NH’s already vulnerable childcare industry overwhelmed by Covid-19

‘Biological hurricane’ has reduced centers to 30% of capacity
John Hamilton

A childcare center is ‘a tough business to run in the good times,’ according to John Hamilton of the Community Loan Fund.

Child care is a vital part of the state’s economic engine, but the damage Covid-19 is having on that industry is still unfolding.

John Hamilton of the New Hampshire Community Loan Fund – whose programs include financial and other assistance for childcare providers around the state – called the pandemic a “biological hurricane” that has reduced child care in the state to 30 percent of its capacity.

“It’s a tough business to run in the good times,” said Hamilton, the organization’s vice president of economic opportunity. “We are trying to mobilize resources so we can stabilize child care and early-learning centers. The key right now is to meet them where they are at – really guide them through the restarting of their programs and business with a path forward.”

The organization Early Learning NH – a nonprofit that raises awareness about the early childhood systems and is a member organization for childcare providers – made a presentation on the industry in May to the Legislative Advisory Committee for the Governor’s Office for Emergency Relief and Recovery. It reported there was a capacity of 46,023 available childcare slots in February and just 4,875 children in attendance in April. The state’s childcare industry allows working parents to generate $4.4 billion of state gross domestic product in fixed 2000 dollars. The childcare industry contributes approximately $2.5 billion to personal income in New Hampshire each year, according to Early Learning NH.

Early Learning also reported the industry’s economic impact is 7.1% of state GDP, while direct spending from travel and tourism in New Hampshire accounts for 7.6% of state GDP.

“There are lots of ways to frame it,” said Jackie Cowell, Early Learning’s executive director. “It is preparing our future workforce. New Hampshire is not going to thrive without a vibrant and strong childcare system.”

‘More and more reopening’

There is $20 million in federal Covid-19 relief funding allocated by the state to child care, with an additional $5 million held back for future needs, to be administered through the New Hampshire Department of Health and Human Services, said Cowell.

Katherine Easterly Martey Portrait

Kay Easterly Martey of the Community Development Finance Authority says child care ‘is paramount to reopening our economy.’

Childcare centers had been required to apply to be emergency care providers in order to operate during the statewide shutdown, but new guidance was later issued for providers to reopen and accept all children – not just those of essential workers.

“More and more are reopening,” Cowell said. “So for context, prior to the pandemic there were 788 licensed childcare programs opened in New Hampshire. Then there are about 100 license-exempt (those caring for three or fewer non-relatives) businesses. I have heard there are about 400 that have plans to open.”

Cowell and others fear the loss of any of those providers.

“One of our biggest worries prior to Covid-19 was that child care was at a premium. It was hard to find and hard to afford,” she said. “If we lose these small businesses, what does that mean? What does that mean for parents who want to return to the workforce?”

In addition, the question of the pay of childcare workers has also been in the spotlight. Their median wage in New Hampshire is $12.12 an hour, according to the U.S. Bureau of Labor Statistics.

The Children’s Center of the Upper Valley has remained open during the pandemic as an emergency childcare center. As one of the larger centers in the area, it has a license for 95 children but lost 30 kids the first week of the stay-at-home order, said Executive Director Jennifer Hosmer.

Four of her 19 employees chose to stay at home, and that helped Hosmer manage expenses. The state provided the center with protective gear and cleaning supplies, and it received assistance from the Couch Family Foundation.

“We applied for the PPP program and were able to get that in the first round, which was extremely helpful, “ Hosmer said. “The state gives us hazard pay – $5 an hour for each hour worked. We give (employees) the $5 we are reimbursed, and we matched that $5 an hour. We want to keep our employees because we know they can make more on unemployment than they can working here. We have done that to keep them here, otherwise we would have had to close.”

Kay Easterly Martey, executive director of the Community Development Finance Authority, which provides financial support to nonprofits, communities, businesses and childcare facilities, agreed that worker pay should be increased, but acknowledged the challenges in making that happen. She said many families that need child care are in a lower-income bracket. Additionally, many childcare providers are based in homes and often not able to access the same kind of resources available to center-based providers.

For Martey, that means public and private entities need to continue to work together to provide resources. “I really believe child care is paramount to reopening our economy,” she said.

