Child care workers’ wages boosted, 275 slots created by pilot program, Iowa study says

ALTOONA — Hundreds of new child care openings were created and child care workers’ wages and benefits improved under a state pilot program, a new report says.

Published on Tuesday, the report says 275 new child care slots were created in the seven communities that participated in the Childcare Solutions Funds pilot program, which was jointly funded by private donations and government matching funds.

The report was published by the Iowa-based research organization the Common Sense Institute and the Iowa Women’s Foundation, a nonprofit women’s advocacy organization that has pushed for increasing child care in the state.

Under the state’s Childcare Solutions Funds pilot program, participating communities raised private funds that were matched two-to-one by government funding. The state set aside up to $3 million in federal pandemic relief funding for the program — it wound up allocating $2.9 million. The communities privately fundraised another $1.4 million from 373 local businesses for the program, according to the Iowa Women’s Foundation.

The funds were used to attract and retain child care workers by increasing wages and improving benefits, the group said. In the seven participating communities, 223 child care workers from 105 providers were added or retained, according to the report. And the program helped created 275 additional child care slots in the seven communities.

The report said the pilot program merged public and private funding to create a sustainable funding source that allowed child care providers to make investments — like increasing workers’ wages and benefits — that might not otherwise be supported by the market.

The program attempts to address a common issue facing child care providers: how to increase the pay of child care workers without passing the cost on to families.

“We need a three-legged stool that includes parents’ tuition, public and private partnerships. So this was a great opportunity to test what a public-private partnership could do, and it performed really well,” Deann Cook, president and CEO of the Iowa Women’s Foundation, told reporters Tuesday at a conference in Altoona hosted by the foundation.

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“I think in the pilot communities the numbers are really impressive, and the report further goes on to show what it could do if we expand it,” Cook said. “So I think it is very promising.”

The pilot programs were conducted in Allamakee, Cerro Gordo, Dubuque, Hamilton, Howard, and Mitchell counties. Another program, jointly conducted in the communities of Mount Vernon and Lisbon, launched last year after a six-week fundraising effort. The money was used to pay child care employees bonuses.

While it was not included in the seven communities studied for the report, Johnson County also has a so-called “child care solutions fund” to help boost child care workers’ wages and benefits.

Program kept the doors open at one child care facility

Kristy Turner, administrator of Postville Childcare Services, said the program saved her child care facility from going out of business. Instead, the facility has expanded its number of workers and available child care slots, Turner said.

Turner said because of the pilot program, Postville Childcare Services has gone from 16 mostly part-time workers to 22 mostly full-time workers, and within the past three months has brought in eight new children and reopened a room it previously was forced to close.

“We were looking at closing our doors, but through hard work and dedication and the belief in early childhood, our community rallied together and invested in the Child Care Solutions fund, and that kept our doors open so we could continue to serve our families and children,” Turner said.

Common Sense Institute’s projections suggested an expansion of the pilot program to a statewide level would add 11,000 new child care slots, enable 5,000 more Iowans to join the workforce, create 8,000 new jobs across the state, and increase Iowa’s GDP by $13 billion.

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“Common Sense Institute’s analysis found the CSF pilot program had its intended effect,” Ben Murrey, the institute’s director of policy and research, said in a news release. “The program allowed participating communities to open more quality affordable child care slots, allowing more parents to enter the workforce. This translates to higher incomes for families and growth to Iowa's economy — a win for Iowa families, businesses, and economy.”

State funding was ‘huge’ in creating a successful program

The state’s allocation to the pilot program was a one-time expenditure from a one-time funding source: federal American Rescue Plan Act funds.

Common Sense Institute projected the costs of operating the program annually and statewide: its report projected the program would cost the state $28 million in the first year and between $28 million and $35 million annually through the first 10 years, for a total of $315 million over that first decade.

Many Iowans who spoke about the pilot program’s success at the conference said those government matching funds are critical to making the program sustainable for the long term.

Jason Passmore, executive director of Howard County Business and Tourism, said the government matching funds were critical when soliciting private donations from the community.

“The match from the state that carrot was huge,” Passmore said. “So that’s the importance of today’s forum, is to find other methods, other ways to dangle other carrots to keep that funding mechanism coming, to keep our solutions program going. Just to keep it funded.

“The public-private partnership is huge. I like that a lot.”

The 2025 session of the Iowa Legislature, when state lawmakers will craft the next state budget, begins in January.

Download: CSI_Report_IA_Childcare_Solution_Fund.pdf

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Comments: (515) 355-1300, erin.murphy@thegazette.com

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