Transforming the Financing of Early Care and Education in Minnesota

Minnesota has had a team of experts working for over a year to come up with a Minnesota-specific plan to transform the financing of early care and education.

The current model of financing early care and education is profoundly broken. It does not work for children, for parents, for the educators, for employers or for communities.

Child care costs too much at a time when parents can least afford it.  Current government funding reaches only a fraction of the eligible families

Current financing is complex and not aligned. Financing for ECE is a layering of separate programs, with different funding streams, constituencies, eligibility requirements, and quality standards

Funding is not always linked to quality standards and does not reflect the true costs of quality.

·   Child care programs, centers and family-based programs alike, operate on razor thin margins

·      The wages of early childhood educators are inadequate in all aspects – inadequate to support self-sufficiency of the early care and education workforce, inadequate to recruit and retain educators, and inadequate to reflect the importance of the care and education being provided

These issues result in a shortage of accessible care, with serious implications for families.   

·      Parents, primarily mothers, are not able to work because they can not find suitable care and lose out on income (which increases the likelihood that their children are living in poverty)

The lack of support for a stable and qualified early childhood workforce is problematic.

·      The incomes of most educators is not sufficient to support their households

·      The workforce conditions also result in very high levels of turnover, which hurts both workers and the children they serve.  In 2018, the annual turnover rate was 14.4% for the Child Day Care Services industry compared to 9.1% economy wide in Minnesota.  Turnover increases costs and decreases quality in early care and education programs.

·    The last few decades of developments in child development research has indicated that a deeper understanding of early childhood experiences and early intervention is necessary for the early childhood workforce. Meeting this need requires workforce training that is specifically tailored to early childhood. 

These issues also have broader implications for the larger workforce and economy. 

·      Businesses struggle to find enough workers to fill jobs

·      Taxpayers lose money from lower income and sales taxes

Learn more about our recommendations to transform the financing of early care and education by watching our presentation at the October 2020 Prenatal to Three Policy Forum. You can view that presentation here. (It starts around minute 46:00). You can also view our PowerPoint slides here.

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