Cowell agreed.

“It would be better if this (crisis) really shines a spotlight that these are really important jobs, and we need to invest in them differently,” Cowell said. “Families of all income levels need this service. What we can do is invest wisely so it isn’t a low-paying job, and it’s there when industry needs it.”

New guidelines

With new guidelines in place, childcare facilities are able to accept all children with limitations. Centers are limited to 10 people in a room, which typically means two adults and eight children. The guidelines were changed to allow more than one of those groups of the room is big enough.

Chstiane Casserly

New guidelines and staff limitations will mean the Rochester Child Care Center, which can have up to 150 children, is reopening with about 30, says Executive Director Christiane Casserly. (Foster’s Daily Democrat photo)

Childcare providers pushed back against the initial guidance for reopening from the Governor’s Economic Re-Opening Task Force. Now, face coverings are recommended but not required for childcare providers and staff. Also, while children must be cared for in groups no larger than 10, the facilities are allowed to divide a larger room to accommodate additional groups so long as the room has enough square footage.

“We don’t want childcare providers to have to remove kids from the class or have to shut down,” D.J. Bettencourt, chair of the task force, said during a recent hearing.

Liz Collins, director at Above and Beyond Child Care in Merrimack, said her enrollment dropped to 12 kids for several weeks while operating as an emergency childcare center and thanks to a PPP loan. Now, it is slowly opening back up to all of its families.

“We normally have 50 to 60 kids. We aren’t full, but we can now be open to all of the children we have enrolled,” she said, adding the new guidelines shouldn’t pose much of an issue in terms of space.

“We always run our classrooms to be smaller in general,” Collins said. “We have seven classrooms. Normally, we don’t fill our rooms up much over 10 anyway.”

Meals, however, will be more challenging, since the guidelines require kids to be spaced out. That could be an even bigger issue if those guidelines remain when they are at full capacity and during the school year.

Collins said families were charged 25% of their tuition in order to retain a space, and only a few families aren’t coming back. The center had gone down to four employees, but Collins said she expects the rest to come back by June 15.

At the Rochester Child Care Center, Executive Director Christiane Casserly is grateful to be able to start the reopening process, despite the challenges posed by state guidelines.

“We’ve been closed since March 20. We are now working on reopening for June 1,” she said, adding that the center applied for PPP aid and received it. “So now we are calling staff back.”

She said that, because of the guidelines’ 10-person limit, “we are opening slowly.” She added that she won’t be opening a toddler room right away due to the new guidelines around social distancing and feeding. “I don’t see how that is workable.”

The Rochester center can have up to 150 children, but is reopening with about 30.

“I’ve found lots of the staff is not ready to come back. Some employees have medical issues. Some staff live with older parents or have schoolchildren still at home – all kinds of situations. It’s been a little rough,” she said.

Casserly is also concerned about whether she will have many children in her separate school-age summer camp, which typically has 120 children in attendance.

“I’m not sure if we’re going to have any of that because the school has to decide if we can use their building,” she said.

Overlooked economic contribution

The Community Loan Fund’s Julie McConnell said there’s a need for immediate funding that can help providers that are reopening get things like industry-specific training and technical assistance.

“We cannot simply give them a loan and expect that to be sufficient,” she said. “What they need most is grants.”

The Community Loan Fund has lent more than $8 million to providers since 1995, and has created or preserved nearly 4,300 childcare spaces. The loans help nonprofit, for-profit and family providers purchase, build, expand or renovate facilities and programs.

The Community Loan Fund’s Hamilton said he and his colleagues have reached out to their investors to boost donations that will help providers serving low-income families.

“It’s easy to overlook child care’s contribution as an economic development tool,” he said. “The Federal Reserve of Minneapolis said a dollar investment in early learning and child care sees a return of 13 % on the investment. It also has a real impact on their earning throughout their life.”

The CDFA, which administers state and federal funds, also invests in childcare and early-learning centers. Over the past five years, the agency has invested $8.35 million in childcare facilities and services across the state.

“This is a very fragile industry,” said the CDFA’s Martey. “There was more demand than there was capacity even prior to the crisis. This has exacerbated it. They are in a vulnerable cash position.”

This article is being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.

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