By Emily Kestel, Fearless editor
Editor’s note: This is the second and final part of a series on the issue of child care in the state. Part one introduced the current workforce shortage in the child care industry and what’s currently being done to address the lack of available slots in the state. In this article, we detail the Governor’s Child Care Task Force recommendations, which were released to the public in November.
Let’s say you have a baby. You’re lucky to be employed by a company that offers a few weeks of paid parental leave, but when your infant is 6 weeks old, you have to return to work. Your partner also has to go back to work, so you must find child care.
The trouble is, there aren’t any providers within a 10-mile radius that can take your baby, so you have to look in a neighboring city. You eventually find one, but it’s going to cost you about $200 per week – or more than $10,000 per year. There’s no choice but to pay it – you have to work.
Eight months later, the provider calls you with some bad news: She’s very sorry, but she’s quitting and closing her business. She loves your child and loves what she does, but can no longer survive making just $25,000 a year.
For years, this has been reality for thousands of parents and providers. Child care advocates have long pleaded for solutions, but until recently they weren’t getting anywhere.
Child care is a family issue – it’s not our responsibility, policymakers would imply.
Until the pandemic. What was a simmering crisis suddenly began boiling over. Iowa lost nearly a third of its child care slots, which created a loss of revenue for providers and reduced availability for the children of essential workers, who didn’t have the privilege of staying at home.
The Economic Recovery Advisory Board, assembled by Gov. Kim Reynolds in June 2020 to identify solutions for the state’s recovery from the pandemic, concluded that priority No. 1 should be addressing the child care crisis.
Out of that recommendation, the Child Care Task Force was created less than a year later, tasked with developing “a comprehensive strategy to address Iowa’s child care crisis,” which would be used as “a foundation for potential action by the Governor, legislature, communities and employers to reduce both short and long-term barriers.”
Leaders in the areas of nonprofit and community-based organizations; child care development homes and centers; municipal governments; state government agencies; chambers of commerce; and various industries in the private sector, including banking, agriculture and construction, were appointed to serve on the task force.
The following 18 people served as members of the task force and also served in one or more working groups, which met weekly through Zoom. Working group focuses were: increasing employer investment and engagement opportunities in child care; regulatory barriers and financing options; expanding eligibility for child care assistance; and child care workforce issues:
- Chair: Emily Schmitt, Sukup Manufacturing
- Jennifer Banta, Iowa City Area Business Partnership
- Lisa Gates, Friendship Village
- Miranda Niemi, Quality Beginnings
- David Arens, Wells Fargo (now at Private Wealth Asset Management)
- Philip Herman, Highland Park Community Development Association
- Mary Janssen, Child Care Resource & Referral of Northeast Iowa
- Dawn Oliver Wiand, Iowa Women’s Foundation
- Dianna Williams, Ann Wickman Childcare Center YMCA
- Erika Fuentes, Crittenton Center
- Teree Caldwell-Johnson, Oakridge Neighborhood
- Roy Buol, mayor, Dubuque
- Josh Laraby, Fairfield Economic Development Association
- Jenna Ramsey, Stanton Community Development
- Amy Bice, child development home provider, Cherokee
- Raven Walker, child development home provider, Council Bluffs
- Tessa Dinsdale, Lincoln Savings Bank (now at Security National Bank)
- Gene Newgaard, mayor, Iowa Falls
An additional 55 people who were not members of the task force sat in working groups.
The task force produced a list of 15 recommendations, detailed in a 32-page document.
Iowa Workforce Development Executive Director Beth Townsend served as an adviser to the task force and sat on several working groups. She stressed the need for a systemic approach to addressing the child care crisis.
“This is not a single-issue issue, it’s got multiple factors in play and it’s going to take multiple responses to fix it,” she said.
At the first meeting of the task force in April, Janee Harvey, division administrator for Adult, Children and Family Services at Iowa DHS, implored the task force to think big.
“We did not want them to feel limited,” Harvey said. “We wanted the task force members to think outside of the box, be innovative and look to other states. … What would have the most profound effect on the providers, workforce and the families who access the child care entities?”
Emily Schmitt, chief administrative officer and general counsel at Sukup Manufacturing, chaired the task force. She stressed the need for recommendations that would last.
