Colorado child care providers uncertain of future, as federal assistance stops at end of the month

COLORADO SPRINGS, Colo. (KRDO) -- Colorado child care centers could face major funding issues at the end of September, when federal funding from the 'American Rescue Plan Act' comes to a halt.

The American Rescue Plan Act (ARPA) gave childcare providers about $24 billion starting in 2021, to help keep the industry on its feet throughout the pandemic.

Now that funding is running out, providers are concerned about not only continuing to pay their staff competitive wages, but also stay in business.

"Those early ARPA and stabilization grants were critical for us to keep our doors open," Liz Denson, preside of Early Connections Learning Center in Downtown Colorado Springs said.

Denson said that ARPA funding provided about half a million dollars to help their staff get through the aftermath of the pandemic.

"We received nine payments over the course of nine months, which completely stabilized our organization." explained Denson.

Now as the final day of that funding looms on September 30, she wonders what the next year's budget will look like.

"That's probably our biggest challenge is the unknown of whether or not additional investment will be coming in, what that could potentially look like." said Denson.

Early Connections isn't alone however. A recent study from The Century Foundation, a progressive think tank, found an estimated 70,000 providers around the country could close due to the loss of ARPA funding. They say it would leave about 3.2 million kids at risk of losing care.=

"That's going to, you know, really create some hard decisions for for parents and families." explained Laura Valle-Guiterrez, a contributor to the report done by The Century Foundation.

Those types of decisions that Valle-Guiterrez alludes to, ultimately leads to the wallets of parents.

Tatiana Bailey, a local economist from Data Driven Economic Solutions, explains the dilemma of a modern family in Colorado Springs:

"The median household income in Colorado Springs is about $82,000 a year. So if you have two kids under the age of three, child care for those two kids would be roughly $40,000."

She says even with the usual subsidy of $15,000 you can get off your expenses for paying daycare -- she understands why a couple would reason with the idea of even working a job, and instead stay home to take care of their kids.

"It just doesn't work, the math doesn't work."

Denson stresses the importance of childcare services, and the anxiety it brings for all parties involved when there's not enough money to go around.

"Without child care, parents can't work. It's a critical infrastructure piece to a successful economy. Yet we invest as a country so little into it to make sure that it is sustainable."

Democrats in Congress however, are already eyeing the impact of the ARPA funds dissolving.

A bill was proposed in early September titled the "Child Care Stabilization Act" that would look to give another $16 billion in federal funding to places like Early Connections, and providers nationwide, with another lifeline to grab onto.