcare providers can better address the need for safe, quality, and affordable early care and education. These efforts or initiatives target the multiple populations impacted by childcare: consumers (families, parents, and guardians who need childcare), the childcare provider or industry (those who own and operate childcare businesses and the workforce that provides the care), and the businesses who depend on childcare availability and access to hire and retain employees. Other important elements include land use, zoning, and development policies. 

Recommendations for Utah 

Ideally, childcare would be a robust mixed-delivery system that prioritizes parent choice regarding whether to rely on care, then whether the type and setting of care best meets a family’s needs (e.g., schools, faith-based organizations, large centers, and family or home-based care). Considering the complexity of the childcare issue, along with the detailed analysis of policies implemented by other states, we propose the following recommendations for Utah: 

  1. Expand Support for Childcare Business Owners 
  2. Prepare an Educated Childcare Workforce 
  3. Help Childcare Consumers (Parent, Family, and Guardian) 
  4. Increase Support for Employers 
  5. Pass Land Use Policies

Conclusion 

Childcare is a vital part of our state’s social and economic infrastructure and is increasingly critical for working parents and municipalities. The COVID-19 pandemic has underscored that families and our economy depend on a strong, supported, and funded childcare sector. Strengthening this sector requires state-level policies that complement and expand federal funding and policy approaches, as well as innovative policies that continue to address the market failures of the childcare industry. The purpose of this report is to provide information, based on an extensive 50-state public policy analysis, that can help Utah decision makers better understand options as they craft Utah’s future.  

Currently, whether Utahns are supportive or not, it is important to note that overarching federal policies are being considered through the Build Back Better package. The childcare proposals include funding to ensure, at most, that no family is paying more than 7% of their income on childcare. In this package, the cost of childcare would be on a sliding scale, with the most low-income families paying nothing. The plan also includes investment in ensuring quality through appropriate curriculum, small class sizes, inclusivity, professional development, and paying childcare providers and staff a living wage with benefits.  

Utah policymakers are also beginning to examine and address the shortage of affordable childcare, including proposed legislation in the 2022 Utah Legislature’s General Session and beyond. Legislative and other policymaking attention is needed in Utah to address an issue that increasingly impacts the economic viability of families, childcare business owners and their workforce, and the broader business community and economy of our state. 

To learn more about the complex childcare landscape and public policy solutions for Utah, read the full white paper.

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