Early Education

When the pandemic hit, child care was one of the first sectors in crisis. But action in the form of federal aid and swift state program implementation prevented widespread program closures. The nearly $600 million Utah received in federal child care funds helped stabilize the historically struggling sector and defied national trends by expanding the number of child care slots available. This substantial funding is estimated to have supported child care services for over 85,200 children in Utah.

As federal COVID-era funds begin to wind down, child care providers and the parents they serve are looking to elected officials to ensure that the sector doesn’t immediately fall back into total crisis. Child Care Stabilization Grants, a key program of the funding, are currently playing a vital role in enabling child care providers to stay open, keep costs down for families, and raise wages in an industry that has been long plagued by inadequate compensation. Unfortunately, the lack of commitment from federal, state, or local governments to sustain these successful programs with new funding means most COVID-era programs will end, ultimately leaving parents with ballooning child care costs, and abandoning child care providers to navigate a broken system.

Starting in October, Utah families will begin to experience the impact of the child care funding cliff.

What change is happening this fall?

As federal funding runs out, Utah’s Office of Child Care (OCC) will reduce monthly Child Care Stabilization grant amounts by 75% in October. By June 2024, the grants will end entirely.

How will this change impact Utah providers and families?

Providers are preparing now for the impending grant reductions. For example, PC Tots, a program in Park City, already announced tuition increases due to a funding gap of $620,000 from the loss of ARPA money. One family reported a $1,000 monthly tuition increase for their two children enrolled in PC Tots, highlighting the financial strain this poses for many families.

The wind-down and ultimate end of stabilization grants also presents additional concerns for providers. When surveyed, 36.7% providers anticipate being unable to sustain wage increases for their child care staff or, in some cases, will have to cut wages. Without intervention, this will likely to lead to higher turnover rates among child care staff, resulting in more disruptions in care for families and a further reduction in available child care slots, statewide, due to understaffing.

How will the end of stabilization grants impact Utah's child care sector?

A recent report from The Century Foundation identified Utah as one of six states where half or more of all licensed child care programs statewide could close, without new funding to replace the federal support.

Their analysis estimates that in Utah:

• 35,614 children will lose access to child care.
• 663 child care programs will be forced to close their doors.
• Parents will experience a collective loss of $101 million in earnings.
• 1,304 child care jobs will be lost.

Deep, structural problems within the child care system existed well before the COVID pandemic; those problems will persist and worsen when COVID-era funding runs out. With 77% of Utahns living in child care deserts, parents already allocating 14-25% of their income on care, and providers making less than animal caretakers, we can’t afford to reduce our investment in child care. The child care market faces new challenges too. The current robust job market has made it increasingly difficult for child care providers to compete for good employees. And inflation has caused the cost of normal expenses to skyrocket for families. 

As we look towards the fall, parents and providers should prepare for these difficulties. But also, state and local policymakers need to pay attention and ask what they can do to mitigate a new child care crisis. 

This blog post is part of a series of blog posts examining Utah's child care funding cliff. You can find the other posts here:

• Utah's Child Care Crisis is About to Hit a Whole New Level
• How Much Will Each Utah County Soon Lose in Child Care Funding?
• What Happened with Child Care During the Legislative Session?

To learn more about our initiative to invest in child care, go to UtahCareforKids.org. 

We know that Utah’s child care crisis is bad, and is going to get worse. New data helps illustrate exactly how bad the situation is, in each county across the state. 

Next week Voices for Utah Children will release a report titled, “Mapping Care for Kids: A County-Level Look at Utah’s Crisis in Licensed Child Care.” The report includes more detailed county-level analysis and data highlighting the inaccessibility of care and financial challenges faced by families and child care professionals. In addition, the report includes policy recommendations for Utah leaders to help resolve this crisis. 

The full report will be available the week of October 23rd, but as a teaser, this blog highlights some key findings from the report.

There is insufficient licensed child care in Utah to meet the needs of working families.

Licensed child care program capacity is only sufficient to serve about 36% of all children under six whose parents are working. Parents face shortages in every county statewide, with rural families struggling most.

The high cost of child care makes it even less accessible to low- and middle-income families, and rural families struggle most.

The average annual cost of care for two children under the age of six (one infant/toddler, one preschool-aged child) for a Utah family costs about 17% of a 4-person family’s income. Cost varies little between rural and urban counties, but on average household median incomes are lower in rural areas. In Grand County, with the state’s lowest median annual income at $42,654, the cost of care for a family of four would comprise about 41% of a family’s income.

Child care providers receive insufficient compensation, and have few incentives to stay in the field.

Child care providers typically earn low wages and very limited benefits. The median hourly wage for child care professionals in Utah is just $12.87 per hour ($26,770/year), less than they could make as professional dog walkers. The poverty rate among child care providers in Utah is 23.1%, more than 8 times higher than that of K-8 teachers. 