“We need to make things sustainable for child care. We can’t keep having things swing back and forth. … It needs to be consistent throughout the years,” Schmitt said.
Business coordination. Through a partnership with the Iowa Economic Development Authority, create a full-time position for someone who would serve as a navigator to help businesses, employers, advocates and communities understand solutions to child care found in the Iowa Women’s Foundation business solutions toolkit.
In 2020, the Iowa Women’s Foundation formed the Iowa Business and Child Care Coalition to address the workforce gap caused by the lack of child care. They created a 28-page toolkit containing “solutions to help businesses address the various ways in which a lack of child care affects workforce participation.”
The six solutions included in the toolkit are: flexible work arrangements, flexible spending accounts, subsidized child care, backup child care, on-site child care and off-site child care or nearby partnerships.
“A lot of people will tell you that if businesses would just write a check, that’ll solve all of the problems. No … that’s not what this is about. This is about … viable solutions that a business can look at and investments they can make to really make a difference,” said Dawn Oliver Wiand, president and CEO of the Iowa Women’s Foundation.
Oliver Wiand said she’s excited about the creation of the position and hopes it’ll be up and running as soon as possible. She added that IEDA has released the request for proposal for the position and the Iowa Women’s Foundation will have to apply, but it’s not certain that it will be awarded the contract.
Business slots. Establish a tax credit program that would incentivize employers to purchase available openings at a nearby child care center as a benefit to its employees. The employee would cover some, if not all, of the cost of the slots that they use, while the employer would cover the cost of unused slots, so the provider would still maintain a stable funding stream.
Several employers are already doing this, the report noted.
In Ottumwa, JBS USA and Swift Prepared Foods partnered with the local YMCA to fund its child care renovation and expansion project in return for affordable child care for their companies’ employees. JBS contributed $600,000 toward the project and will receive 40 discounted slots at the updated facility.
Pella Corp. partnered with New Horizons Academy to remodel an existing child care center to create a capacity for 214 children – expanding the availability of child care in the community by 43%. Pella Corp. plans to reserve a limited number of spots and is exploring the potential for discounted rates for the children of its employees.
Erika Fuentes, director of Child Development Programs at the Crittenton Center in Sioux City, said she’s excited about this recommendation.
“I’ve always said to my team, ‘How would I ever expect you to take care of other people’s children if you can’t take care of your own?’ So to apply that to a business, ‘How can I ask you to be doing a job when I’m not even helping you care for your family?’ That’s part of taking care of each other,” Fuentes said.
Business investment credits. Create an Iowa Child Care Investment Tax Credit program that would make businesses eligible for a 20% refundable tax credit for investing in the construction or acquisition of a nonprofit child care center that would be used by its employees. It would also give businesses a 5% refundable tax credit for the annual cost of providing child care to the employees’ children.
The report notes that in South Carolina, businesses are eligible for a tax credit equal to 50% of the cost of establishing or operating a child care facility for its employees, ranging from mortgage or lease payments to equipment costs, building improvements and donations to nonprofit organizations.
Property tax parity. Create a subcategory of commercial property for child care centers that would treat them the same as residential, in-home care operations.
Currently, child care centers are considered commercial property for tax reasons, while in-home providers are considered residential property. This recommendation would treat the two the same for the purposes of applying assessment limitations, lowering the property tax burden for center providers.
“That was something we heard loud and clear, that they wanted to be considered a lower property tax value,” Schmitt said.
Vickie Brandenburg is the owner of Lionheart Kids in Iowa City. She did not sit on the task force, but said she’s hopeful this recommendation will become a reality.
“I have been saying for a long time that early childhood should have reduced property taxes. … This is the first time that I’ve heard it at the state government level.”
Vacant school rehabilitation. Create a pilot project led by the Iowa Economic Development Authority that would transform vacant school buildings into child care centers.
As of spring 2021, Iowa school districts reported at least 49 vacant school buildings, 15 of them being in suitable condition to be turned into child care centers with the upper floors used for housing or small businesses.
The report noted that “school buildings are a natural fit for child care since they are already designed for children,” and that “reusing vacant school buildings is a cost-effective way to provide space for child care centers in rural Iowa.”
Child care challenge fund. Support and continuously review the Child Care Challenge Fund to increase the availability of child care slots.
