How Will Stimulus Dollars Change the Early Learning Landscape? Ideas Begin to Take Shape

July 22nd, 2021

At a Glance...

-The American Rescue Plan Act provides millions of dollars to states to use on early childhood education and services.
-As states begin designing their plans, a few common themes are emerging: supporting the workforce, building better infrastructure, and opening more access to services.
-Some states are taking creative approaches to community challenges, from home visiting services to sound fiscal planning.

The federal government has provided states with an unprecedented amount of money spread across three different stimulus packages: Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) in December 2020, and the American Rescue Plan Act (ARPA) in March 2021. The passage of each act gives stakeholders the opportunity to think strategically about investments in longer-term innovations and initiatives.

ARPA, the most recent package (and the one doling out the most amount of funds), provides multiple funding streams that can be used for a wide variety of purposes, especially in the early childhood space. There are funds specifically intended for early childhood, and other funding streams at the state and local level can be leveraged for early childhood education and the workforce. Some of the funds are listed here. (For more detail on how much Delaware is expected to receive for what purposes, visit our website.)

Explicit Early Childhood Stimulus Funds

Child care Stabilization Grant Fund
Child Care and Development Block Grant Fund
Individuals with Disabilities Education Act Fund
Community-Based Child Abuse Prevent Grant Fund
Head Start Fund

Additional Funds to Leverage for Early Childhood

State and Local Fiscal Recovery Fund
Coronavirus Capital Projects Fund
Elementary and Secondary School Emergency Relief Fund
State Small Business Credit Initiative Fund

Opportunities for Early Childhood Education

As states decide how to spend the tremendous amount of ARPA funds over the next three to five years, advocates are urging caution. One-time infusions provide relief for providers and the workforce and are essential to recovery, but are ultimately not sustainable solutions. Additional investments in early childhood are critical to sustain the field moving forward.

Advocates, providers, members of the early learning profession, and other stakeholders locally and nationwide have recommended areas for investment. Recently, the Delaware Early Childhood Council released a memo sent to Governor Carney that outlines recommendations for use of stimulus dollars to address the early childhood workforce crisis. Other critical issues emerging in Delaware include expanding services for young children with disabilities, incentivizing off-hours and infant care, and piloting a universal home visiting model.

Additionally, departments at the federal level have released guidance on how to spend ARPA funds for early childhood, while states have begun to release plans on utilizing ARPA funds for early learning. Emerging themes include:

Investment in the Workforce: professional advancement coaching and training, expansion of scholarships and financial support, investments in compensation and benefits, income supplements that explicitly support the child care workforce, and retention and recruitment bonuses.
Investment in Infrastructure: upgrades to facilities and safety measures, capacity-building investments in materials and technology, purchase of supplies to meet COVID-19 regulations, low-cost loans for renovations and construction, and technical assistance on navigating these processes.
Investment in Access and Services: prepare for a mixed-delivery system, expand capacity and access by investing in purchase of care (state subsidy for child care), pay by enrollment for subsidized care, and support wrap-around services, such as home visiting, developmental screenings, and transition services.

A Look at Other States

Direct Payments, Health Coverage, and Pay by Enrollment in New Mexico

New Mexico used a portion of its CARES Act dollars to offer incentive pay to early learning professionals who worked at locations that remained open during the pandemic.
The state also used a portion of its CARES stimulus funds to cover premiums for uninsured child care workers (and their household members) who tested positive for COVID-19 and provide health care coverage until they recovered.
New Mexico also used stimulus funds to provide child care subsidy payments to providers based on enrollment not attendance.

Compensation and Benefits for the Early Learning Workforce in Washington

Using a portion of its stimulus funds, Washington is providing increased compensation and health coverage for child care employees. About $36 million of the $360 million for child care grants in the state budget is dedicated to increased compensation, impacting an estimated 10,000 child care workers. The budget also includes $30 million for health coverage through the Health Benefit Exchange, enabling an estimated 15,000 child care workers to receive premium-free health coverage.

Increasing Capacity and Expanding Access in Louisiana

Louisiana has identified facilities as a crucial part to increasing supply and capacity. The state is considering dollars on top of ARPA stimulus funds, such as philanthropic funds to address this issue and sustain investments long after the stimulus dollars run out.
To expand access to child care, the state has committed to using a portion of their ARPA dollars to support the Louisiana Early Childhood Education Fund which provides matching state dollars for local investment.

Expanding Access and Stabilizing the Field with Investments in Scholarship Programs in Arkansas

Arkansas proposed using ARPA dollars to significantly increase funding for the state’s E.A.C.H. scholarship program, totaling over $40 million.
The state also plans to use stimulus funds to create more slots for child care to help meet high need and demand in areas with lowest capacity, regardless of setting.

Plans for Quality, Access, and the Workforce in Maine

In May, the Maine Department of Health and Human Services released a plan that showed the impact of COVID on the child care industry and detailed how the state plans to spend ARPA dollars on child care. The plan focuses on quality, access, and the workforce. One such workforce investment will provide stipends to child care providers specifically earmarked for wages, benefits, and/or bonuses.

Focus on Families, Access, Workforce Stability, and Wraparound Supports in Connecticut

Connecticut Governor Ned Lamont has released a plan detailing how the state plans to spend its ARPA dollars. Some investments in child care include: expansion and financial investments in home visiting, stability supports for providers, and expanding eligibility for Care4Kids, the state subsidy program for child care, allowing an additional 5,000 children to participate.
To help stabilize the workforce, Connecticut also requires 25 percent of total funding for providers through stabilization grants to go toward increased compensation for staff.

Waivers for Workers in Wisconsin

Direct payments from COVID relief funds could technically make some providers and workers ineligible for public benefits. But Wisconsin ensures that won’t happen, thanks to an income disregard of up to $10,000 for direct care workers.

Author:
Kelsey Mensch

KMensch@rodelde.org

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