116 3rd St SE
Cedar Rapids, Iowa 52401
Directing more federal pandemic money to addressing a critical shortage of child care, Gov. Kim Reynolds announced Wednesday a $25 million grant program encouraging employers in Iowa to offer more child care for their workers.
Most of the money — $20 million — will go toward infrastructure investments to build or expand child care capacity. The other $5 million will be used to support deals between employers and child care centers to expand available slots.
“Potential projects could include the creation and development of an on-site child care center or a partnership with an existing child care center to create new child care slots paid for by a local employer,” the state said in its announcement.
The Governor’s Office said Reynolds has directed state agencies to implement many of the recommendations of a child care task force she created, spending over $500 million of state and federal funds.
In January, she announced that $37 million would fuel the addition of nearly 5,200 child care spots — 700 of them in Eastern Iowa — through Iowa’s Child Care Grants Project. That money — $27 million in federal funds to the Iowa Department of Human Services, $6.7 million in American Rescue Plan Act funds and $3 million from the Iowa Legislature — was to pay for construction and renovations and maintenance to centers.
The state said it would begin to accept applications for the new grant program from June 17 to July 19 at IowaGrants.gov.
“I’ve heard from both parents and employers that child care is a barrier to work in our state,” Reynolds, who briefly announced the program at a conference in Coralville, said in a statement. “One of the top recommendations from my Child Care Task Force was to incentivize employer investment in child care. This program will do just that by encouraging employers to help deliver child care solutions to their employees, thereby bolstering opportunities for recruitment and retention of workers.”
Nearly 1 in 4 Iowans live in a “child care desert,” including nearly 35 percent of rural Iowans, where they can’t find openings, according to Reynolds’ task force. The average monthly cost of child care in Iowa - $1,031 -- is more than the cost of housing for the average Iowa family, the report said.
Marion Economic Development Corporation President Nick Glew, who was at a Coralville conference where Reynolds announced the new grants, said the program would help.
“This was a critical missing piece to have a creative way for companies to invest in the solution,” Glew said. “I hope it's an incentive for companies struggling in child care to be able to be at the table for the solution.”
Glew said MEDCO has talked with companies about the state of child care and there is not one silver bullet in solving the issue, but Reynolds’ announcement should make an impact.
Cedar Rapids Metro Economic Alliance Public Policy Strategist Barbra Solberg said that even before the COVID-19 pandemic, the organization heard from employers about the struggles they face to place and keep employees.
“Those struggles have grown and as we’ve worked with them on various solutions, including ones related to child care challenges,” Solberg said. “Child care solutions should be bipartisan and we welcome this continuation of public-private partnerships that support access to quality and affordable childcare, including business investments through incentives.”
Democrats, who in the minority in the Iowa Legislature, have said the state needs to put more funding into its assistance program for low-income parents needing help to pay for child care, which would increase the reimbursement rate to the child care providers.
Wednesday, state Sen. Zach Wahls, the Democratic leader from Coralville, called the Republican governor a “phony” for taking credit for using federal stimulus money that was signed into law by Democratic President Joe Biden.
“The truth is that President Biden and Congresswoman (Cindy) Axne are trying to solve a problem that Kim Reynolds is responsible for: Iowa's worst-in-the-nation child care crisis,” Wahls said in a statement. “Iowa Senate Democrats have a plan that would lower costs and make child care more accessible. We're just waiting on Reynolds and Iowa legislative Republicans to work with us."
Gage Miskimen and Erin Murphy of The Gazette contributed.