While other states face child care funding cliff, Minnesota avoids disaster

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Most of the pandemic-era federal funding that raised pay for child care providers and kept day cares open expired over the weekend, but in Minnesota, the programs will largely continue with state funds.

Across the country, thousands of day cares are expected to close due to the expiration of the federal money, worsening a child care shortage that has persisted since well before the pandemic. 

In Minnesota, more than 8,200 child care providers serving 212,500 children received $324 million in American Rescue Plan Act stabilization grants. Those funds expired Sept. 30.

Minnesota’s child care demand is much greater than the supply; in June 2022, the state was short nearly 100,000 child care slots, according to data from First Children’s Finance. 

The shortage is keeping mothers out of the workforce at a time when labor is in high demand. 

Facing the expiration of federal funds, the DFL-controlled Minnesota Legislature approved nearly $1.3 billion in child care funding last session. About $575 million is available over the next four years to continue a federal program that improved pay and benefits for early educators.

The Legislature also increased the number of subsidized child care slots by more than 50%. 

The historic funding, however, still won’t be enough to close the gap between child care demand and supply. 

Other states, particularly those with Republican-controlled state legislatures like Texas, Missouri and Louisiana, opted for smaller investments that fell far short of covering the expired federal funds. 

Democratic-controlled New York took a similar path as Minnesota, allocating $500 million to child care in the coming year.

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