by Maria Polletta, Arizona Center for Investigative Reporting
June 26, 2024
Arizona lawmakers gave the state’s child care system a temporary lifeline this month when they patched up a large part of the multimillion-dollar budget hole left by expiring federal pandemic funds.
But the money isn’t enough to guarantee the state will avoid the return of a waitlist for families seeking child care assistance, meaning Arizona could give up ground it took nearly a decade to gain.
The Department of Economic Security last implemented a waitlist for child care aid—available to working low-income parents, teen parents in school and parents living in shelters, among others—during the Great Recession, after lawmakers slashed state subsidy dollars to help balance the budget. Leaders later eliminated the state’s contribution to child care assistance entirely, leaving families to languish on the waitlist until 2019.
Long after Arizona was back in the black, lawmakers continued relying on federal money to prop up the child care system, aided by a $1.3 billion infusion of emergency pandemic cash. With the last of those recovery funds disappearing this year, the state needed to find an alternative to prevent what early childhood advocates warned would be an “immediate crisis.”
Legislators cobbled together much of what was needed during eleventh-hour budget negotiations—but not all of it.
DES indicated it was still analyzing the potential impact of the shortfall in response to repeated inquiries from AZCIR. In May, before lawmakers finalized a spending plan, the agency had said it anticipated reinstating a child care waitlist “in the absence of further investment” from the state.
Industry experts, for their part, believe some families not already approved for state assistance could be locked out of the subsidy program in a matter of months.
“I don’t even want to call it a waitlist, because nobody’s going to get in until we fund it,” said Barbie Prinster, program manager for the Arizona Early Childhood Education Association. “It’s a denial list.”
Inconsistent access to stable, affordable child care has far-reaching economic consequences for the state at large, as parents who would otherwise be working or in school turn down promotions, cut back their hours or quit. Yet it’s the impact on individual families that is most devastating, according to Bill Berk, CEO of Small Miracles Education, which operates preschool and child care centers in Maricopa and Pima counties.
“Last time we saw the denial list go into effect, we actually had families calling DCS (the Arizona Department of Child Safety) on themselves so that they could get in the child care door. That was a backdoor to get child care subsidies,” Berk said. “No family should be forced to make a decision like that.”
Though the emergency child care funding Arizona received during the pandemic prevented a system-wide collapse, it wasn’t enough to reverse the decade of neglect the sector had endured at state leaders’ hands, AZCIR previously found.
By the time the pandemic hit, Arizona had already lost more than a fifth of its child care providers as they struggled to stay open amid low state reimbursement rates that had barely budged in 19 years. Constant turnover among child care workers, almost 20% of whom lived in poverty, only added to the instability.
Nearly half of Arizonans lived in a so-called child care desert, meaning there were more than three children for every available spot, and those who didn’t often couldn’t comfortably afford care. Only the state’s wealthiest families could weather climbing child care costs and declining state support.
This year’s state budget allocates $12 million in General Fund dollars to child care while leaning on federal sources for another $131 million. The money will likely allow Arizona to avoid reversing reimbursement rate increases implemented during the pandemic, as well as an immediate loss of child care assistance to enrolled families once federal relief funding runs out.
But at least one early childhood education advocate deemed the stopgap funding the “bare minimum.” Rather than using the reprieve granted by emergency pandemic dollars to secure a more stable future for Arizona’s child care system, lawmakers funneled state surpluses toward Republican priorities like tax cuts and universal school vouchers.
“We’re still in the same situation where we’re really expecting parents to cover the cost of quality, and we’re also subsidizing the cost of quality on low wages for the child care workforce,” said Eric Bucher, an early childhood policy expert who led the Arizona Association for the Education of Young Children.
High-quality child care is increasingly expensive to provide, and with strict health and safety requirements, cutting corners isn’t an option. According to the most recent data available from Child Care Aware of America, the average cost of child care in Arizona ranged from $8,840 to $14,040 for infants and $7,800 to $12,662 for toddlers.
Child care workers, meanwhile, earn about $37,000 a year on average here, contributing to a workforce shortage that has, in turn, made available spots scarce for private-pay and state-subsidized clients alike. Reinstating a waitlist for state aid will make it even harder for families in need to access care, while putting additional financial pressure on child care providers who primarily serve DES families.
“It’s just a really unsustainable type of child care system,” Bucher said.
This year’s $12 million investment from the state fell far short of the $100 million in General Fund dollars proposed by Arizona Gov. Katie Hobbs and backed by advocates and families.
Republican House Speaker Ben Toma cited the $1 billion-plus deficit the state faced this year, noting that “finding money for new spending means cutting even deeper elsewhere.”
Still, the new budget marks the first time a Republican-led Legislature has agreed to spend General Fund money on child care in almost 15 years.
The shift may be due to increased pressure from groups like the Arizona Chamber of Commerce and Industry, a conservative-leaning organization that represents thousands of Arizona businesses.
“A lot of people think of (child care) as just a family issue, but it is absolutely a business and economic issue,” Chamber President Danny Seiden told AZCIR. “It has a major role in employment decisions that families make, and it has a significant impact on employers and productivity.”
In 2021, the Arizona Chamber partnered with the U.S. Chamber of Commerce Foundation to quantify that impact. It found instability in the state’s child care system cost Arizona an estimated $1.8 billion in economic activity a year, as gaps in care forced parents to forgo professional and educational opportunities.
In 2023, a ReadyNation study largely funded by the Helios Education Foundation put the state’s estimated annual loss in earnings, productivity and revenue at $4.7 billion.
“If more and more people are not able to have their kids safely watched over while they’re needing to work, they’re going to fall out of the workforce completely,” Seiden said, noting that it costs the state far more to financially support a family with no income at all than to help a working parent with child care costs.
“I think that’s illogical, whether it’s a Republican or Democrat, to think that’s a good thing,” he said.
Berk, the Small Miracles CEO, similarly sees the state child care subsidy as “a path to self-sufficiency.” He called a possible return of the waitlist “very worrying.”
Parents, especially single heads of household and those without paid time off or other benefits, need reliable child care to earn a living and advance. Further limiting access to high-quality care disproportionately affects rural communities, low-income families and working women.
“Yes, there are families who stay on child care subsidies for quite a long time,” Berk said. “But, you know, those families are working, they’re contributing to society, and they’re earning the wage that our society pays, which unfortunately, doesn’t support paying for early childhood education.”
This article first appeared on Arizona Center for Investigative Reporting and is republished here under a Creative Commons license.
