Child care providers fear cuts to state stipend would set back hard-won stability

Yahoo

02-03-2025

Mar. 2—Youth and Family Outreach, a day care located in a historic red-doored church on Cumberland Avenue in Portland, has been fully staffed for four straight months — the longest streak in three years.
According to Executive Director Camelia Babson-Haley, the child care facility has seen constant staff turnover since the pandemic, a problem that was just beginning to steady thanks to boosts to a state-funded stipend program that gave early childhood workers an extra $240 to $540 per month on top of their regular pay.
"2022, 2023, 2024 were just stunning, and just knocked us on our knees," Babson-Haley said last week. "And part of the reason that we're beginning to stabilize is because of those wage supplements."
But Gov. Janet Mills is looking to cut that stipend program in half as part of her biennial budget proposal, citing an unsustainable level of funding.
Child care facilities like Youth and Family have struggled for years amid a high demand for services, and difficulty in retaining teachers in positions that often pay the same as less-demanding jobs.
A year ago, Babson-Haley told the Press Herald that the stipend had allowed her to raise her minimum hourly wage from $12 to $16, and created hope for a stable workforce. But now, she says, it's unlikely that would continue if the stipends are reduced.
A FRAGILE INDUSTRY
Maine's Department of Health and Human Services began offering a $200 monthly stipend to child care workers in 2021 at the direction of the governor, using federal pandemic aid. The department continued the program with state funding in 2022, and the Legislature increased those stipends last year to between $275 and $625, depending on education and experience, then decreased the range to $240 to $540 over the summer because so many people became eligible. As of last April, more than 7,400 workers were receiving the supplements.
But amid a promised budget crunch, Mills is proposing that Maine return the stipends back to the 2022 funding level.
Lindsay Hammes, a spokesperson for DHHS, said the governor has been worried about the sustainability of the program since the Legislature doubled the stipends last year.
"At the time, the administration expressed concern over the changes — namely that the Legislature would be raising the expectations for family and child care workers that, financially, the state would not be able to sustain, which has proven to be true," Hammes said in an email.
She said the program now costs $30 million annually.
"The Governor does not like having to propose these changes. As the parent to five stepdaughters, she recognizes the value of child care, both for children and their parents, and her administration has worked hard to expand access to child care by delivering grants through her Jobs Plan to build out more child care centers," Hammes said. "Unfortunately, in a tough budget cycle, tough decisions have to be made and we believe it is important to return the program to a sustainable level of spending, as we initially had, so that we can continue it far into the future."
But child care workers say the latest increase in stipends had just allowed the industry to get stabilized, and cuts could set them back and create negative ripple effects in the state's economy.
The Legislature's Appropriations and Financial Affairs Committee received more than 100 pieces of written testimony in opposition when it held a public hearing earlier this week, where about 40 people also spoke against the proposal.
"Reliable, affordable child care is not a luxury — it's a fundamental building block for a thriving workforce. The educators who provide child care are the unsung heroes of the economy," said Morgan Hart Tolin, a co-executive director of the Maine Association for the Education of Young Children, testifying on behalf of a group of day care operators.
"But right now, we are dangerously close to losing more of those educators. The governor's proposed $15 million annual cut to the salary supplement program is a direct threat to an already fragile industry."
NEWLY STABLE FOOTING
Babson-Haley has spent 25 years as the executive director of the Portland day care center, which offers services for children up to age 5, including pre-K. The center has 62 students, 60% of whom come from low-income families. At full staffing, they have 15 employees, plus five Portland Public Schools staff for the pre-K program.
"In 2024, we had seven resignations and five new hires," she said Tuesday. "The constant revolving door is feeling like it's just starting to stabilize a little bit."
Babson-Haley said she can't envision cutting back wages — which currently start at $18 an hour for teachers. Instead, she said the center will have to shoulder those costs by raising tuition and dipping into the endowment and leftover funds from a COVID-era loan program. Youth and Family's current tuition is $404 a week for infants, and $347 a week for preschoolers.
Most of their new hires are immigrants, which Babson-Haley said is important, because most of their students are, too. The center also began offering completely free tuition for children of employees in 2022, which she said has helped with retention and creating a family atmosphere.
But even with benefits, child care centers continue to struggle because their wages are comparable to jobs in fast food or retail.
"Outside of this field, the work is not as intensive and taxing, and it's paying more," said Charlotte Jacobs, the program director at Seedlings to Sunflowers, a child care center in Gorham.
Seedlings to Sunflowers offers a 50% tuition discount for employees, and has been expanding that benefit with the Child Care Employment Award Program, a two-year pilot program included in the state's last biennial budget that helps employees pay for their own child care.
It's also no longer included in the governor's proposed budget.
The Mills administration said in a written overview of its proposed DHHS cuts that the program has proven to be "mostly duplicative, as many workers enrolled in the program already qualify for assistance paying for child care through Maine's Child Care Affordability Program" and said cutting it will save $2.5 million annually.
At Seedlings, of the 20 employees who are eligible for the program, only three are currently enrolled. The rest are still on the waitlist.
Meghann Carrasco is Seedlings' founder and executive director. Across two locations, the center serves about 170 kids from infants to pre-K. The starting pay for teachers is $18 to $20 an hour, and the center has 45 staff members.
Carrasco said Seedlings had trouble keeping and finding staff after the pandemic, and was able to avoid raising tuition by relying increasingly on state funding. Now she's worried they'll have to, although as a nonprofit, Carrasco said Seedlings will also plan to lean into fundraisers and grants to make up for that loss.
Because the stipends kept increasing, she's worried their loss will hit the workforce even more harshly.
"Not only have more educators entered the field, but I worry that with such fragile entry-level people, they'll be like, "I'm out of here — this is so unstable,"' Carrasco said. "And on the other side of that, we have very seasoned people, who are maybe in their 40s or 50s, who have invested their entire lives to this field, who I've already seen — and I'm worried that this will compound the issue — leave the field."
ECONOMIC CONSEQUENCES
Child care workers say they know the financial climate in Maine is tight, and that cuts have to come from somewhere. But they argue the long-term economic consequences, on the workforce and the public school system, negate the savings of cutting money for early childhood programs.
"This shouldn't be a cut because it's a foundational need to the constructs and fluidity of our economy," Babson-Healy said. "If working parents don't have child care, they can't go to work. We are the workforce behind the workforce."
The waitlist at her facility has 300 students, and she said most Greater Portland day cares are in the same situation. The ripple effects of the closure of a single facility would be massive.
Carrasco said Seedlings to Sunflowers has a waitlist of 200. But the cost of day care alone drives parents out of the workforce when they realize it's more economical to quit their jobs than pay for child care, which she said is why the stipends are so critical to keeping those costs down.
"It's short-sighted. I know there's anxiety about how the budget is going to be fed," she said. "But if we don't stabilize this field and continue to invest in this field, there will be nothing to build on in this economy."
Day care operators also say there are public K-12 implications for not funding early child care.
Sandra Nadeau, founder of Cocoons Day School in Kennebunk, said the loss of the stipend will ultimately cost taxpayers thousands more down the road, because early child care centers provide learning to children during a period of critical development. She said fewer day care options lead to greater needs like emotional and behavior support or speech therapy for students once they reach public school. Carrasco agreed.
"Kids won't be ready for kindergarten, they'll fall behind, and that impacts the rest of their life. It increases the budget for social-emotional and (Child Development Services) supports within the school system," she said. "Because there's so many studies that show that if you catch behavioral issues early on, typically you're not investing that money down the line."
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