Minnesota's high day care costs rising hurdle for parents

ST. PAUL

Jessica Gerlach said it was difficult to find an affordable day care after a friend could no longer look after her 3-year-old son, Jeffery.

As a single mother and part-time waitress, the St. Paul woman said her options were limited.

"It's just crazy," she said. "If you have kids, you have to work. But if you can't afford day care, you can't work."

Gerlach's predicament is one many Minnesota parents find themselves in. The state ranks among the least affordable for child care, with a $9,900 annual average cost for a center-based day care, according to a recent national study.

The recession has helped lower the average cost of child care slightly, but it also has left more parents struggling to afford day care, increased the number of children receiving public assistance for child care and forced hundreds of providers to close because of low enrollment.

Gerlach eventually found a day care for $80 for 21 hours per week, but it eats up about 15 percent of her income. That, combined with her mortgage payment and food bill leaves little extra money. The next-cheapest day care she found was nearly twice as much, she said.

Families earning less than half of the state's median income are eligible for day care assistance from the Department of Human Services, but Gerlach's $24,000 annual income is just above the threshold.

"I'm a single mom, I'm a waitress and I make too much to receive assistance for day care," Gerlach said. "It's ridiculous."

Fifth, fourth least affordable

The average cost of child care at a center-based facility in Minnesota decreased about 4.5 percent between 2009 and 2010, according to the most recent report from the National Association of Child Care Resources and Referral Agencies. The annual cost for infant care dropped 5 percent to $12,900 and for a preschooler dropped 4 percent to $9,900.

The report studied only costs for the state's roughly 1,500 center-based providers and did not take into account the more than 11,000, typically less expensive licensed in-home care providers.

Despite the drop in cost, Minnesota ranks as the fifth least affordable state for prekindergarten child care, after New York, Montana, Massachusetts and Wisconsin.

A single mother making the state's median income of about $27,000 spends almost 50 percent of her income for full-time child care at a center-based facility, while a two-parent family making the state's median income of about $86,000, spends nearly 30 percent of their income for two children, according to the association's report.

Minnesota is among the most expensive for child care partly because the industry is highly regulated by the state, according to Ann McCully, executive director of Minnesota

Child Care. For example, Minnesota requires a lower ratio of staff to children than other states, which requires centers to spend more money on personnel. McCully said it can be difficult for centers to make a profit or simply break even.

Hard times in day cares, too

Since the recession hit, many child care providers have struggled to keep their businesses afloat. Last year alone, 317 child care providers -- both centers and in-home -- closed, according to Minnesota Child Care, a local branch of the national association.

As unemployment rates soared during the recession, laid-off or underemployed parents took their children out of full-time child care, sending enrollment rates plummeting.

Central Child Care in St. Paul took in just three infants at the height of the recession, down from the usual 18, said the center's director Michele Hedberg. It's taken until now to fill the slots again.

"(The recession has) been hard on parents," Hedberg said. "The staff, too."

Without the support of the church associated with her center, the day care wouldn't exist, she said.

But child care centers aren't the only ones having difficulties. In-home child care providers, which cost about $3,000 to $6,000 less per year than centers, also are struggling.

Running a day care out of her Frogtown home in St. Paul, Julie Dahl said she's down to only one child now.

After taking care of children for 26 years, she's never had as few children as in the past couple years.

Everyone has had financial difficulties or lost their jobs, Dahl said.

"I don't know if things will ever improve," Dahl said.

Now Dahl just hopes she won't lose the infant currently in her care. Her husband was laid off in February and the couple worry they might lose their house.

Child care assistance grows

During the past couple of years, many parents have come into Hedberg's office at Central Child Care crying because they had lost a job and needed to take their children out of day care.

Hedberg said she particularly remembers one woman who was sobbing because she had no family to fall back on and had lost what she thought was a secure job.

"It was pretty traumatic for her, figuring out how she was going to survive without a job," Hedberg said.

"(Parents) are doing everything they can to provide for their families," she added. "But as my folks used to say, 'There's more month than the end of the money.' "

As a result, more families have turned to state subsidies to help pay for child care. The number of children receiving this public assistance has increased 13 percent since 2006, according to the state Department of Human Services.

Parents who meet certain thresholds determined by income, number of children and the cost of care are eligible for the program. On average, families receive about $900 per month. Last year, the families of about 33,700 children in Minnesota on average received monthly subsidies.

For parents such as Nyapai Kek of St. Paul, the assistance can be a godsend.

A single mother with three children, Kek said she doesn't know what she would do without the help.

Kek, whose youngest child is 5 months old, recently found a job. But while she was unemployed and on bed rest during her pregnancy, it was helpful to be able to take her older children to day care.

Kek said she had a friend who could watch her kids but couldn't always count on her. "She has her own life," Kek said.

Without assistance, parents who feel they can't afford child care are stuck making a hard choice between quality and cost, Minnesota Child Care's McCully said. Some might be able to negotiate for cheaper rates or shorter hours with care providers, but others might turn to unlicensed care.

"That's not necessarily bad," McCully said. "You might want your child to stay with a grandparent or sister. But it's when it's not a true choice that we worry."

Resorting to whoever is available at the time can be chaotic and unhealthy for a young child, McCully said. Studies show that how children spend their prekindergarten time can be predictive of future success.

The quality of prekindergarten education can lower the probability of dropping out of school, repeating grades or needing special education, according to the National Institute for Early Education Research.

Fanniece Lucas, a single mother in St. Paul, wanted a good care provider for her almost-3-year-old daughter, but found $1,200 a month that one day care center quoted to be too expensive. That was double what Lucas spent on rent. Even with a small subsidy from the military, it was still too much.

Eventually she found Joy Academy, which can charge less because it partners with outside businesses that donate supplies. Now child care costs Lucas about one-third of her income as she attends school and works about 25 hours a week as a secretary.

"(Kids are) very expensive, but it's worth it," Lucas said. "Hearing her laugh and watching her grow -- into little people, little adults -- it's a fun process."

Distributed by MCT Information Services