Blog Posts > Will Child Care Investments that Helped Families and Providers Through the Pandemic Disappear?
March 30, 2022

Will Child Care Investments that Helped Families and Providers Through the Pandemic Disappear?

West Virginia and the United States as a whole are outliers compared to the rest of the world regarding the provision and generosity of policies that support working families. Relative to our peer Organization for Economic Cooperation and Development (OECD) countries, we spend far less on child care and early education, which has adverse impacts on school readiness, future earnings potential, health outcomes, and the ability of parents to work. However, for a short time during the COVID-19 pandemic, policymakers seemed to shift course, investing significant public funds in support of these critical programs. Now, as temporary crisis funding is exhausted, we are at a crossroads that will determine whether these program expansions – and their accompanying benefits to family well-being and our economy – will disappear.

West Virginia’s Pre-pandemic Child Care Landscape

Prior to the pandemic, West Virginia faced many challenges related to underinvestment in our child care and early education system. Child care is a labor-intensive industry where the cost is simultaneously incredibly high for families and unacceptably low-paying for care professionals.  While annual child care costs per child in West Virginia average $9,360 for an infant and $5,871 for a toddler, the median wage for a child care provider in the state is just $10.63/hour.

These affordability challenges are magnified in rural areas like West Virginia, where accessibility is also an issue. Nearly two-thirds of families in West Virginia live in a child care desert, defined as a community where there is no child care or far too few child care slots relative to the number of children under six, resulting in three or more children for every licensed child care slot.

Pandemic-related Federal Investments

During the pandemic, several federal relief packages were passed that included funding to support child care providers and families with children including the Coronavirus Response and Release Supplemental Appropriation and the American Rescue Plan Act. Together these packages brought over $300 million into West Virginia’s child care system. This additional funding allowed the state to make several temporary improvements including:

  • Providing child care assistance to all essential workers regardless of income;
  • Allowing child care centers and in-home child care providers to receive reimbursement based on enrollment rather than attendance;
  • Temporarily increasing provider reimbursement rates including tiered reimbursement rates;
  • Providing funding for capacity grants for new providers to assist in startup costs;
  • Assisting current providers in expanding capacity to care for more children;
  • Funding quality bonuses to offset increased costs of providing quality child care during the pandemic; and
  • Allocating additional funding to Child Care Resource and Referral (CCRC) agencies to support increased operations costs during the pandemic.

These provisions had a significant impact on the ability of child care providers to keep their doors open and even increase their capacity in some cases. This is evidenced by the fact that prior to the pandemic, West Virginia had just over 38,000 licensed child care slots statewide, and now we have about 39,421, leaving us ahead of where we were pre-pandemic, though more research is needed to determine whether these slots shifted to more populous areas or older age groups. While these policies were able to help West Virginia’s child care infrastructure weather the storm, they are temporary and, without permanent state and federal funding sources, West Virginia will soon exhaust the resources that supported these protections and improvements.

Inadequate Federal and State Action in 2022

With robust federal funding support for work supports like child care, West Virginia and the country have seen a historic bounce back from the pandemic recession, though some industries and populations, including Black men and women, still have yet to rebound at the levels of their white peers. Unemployment is at historic lows while hiring continues to steadily increase. That said, it remains to be seen if policymakers at the state and federal levels recognize the importance of continuing these critical investments which have bolstered both family financial security and our economic recovery.

At the federal level, bold child care funding provisions were included in the U.S. House-passed Build Back Better Act (BBBA), including raising wages for child care workers and increasing subsidies for child care for families with children. In West Virginia, the BBBA provisions would increase the number of children receiving child care subsidies ten-fold, from 5,664 currently to over 59,500 once fully phased in.

Because the subsidy expansions would dramatically increase demand for child care, the BBBA also included provisions to increase child care supply by increasing wages for child care professionals, recruiting new early educators, opening additional classrooms, and supporting the development of many new child care businesses over the next few years. Unfortunately, the status of the BBBA or any social spending packages at the federal level remains unclear.

During the recent West Virginia legislative session, little was done to address child care needs. Three bills were introduced, with just one passed.

SB 656, which passed the Legislature and is currently awaiting Governor Justice’s signature, provides a tax credit to for-profit and nonprofit corporations who establish child care facilities for the benefit of their employees, as well as a tax credit for employers who sponsor child care benefits. The tax credit would be applied against the corporate net income tax for for-profit corporations and against personal income tax withholdings for non-profits. While the legislation’s intention is to help more workers access child care by encouraging employers to prioritize it as a benefit, it could easily exacerbate current inequities in our system where child care is predominately accessible to high wage workers living in more populous areas of the state. According to the bill’s fiscal note, the legislation is “ripe for exploitation” and could have “some significance” on the state’s budget as the tax credits will reduce the General Revenue Fund. A potential unintended consequence could be that losses in the General Revenue Fund could cause cuts to discretionary programs like child care subsidies for low-income families, worsening inequities already faced by poor and rural families.

Two other bills, which were introduced but not passed, would have made permanent important pandemic-related improvements in the child care system. HB 4792 would have required child care centers to be reimbursed based on enrollment rather than attendance, continuing a policy which has had positive impacts on child care centers’ budgets. It was considered in the House Health Committee but stalled in House Finance. HB 3212 would have provided up to $8,000 of financial assistance per child per year to essential employees who met income eligibility requirements. It would have also commissioned a study of the state’s child care infrastructure by the Department of Health and Human Resources (DHHR). It was not taken up at all.   

It has become abundantly clear during the pandemic that quality, affordable, and accessible child care is a critical component of a healthy economy and a state that prioritizes children and families. While an influx of pandemic-related funding has allowed our child care infrastructure to remain intact, what happens next is just as important. Policymakers at all levels of government must prioritize public investments in permanent expansions of affordable and accessible child care for families, as well as increased wages, benefits, and professional development for child care providers.

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