Through a partnership with Iowa Workforce Development and the Iowa Department of Human Services, Iowa launched the Child Care Challenge Fund in January 2021 to aid in the construction of new child care facilities or renovation and expansion of existing structures.
The fund matches private investments dollar for dollar and helps close fundraising gaps to start projects. In its initial round, the initiative doled out $13 million in grants to more than 60 providers.
Reynolds has announced the state will channel another $10 million to the 2022 Child Care Challenge Fund.
While many providers expressed gratitude for the fund, some want to see more state investments in programs that already exist.
“I wish there was more money for building out or reinforcing and reinvesting in existing centers. I think it’s great that we’re investing in new development … but to me, existing centers are the bread and butter of the industry right now,” Teree Caldwell-Johnson, CEO of the Oakridge Neighborhood, said.
Iowa was allocated $200 million from the American Rescue Plan in 2021 to provide stabilization grants to licensed centers and in-home providers to help support personnel and equipment costs as well as paying the rent or mortgage. Programs that can prove they’ve suffered a financial loss due to the pandemic or have at least 25% of their children on child care assistance are eligible. Funding amounts range from $20.30 to $44.02 per child, per day for the initial three-month period of the award. Applications are expected to open in January 2022.
“The stabilization grant is coming about a year too late,” Brandenburg said, saying other states released similar grants months ago. “I’ve heard Iowa wanted to be very intentional about what they were doing with the grant. But the fact is, programs need help now.”
Brandenburg also raised concerns about the eligibility requirements for the stabilization grant.
“There are programs I’ve talked to that won’t qualify because they made cuts to try and stay open, so they didn’t lose money,” she said.
Sales and use tax exemption. Create a sales and use tax exemption on the building materials used for the construction or expansion of licensed child care centers, which would lower construction costs.
Iowa law allows contractors to purchase building materials for construction contracts with state agencies and other exempt entities without paying sales and use tax on them, the report read.
Best places for working parents. Implement an initiative that would designate the Best Place for Working Parents in the state. The policies reviewed for the designation would include paid health care, paid time off, paid parental leave, on-site child care, child care assistance, backup child care, flexible hours, remote work opportunities and lactation benefits.
The Best Place for Working Parents initiative was created by the Miles Foundation in Texas. The foundation found that businesses that provided child care for their employees decreased job turnover by 60%.
Reynolds has indicated that Iowa will begin recognizing businesses with this designation beginning in January 2022.
Shared services. Develop a model that would allow child care providers to access a statewide, online partnership platform for support on various business operations like payroll, retirement benefits and group purchasing for insurance.
The report notes that 32 states and Washington, D.C., have already incorporated a shared services initiative.
Several task force members said this recommendation was one that they were most excited about, saying that it opens opportunities for more resources.
Harvey said the state is “aggressively pursuing” how it can use shared services, calling this recommendation a “big-ticket item.”
“This is going to make doing child care so much easier for the people who do it. It’s hard not to be really excited about it,” she said.
Raven Walker, an in-home provider in Council Bluffs, is hoping that through this recommendation, a substitute pool can be created, similar to what K-12 schools use.
“Home providers can’t afford to keep extra staff on retainer just to cover ratios if somebody calls in sick,” she said.
Reynolds indicated in a press release that Iowa is moving forward with making this recommendation a reality, saying that the system will be available in 2022.
Fire and safety code requirements. Create a transparent and consistent policy for fire and safety code requirements in child care settings.
All structures must adhere to state fire and safety codes. But municipalities are given leeway to add to the fire code to make it more restrictive, said Dave Arens, founding partner at Private Wealth Asset Management. For example, that could mean it would be more difficult to open a center in Johnson County than neighboring Linn County.
Child care assistance. Provide more flexibility in child care assistance program requirements to help more working families and providers.
The topic of child care assistance has been hotly debated in recent legislative sessions.
Currently, the initial eligibility level to qualify for child care assistance is 145% of the federal poverty level, or an annual income of $25,259 for a single parent with one child or $38,425 for a family of four. The Iowa Legislature passed a bill last year that addressed the child care cliff, which is when families start to lose assistance because they make too much money to qualify. Now, families that make between 145% and 250% of the federal poverty level still receive benefits, though they begin to phase out once the 225% threshold is reached.
In fiscal year 2021, 31,152 children from 16,652 families received child care assistance.
