State governments are investing in child care to recover pandemic losses

State governments are directing tens of billions of dollars to child care businesses in what experts say is an unparalleled investment in salvaging an industry that was devastated by the pandemic.

The money is flowing through stabilization grants, funded by the latest round of federal coronavirus relief approved by Congress last year. All but four states and two territories have set up grant programs for those businesses, grants that child care providers can use to pay for anything from the rent on their facilities to the wages their workers take home.

“A phenomenal, unprecedented amount of money has been granted to child care in the three stimulus packages that were passed since COVID started,” said Cindy Lehnhoff, director of the National Child Care Association and a 40-year veteran of the industry. “Our federal legislators recognized that the economy doesn’t work without child care. They recognized that child care is essential. We’re the essential workforce that allows all other workforces to go to work.”

The first round of coronavirus relief funding directed $13.5 billon to child care programs. The third round, the American Rescue Plan, directed another $39 billion to those providers, an investment orders of magnitude above what Congress has allocated for the industry in the past. ...