FRANKFORT — Child care advocates applauded elements of the Kentucky Senate’s budget, unveiled Wednesday, but said lawmakers have not gone far enough to save the struggling industry. 

The proposed child care spending is a “monumental investment,” said Sarah Vanover, a policy and research director for Kentucky Youth Advocates. 

“We appreciate the fact that this is more than what the House had delegated, that we’re moving in the right direction,” she told the Lantern. “We can build off of what is in this budget, but it’s not there yet.” 

The Senate’s budget bills cleared the Appropriations and Revenue Committee Wednesday morning and were approved 37-1 by the full Senate later in the day.

Kentucky’s child care industry — which some are working to rebrand under an “early childhood education” umbrella — is counting on a boost from the 2024 legislative session as federal COVID-19 dollars that helped stabilize the industry during the last few years are running out. This leaves many centers to cut pay for their workers, raise tuition for parents, cut services and even close. 

Without help from the General Assembly, Kentucky could lose more than a fifth of its child care providers, the Lantern has reported. 

The Kentucky Center for Economic Policy previously estimated that $300 million is needed to replace the federal aid that’s ending. The state Department for Community Based Services says the need at closer to $100 million. 

With the state help that is proposed in the House budget — a $52 million a year increase — experts estimated 16,000 kids could lose access to child care in 2024.

With the Senate’s proposal, according to Vanover, that number is 14,000. 

In his December budget proposal, Gov. Andy Beshear pitched spending $141 million over the next two years to stabilize the child care industry, as well as $172 million to begin funding universal preschool for Kentucky 4-year-olds.

What is the Senate proposing? 

Charles Aull, executive director of the Kentucky Chamber of Commerce Center for Policy and Research, said “there’s some really good progress in the Senate budget proposal.” 

“From my perspective, it looks like the Senate has worked really hard to identify … how much General Fund dollars from the state actually need to be kicked in in order to continue some of the important changes that were made to CCAP (Child Care Assistance Program) over the past couple of years,” Aull told the Lantern. 

The Senate has outlined these budget lines for child care: 

• $28 million annually – $21 million from the General Fund and $7 million in federal funds – in 2025 and 2026 for reimbursements to child care providers through the Child Care Assistance Program (CCAP). This is a decrease from what the House proposed: $40 million, and what Sen. Danny Carroll requested in his Horizons Act: $66 million, though he voted in favor of the proposal on the floor. Despite the decrease, “that piece is still much more than we’ve ever gotten,” Vanover said. 
• $14.8 million annually to provide child care for child care providers. This is “one of the great things that the Senate had that the House did not,” Vanover said. Sen. Chris McDaniel, chair of the Appropriations and Revenue Committee, said this was included because “the most effective program that we had seen and that we had heard about is the idea that if you’re a child care worker, we’re willing to pay for your child care.” 
• $10.6 million for CCAP assistance for families at 160% of the federal poverty level. This is the same as what the House proposed. 
• $2 million annually to award Innovations in Early Childhood Education Delivery Fund grants.
• $2 million annually for the Employee Child Care Assistance Partnership (ECCAP). This passed into law in 2022  and incentivizes employers to help employees pay for child care. 
• $1.5 million annually to add a six-month adjustment period for families who are no longer eligible for CCAP. During that time period, those families would receive decreased benefits. This portion, McDaniel said, is to “eliminate the benefits cliff” for families. 
• $1.3 million annually to cover the cost of background checks for new child care staff. This is a point Carroll requested in his Horizons Act. These required background checks can cost around $90 per person, Vanover said. After that expense, they may reveal the person isn’t eligible for employment. 

“(The) reimbursement rate for CCAP is probably our top priority and that’s a large amount that is still dedicated to that,” Vanover said. “So that’s a win there as far as maintaining funding.” 

It’s “hard to say” if the steps are enough to stabilize the industry this year, according to Aull. 

“CCAP is one of those things that literally allows (families) to participate in the workforce and without it … they’re going to have to choose between … ‘can I find somewhere for my child to be while I’m working?’” Aull  said. “Or they (are) just going to say ‘it’s just going to make more sense for me to sit out of the workforce until maybe the kid is … five, six years old, maybe in grade school.’” 

Brigitte Blom, the president and CEO of the Prichard Committee, said many points in the budget are “steps in the right direction.” But, she said, there is “unfinished business” for lawmakers to address.

“We seek decisive action to transform access to quality, affordable child care with at least a $150 million per year above FY 2024 levels,” Blom said in a statement. This is “essential if we are to provide a strong start for our children and support for Kentucky’s workforce.”

“We also call for the necessary funding to support high-quality teaching and broaden access to higher education, crucial elements for measurable, long-term impact,” Blom said.

What is missing in the Senate budget for child care? 

The Senate and House will come together to agree on a final version of the state budget. Vanover would like to see them maintain CCAP eligibility for families at 85% of the state median income. 

Without that step, Vanover said, “we could potentially lose a lot of working families that need child care assistance.” 

She would also like to see more dollars dedicated to CCAP based on enrollment instead of attendance. 

“CCAP, in the past, has paid only when children are there,” she said. “Which is not how schools work. You still have to pay teachers, you still have building expenses, those kinds of things.” 

The budget could still change, and the numbers could continue to fluctuate until it’s finalized.  

“As (the budget) currently exists on the Senate side, it’s a good step forward,” Aull said. “This is arguably probably the largest investment in child care that we’ve seen in terms of general fund dollars. And I think that’s something that’s worth celebrating and worth noting.”