For many providers, though, accepting children on child care assistance can be a gamble because doing so instantly causes them to lose money.
Providers that accept kids on child care assistance currently receive a reimbursement rate ranging from the 50th to 75th percentile of the 2020 Market Rate Survey, depending on the type of program, age of child and the program’s quality rating, the report states. Data from the 2020 Market Rate Survey shows that the 75th percentile of half-day rates ranged from $12.50 to $23.21 per half day.
Brandenburg said she calculated that if she took an infant on child care assistance versus an infant with a private-pay parent, she would lose $500 a month.
Walker likens it to selling a house. If you get a cash offer versus a loan offer on your house, you’re going to take the cash offer because it gives you more consistency, she said.
Furthermore, when a child receiving assistance is absent, providers are only paid through the state for up to four days a month. If the child is absent for more days, they aren’t paid for them. The task force therefore recommended an increase in allowable reimbursed absence days.
On Nov. 1, 2021, DHS began using funding from the American Rescue Plan to increase the number of absent days from four to six days per month. The change will be effective through Sept. 30, 2023.
As of July 2021, according to CCR&R data, out of 4,961 child care programs surveyed, 68% reported that they were willing to discuss accepting kids on child care assistance.
Brandenburg said many providers, though, only accept child care assistance for their employees, or cap the limit of kids on child care assistance to 20% of their total enrollment. She believes increasing the DHS subsidy rate would get more programs to accept child care assistance.
Jennifer Banta, vice president of community engagement and advocacy at the Iowa City Area Business Partnership, believes child care assistance should be expanded.
“The cost of child care is going up so much faster than wages are going up, we need to really think about who can participate and expand that.”
Many child care advocates are pushing for a maximum initial eligibility of 185% of the federal poverty level – $32,227 for a single parent with one child, or $49,025 for a family of four.
Blended child care and education. Blend child care and preschool options, which would expand early learning opportunities.
In 2007, Iowa launched its state-funded preschool program for 4-year-olds, which provides at least 10 hours a week of instruction. Iowa spends about $86 million each year on the program, yet only 55% of Iowa’s 4-year-old children attended in 2020.
Education leaders say enrollment numbers are that low because of space constraints and complications for parents, who may need to keep their kids in a full-time child care setting due to work schedules.
Blending child care and preschool would help address those barriers, the report stated.
Reynolds said that through Elementary and Secondary School Emergency Relief funds, the Iowa Department of Education is making $100,000 in grants available for blended child care and preschool programs.
Child care enrollment hub. Develop a centralized online hub where parents can quickly and easily find information about child care facilities, openings, enrollment and tours.
Currently, updates on child care openings are available through a DHS portal that’s dependent on regular data inputs from providers, which often leads to incomplete or outdated information.
The task force said that through the central information system, Iowa should explore technology that would allow for updates in real time.
“The enrollment hub will be a big assistance,” Schmitt said.
Workforce education compensation. Continue to support workforce education opportunities while leveraging new ones to help fill the gap for those interested in pursuing the child care profession.
This would include T.E.A.C.H., a scholarship program that provides access to discounted education and counseling support; and WAGE$, which provides salary supplements to those in the early education and child care workforce based on their level of education.
Those with a master’s or doctorate degree with at least 24 early childhood credits can earn up to $5,250 a year through WAGE$.
In the last three years, T.E.A.C.H. has supported more than 1,100 early childhood professionals. The retention rate for WAGE$ participants in Iowa is 84%, according to DHS data.
In June, Reynolds announced that DHS will use federal funding to expand the programs through fiscal year 2022.
Brandenburg said that in theory, WAGE$ sounds great, but because it’s only available to those with some level of education beyond high school, it leaves out people who don’t want to continue their education.
“If you’re a person who has been in child care for forever and a day and you’re 50 years old and don’t want to go back to school, you don’t qualify for that stipend,” Brandenburg said.
The task force recommended that the state look at new opportunities to enhance workforce recruitment efforts, which include tuition assistance for those interested in pursuing a career in early childhood education as long as they commit to work in the field for a certain number of years; work-study programs that would allow high school students to earn credits toward an early childhood education degree; and a registered apprentice program.
Central Campus in Des Moines is one example of a school that has a program that prepares high school students to work in the field of early childhood education.
