By Emily Kestel, Fearless editor

Two child care instructors tend to a room filled with young children.
Marilyn Wenberg (standing) and Carmen Anstey (sitting) care for kids in the 19-26-month room at the Ann Wickman Child Development Center in Atlantic. Photo by Emily Kestel.

In 2021, Gov. Kim Reynolds created the Child Care Task Force to address Iowa’s child care crisis

Its 18 members were tasked with developing comprehensive recommendations that would be used as “a foundation for potential action by the Governor, legislature, communities and employers to reduce both short and long-term barriers” to child care in the state.

The task force produced a list of 15 recommendations. Since the release of those recommendations to the public in November 2021, 10 of them either have been enacted or have at least seen concrete progression. Several others remain in early planning stages. 

In a statement on May 24, Reynolds said: “Already we’ve allocated over $500 million to support child care in our state and created more than 9,000 new child care spots in just one year. But we’re far from finished.” 

Now that the legislative session has ended, here’s a look at what’s been done, and what’s still on the table.

What’s been accomplished 

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. 

The Iowa Women’s Foundation has hired Sheri Penney, the former economic development director in Mitchell County, as its employer engagement director. In her role, Penney will help businesses across the state understand the economic impact of child care, assess their child care needs and understand solutions outlined in the Iowa Women’s Foundation toolkit. 

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. 

In May, Reynolds announced the launch of a new Child Care Business Incentive Grant program to encourage employers to offer child care to their employees. The grant program will provide a total of $25 million in state funds from Iowa’s share of federal American Rescue Plan Act money to support child care projects across the state. The majority of the funds will be used to support local infrastructure investments to build or expand child care capacity. The remaining $5 million will be used to support arrangements between employers and child care facilities to expand and reserve child care slots. The state will begin accepting applications on June 17, and applications must be submitted by July 18. 

Child care challenge fund. Support and continuously review the Child Care Challenge Fund to increase the availability of child care slots. The fund was created in January 2021 to aid in the construction of new child care facilities or the renovation and expansion of existing structures. 

Reynolds in January announced $36.6 million in grants through the Child Care Challenge Fund. The grants went to 108 programs in 72 communities, and were expected to create an additional 5,200 child care spots across the state. 

For programs that already exist, Iowa was allocated $200 million from the American Rescue Plan to provide stabilization grants to centers and in-home providers to help support personnel, equipment and rent or mortgage costs. 

Ratio requirements. Reexamine staffing restrictions and the child-staff ratios to determine whether regulatory changes should be made.

The Legislature passed a bill this session that established new minimum child-staff ratios of 1:7 for children age 2 and 1:10 for children age 3. Previously, those guidelines were 1:6 and 1:8, respectively. The Legislature also passed a bill that allowed child care center employees who are 16 to work without being under the direct supervision of an adult.

This recommendation was not endorsed by every task force member, and remains contentious among many child care providers, lobbyists and parents

Best places for working parents. Implement an initiative that would designate the Best Place for Working Parents in the state. 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 Iowa Economic Development Authority announced in January that it would launch a statewide program that would recognize employers with family-friendly policies with the designation. 

As of June 10, more than 100 Iowa companies and organizations have been awarded the designation, including Holmes Murphy, Gravitate Coworking, Greater Des Moines Partnership, the city of Norwalk, Bank Iowa, Collins Aerospace, Fareway Stores Inc., Bankers Trust and Dotdash Meredith. 

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. 

This is a recommendation that was heavily favored by task force members. Janee Harvey, division administrator for Adult, Children and Family Services at Iowa DHS, said the project is currently being worked on in phases. A document said the project will include the implementation of a child care management system and the provision of technical assistance through financial management consultants. 

According to the document, a design team made up of child care providers and early childhood experts began working on the project in February and will conclude their work this summer. The child care management system is expected to go live in January 2023, according to a timeline in the document. 

“This will be a very significant contract for the state,” Harvey said, adding that it will bring efficiency to the industry. 

Child care assistance. Provide more flexibility in child care assistance program requirements to help more working families and providers. 

