The Child Care Funding Cliff

by Alex Maykowski
Senior Manager Public Policy & Organizing

On September 30, 2023, $37 billion in federal pandemic-era child care support expired. The child care system was already in a precarious position before the pandemic, with a large percentage of parents unable to find or pay for child care. This loss of federal funding will deepen the problem. 

Many parents spend more than 20 percent of their income on child care, yet child care centers can barely afford to keep their doors open and teachers rarely earn a living wage. 

In California, which received $5 billion in federal funds, a report from the Century Foundation projected more than 3,000 programs would probably close, and 84,000 children would lose access to their care, once the federal support ended. 

The estimates were based on an October 2022 survey by the National Association for the Education of Young Children of 12,000 providers nationwide; one-third of directors and owners receiving pandemic relief funds reported that they would have closed permanently without the grants. One in four said they would raise tuition for working families when the federal funds expire. More than a quarter said they would cut staff wages, down from an average hourly rate of $14.22 nationally. 

Before the end of September, a bicameral group of Democratic lawmakers introduced the Child Care Stabilization Act to extend the vital federal child care stabilization funding. As that stalled amidst turmoil in the House of Representatives, President Biden, in late October, asked Congress for $16 billion in child care funding to keep the aid expiration from upending essential services for millions of families. 

Locally, child care funding finds itself in a precarious position as well, as the City and County of San Francisco faces budget shortfalls. During budget discussions earlier this year $150 million of funding was nearly cut until parents, providers, educators and advocates turned out to City Hall. Further funding faces an uncertain future in next year’s budget as the mayor has already instructed departments to make mid-year cuts.