Child care providers have made it clear that there’s a need to professionalize the child care field.
“Until we treat this profession like professionals, we are going to have a really hard time getting people to join this career path and continue to develop their skills. … One of the things that we talked about so much during the task force was having pride in your work, and we need to make child care professionals feel proud of the work that they do,” Banta said.
Angela Lensch is a longtime early childhood educator and a board member of Early Childhood Iowa. She did not sit on the task force, but stressed the importance of early childhood education.
For the majority of child care workers, the only education required – beyond training requirements like CPR, child abuse reporter training and first aid – is a high school diploma, Lensch said. Teachers, however, are often required to have an early childhood endorsement or similar education.
Ratio requirements. Reexamine staffing restrictions and the child-staff ratios to determine whether regulatory changes should be made.
The state’s child-staff ratio guidelines require that one adult must be present for every four children aged 2 weeks to 2 years. The ratio increases to 1 adult for 6 children aged 2, 1:8 for 3-year-olds, 1:12 for 4-year-olds and 1:15 for those aged five to 10.
Currently, Iowa’s licensing standards require child care workers to be at least 16 years old or work under the direct supervision of someone who is at least 18.
Harvey said the task force talked about allowing 15-year-olds to count as a full staff member and not be directly supervised, as well as increasing the number of kids per staff, though they were adamant that both ideas would not be rolled out at the same time.
Arens said this recommendation was debated.
“I’m not a fan of monkeying with ratios,” Arens said. “When you reduce the number of adults responsible for the kids in the room, it can be a health issue and an education issue.”
The task force also listed 12 “just do it” recommendations, which were defined as “common-sense process initiatives that the state can put in place with relative ease.”
The “just do it” recommendations included implementing a child care workforce sign-on and retention bonus structure through DHS, creating a workforce pipeline, streamlining federal background checks, encouraging hospitals and medical facilities to provide child care information to new parents, reexamining the quality rating system, and setting up lending libraries to share tangible resources, like books and videos.
What was left out?
Many task force members felt as though the recommendations that made it into the final report were a good start, though more is needed.
Arens referred to the task force recommendations as “a spark we need to turn into a real strong flame.”
Several task force members, as well as providers who did not serve on the task force, expressed concerns about the lack of recommendations that address the workforce crisis, particularly regarding wages and benefits.
“We didn’t go as deep and as wide as we could have in the discussions about workforce, workforce development, professionalism of the industry, and professional development and retention and recruitment,” Caldwell-Johnson said.
Miranda Niemi, executive director of Collins Aerospace Day Academy, pointed out that when the task force submitted the recommendations back in July, the workforce shortage “hadn’t even gotten that bad yet.”
“The recommendations that we put out, we’re like OK, great, these are really going to help. There’s some things for the workforce but there’s not a whole lot,” Niemi said. “That’s because our workforce tanked after the recommendations were given to the governor.”
Child care workers in Iowa make an average of $10.18 per hour, or $21,170 per year. Low wages and lack of benefits have recently driven child care workers out of the industry. U.S. Labor Department data shows that the child care services industry nationwide is still down more than 100,000 workers compared with pre-pandemic levels.
Many people interviewed also mentioned that child care workers could go down the street and work at places like Target, Walmart or a fast-food restaurant and make more money.
“You can go to Taco John’s and make $15 an hour and you’re not worrying about anybody’s brain development,” Fuentes said.
One recommendation that didn’t make the final report, Janssen said, was one that would provide direct payments to staff in the child care workforce to combat low wages.
Townsend urged caution about the use of subsidies to address workforce issues and questioned whether or not it’s sustainable.
“You don’t want to create a workforce that’s dependent on the subsidies and then when they go away, you lose half your workforce. You’re kind of setting yourself up to fail.”
On other hand, though, Townsend said, “We can’t raise wages on the backs of increased fees to parents, because that’s not sustainable either.”
Other task force members pointed to the recommendation about supporting workforce education, arguing that creating more opportunities for child care workers to further their education will help address the workforce issue in the long term.
Nine people interviewed for this article mentioned the need to “professionalize the profession.”
“We need to fund some education for child care providers. I need to see businesses contributing; the government has started contributing – we need to see that. I want child care providers to go into the field and not be afraid of it,” Lensch said, adding that if she were a counselor, she likely wouldn’t recommend that students go into the early childhood education field.