The Legislature this session passed a bill that incentivizes providers to accept more families that receive child care assistance by allowing parents to pay the difference between the child care assistance rates and the rates charged to private-pay families. Supporters of the bill said it will allow providers to accept more families who qualify for child care assistance, which reimburses centers only about 50% to 75% of the market rate. Opponents said it will only increase child care costs for low-income families. 

The Legislature did not expand child care assistance this past session – a move that many providers are in favor of. 

Blended child care and education. Blend child care and preschool options, which would expand early learning opportunities.

Reynolds in November announced the Iowa Department of Education is making $100,000 in grants available for advancing planning efforts for blended child care and preschool programs. Schools in Council Bluffs and Waterloo are currently piloting the project.

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. 

With funds from the Iowa Department of Human Services, the Child Care WAGE$ program will remain in effect through June 30, 2024. WAGE$ provides salary supplements to those who work in child care 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 $5,250 a year through WAGE$.

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.” At least four of the 12 recommendations have seen action by the state.

Harvey said the state is working on ways to ease regulatory burdens on child care providers, which was one of the “just do it” recommendations. She said they’re currently analyzing results of a survey that went out to providers that asked about “pain points” they experience in terms of regulations. 

One “just do it” recommendation was to reexamine Iowa’s quality rating system and consider connecting participation to bonuses. In April, the state rolled out a new quality rating system for child care providers, called Iowa Quality for Kids, or IQ4K, replacing the Iowa Quality Rating System. The program is voluntary and gives providers a chance to assess their current level of quality based on five levels. The higher the level a program achieves, the higher the child care assistance reimbursement rate and bonuses will be. 

Another “just do it” recommendation was to implement a workforce sign-on and retention bonus structure through Iowa DHS to help attract and retain child care workers. In January, Iowa DHS announced it will implement a $30 million recruitment and retention bonus program using American Reinvestment Act dollars. Current child development home providers, licensed child care center staff members and newly hired employees are eligible for the bonuses, each of which is $1,000. Sign-on bonuses will be available 90 days after the date of hire. Six months after the initial sign-on bonus and every six months thereafter, those meeting the requirements will be eligible for retention bonuses until the funding runs out.

The task force recommended that the state continue to support the Rural Child Care Market Study Grant Program to help communities assess the child care market environment and strategies to address child care challenges. Last year, Reynolds announced $100,000 in new funding for the program. 

What’s still on the table 

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. 

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. 

Vacant school rehabilitation. Create a pilot project led by the Iowa Economic Development Authority that would transform vacant school buildings into child care centers. 

Staci Hupp Ballard, a spokesperson for the Iowa Economic Development Authority, said conversations are still coming together on this recommendation and to look for more on it soon. 

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. 

Fire and safety code requirements. Create a transparent and consistent policy for fire and safety code requirements in child care settings. 

While not directly targeting fire and safety codes, Harvey mentioned that there was a bill that worked to reduce local ordinances and regulations if they were stricter than those at the state level, which may apply to this recommendation. 

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. 

Harvey said the state is exploring the feasibility of an enrollment hub as part of the child care management system under the shared services recommendation. 

“It’s aspirational, and we like it as a concept,” she said.

What task force members said

Task force chair Emily Schmitt said people continue to talk about the report and request presentations about it and the issue of child care, which makes her optimistic. “I want communities to [continue reading] the report and let the task force know what would be most impactful in the next [legislative] session.” 

Task force member Mary Janssen hopes the issue of child care will be at the forefront of the next session. “It’s going to take more than one legislative session to make changes; we have to continue to advocate.”

Task force member Dawn Oliver Wiand said she’s excited by the amount of attention child care got in the legislative session and how the governor made it a priority, although she would have liked to see more concrete action, especially with ways to increase wages and benefits for the workforce. “I think we have good steps forward. But to really address it we need to be thinking bigger and bolder … which is what [Reynolds] wanted in the first place. Until we look at how we are funding child care and really step out of the box, we’re just making baby steps.”

Categories: Child Care