“It would be hard for me to set somebody up for failure,” Lensch said.
During the task force, occasionally someone would refer to child care workers as babysitters, Banta said.
“These people are not babysitters. Eighty-five percent of your cognitive development happens before age 3. Your reading scores, your ACT scores are based on what happened between the ages of 0 and 5 before you even got into a classroom,” Banta said. “We should treat this profession as if they’re surgeons. … They need to be celebrated.”
Addressing the workforce will be the one piece that will help move the child care issue forward, Janssen said.
The workforce issue is rooted in this idea that what child care providers do isn’t all that important, Walker said. “Why would you go to college for four years to be viewed as a babysitter when you can go and teach kindergarteners and be viewed as an actual educator?”
Kyle Roed is a child care advocate in Black Hawk County and the vice president of human resources at CPM Holdings in Waterloo. He did not serve on the task force, but said he would have liked to see something in the recommendations about parental leave.
“That’s a really common request for my employees. We do not have it yet. We’re considering it. … It’s expensive. It’s hard … I would like to see maybe some incentives — like tax write-offs — on the other end that said, ‘Hey if you offer this benefit, here’s this support to help you provide new parents paid parental leave.’”
What will it take for this issue to be solved once and for all?
Task force members and child care advocates seem to have slightly different ideas on how to address the child care crisis, but all say it must be sustainable.
In a press conference on Nov. 3, Reynolds said the child care crisis is “not going to be solely addressed by the government,” and that “the private sector also plays a role in this.”
“Business engagement has been long overdue,” Townsend said, adding that it has to be accessible. “It’s one thing to say that we want more businesses to have child care facilities or be involved in providing child care slots. What does that really mean? What does that look like? A lot of times businesses don’t want to do it because it can be a pretty cumbersome process to set up a center or have something onsite.”
Banta believes that businesses do have a role to play, though she doesn’t think they’re going to be a big piece to the solution.
“Businesses are strapped right now. I do not know a business that’s not working their butts off to recover from the pandemic. … They’re not going to be our savior in this.”
Instead, Banta says that government intervention is necessary.
“I think it’s going to have to be subsidized in some way at some point, whether it’s state or federal,” Banta said. “I have spent thousands of hours thinking about how to solve this problem, and I just cannot figure out how to do it if it continues to be a market-based solution. At some point, the government is going to have to start subsidizing it.
“If the price of beef goes up, you charge 50 cents more on the menu for a hamburger. But you don’t have to go buy a hamburger, you can stay home and eat a turkey sandwich,” she said. “With child care, if the prices go up … you have to pass it on to the consumer [the parents]. … I think we’re at a point where the consumer can’t carry the load of that market-based solution anymore.”
Brandenburg agrees. “Everyone has their opinion about what role the government should or should not have in early childhood. But the facts are, parents cannot continue to pay this rate or more and still be able to have both parents working.”
Brandenburg added she’d like to see a tax that is tied directly to early childhood education. She brought up the example of a proposal for an increase in the tobacco tax to help expand early childhood education programs.
Niemi said she’d like to see “child care and early childhood in general funded like the K-12 systems.”
Oliver Wiand said she’d like to see the child care system set up like the U.S. Military Child Development Program, where payment structure is based on parent income. The remainder of the funding comes from appropriated funds through military construction funds and other operational accounts as well as nonappropriated funds.
Several task force members also believe that public-private partnerships are the way forward.
Many of the recommendations require legislative or executive action.
Townsend believes the task force recommendations will influence Reynolds’ legislative agenda, and added that she’s hopeful the Legislature will look at the report and use it to support what they end up trying to push through.
Schmitt said her priority is getting the report into the hands of the public so community members can talk about it with their elected officials and continue conversations into the future.
“I hope this report gets coffee stains, bent up, written on and printed out more than once.”
Editor’s note: This article has been updated to reflect a correction on the ratio requirements.
Jeff Carbine · February 16, 2022 at 9:00 am
I found it interesting when you said increased corporate involvement and participation opportunities in child care; regulatory impediments and finance choices; extending eligibility for child care support; and child care workforce difficulties were among the working group’s main concerns. I used to think differently about it not until you explained it briefly and it really got my attention. What you said about child care was really interesting to me.
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