With substantial public investment, Utah’s licensed child care capacity has grown significantly since the start of the COVID-19 pandemic.

Thanks to federal funding streams totaling nearly $600 million, licensed child care capacity in Utah has grown by approximately 31% since March 2020. This growth is due primarily to child care stabilization grants made directly to licensed child care providers; those grants recently were reduced by 75%. Utah has been identified as one of six states that could see half or more of all licensed child care programs statewide close with the end of the stabilization grants.

Licensed child care is insufficient in every county in Utah, though the level of unmet need varies from place to place.

How does child care access and affordability compare in each county?

Our full report, “Mapping Care for Kids: A County-Level Look at Utah’s Crisis in Licensed Child Care” will be released the week of October 23rd. For questions about the report, this blog, or sources and methodology, please contact Jenna Williams at . For more information on efforts to improve Utah’s child care system or learn about the child care advocacy network, visit utahchildren.org/issues/early-childhood-education and utahcareforkids.org.

As many Utahns experienced firsthand during the pandemic, a generous child tax credit (CTC) can make a world of difference for families raising young children. During this challenging time, the CTC was temporarily expanded and made refundable, granting families $300 per month per child under six and $250 per child aged six to seventeen – providing significant tax relief for working families. This expansion had a far-reaching impact, reducing child poverty to its lowest recorded level in 2021, dropping by 46% from 9.7% in 2020 to 5.2% in 2021. Unfortunately, a year after the expansion ended, child poverty returned to 12.4%. In Utah, the federal CTC expansion helped lift 32,000 children from poverty.

In 2023, Utah became the 13th state to introduce its very own child tax credit, thanks to the leadership of Representative Susan Pulsipher. Like the federal child tax credit, a state-level child tax credit is intended to help families with the costs of raising children. 

As Utah’s legislators prepare for the 2024 legislative session, they should consider meaningful ways to expand Utah’s child tax credit to ensure it provides real support for families.

How it Works

Utah’s narrowly tailored Child Tax Credit allows some families to claim up to an additional $1,000 per child each year. Whether a parent stays home or both parents work, this tax credit can provide much-needed financial support.

Who is Eligible

• This $1,000 tax credit is for children who are ages 1-3 on the last day of the claimant’s taxable year.

• There are household income requirements. Families with an income of $54,000 for a couple or $43,000 for a family with a single parent (also called Head of Household) can claim the credit.

• If a family makes more than a certain amount of money, they can still claim this tax credit, but it is phased out based on household income. 

It's important to note that Utah's CTC is non-refundable. It can only be used to help reduce the amount of income taxes you owe but Utah’s CTC doesn’t help any families whose income tax burden is zero.  [For more information on refundability, go here.]

Who it Helps

Utah's CTC won't take effect until families file their 2024 taxes in 2025. According to an analysis from the Institute on Taxation and Economic Policy (ITEP):

• 1.4% of households in Utah will benefit from the state CTC.
• Among those eligible, the average annual tax savings will be around $400.
• 4.3% of children will benefit from the CTC. 
• No family will receive the full $1,000 per child. 

Looking Ahead

Utah’s narrowly-tailored CTC doesn’t serve enough families. With its restrictions, the current state CTC doesn’t really help low- and middle-income households, especially those with more children. It also leaves out families with newborns and kids aged four to eighteen. Many more families could be helped by expanding our state child tax credit. 

A bold state child tax credit gives Utah parents opportunities and choices to set their children up for future success. Children need parents to give them a solid start in life - and parents need the support of their community to be there for their kids. Expanding our state CTC gives critical community support to young parents raising children in Utah.  

With the governor working on budget recommendations and legislators preparing for the upcoming legislative session, it's time to advocate early for child tax credit expansion and the inclusion of public investment in early education in Utah's state budget priorities! 

Write to your elected officials here

Edit: ITEP Analysis numbers were updated on November 21, 2023, to use estimations based on 2024 incomes. 

During the pandemic, the child care sector was decimated. Nationally, 16,000 childcare programs permanently closed and 100,000 workers left the industry entirely. But even before the pandemic began, Utah only had enough licensed child care to meet about 35% of our state child care needs.

Nationally, more than 3 million child care spots were saved by American Rescue Plan Funding. And Utah actually bucked the trend of closing child care programs. Thanks to federal intervention, Utah has more licensed child care slots available to families than before the pandemic began in 2020. This was thanks to federal funding that infused desperately needed investment into the long-ignored sector. Utah received close to $600 million in extra federal funding, starting in 2020, during the COVID pandemic to help keep child care businesses open so parents could continue to work.

This money will soon be completely spent. By June 2024, Utah will run out of money for almost all of the COVID-era support for our child care system. The following chart details the annual funding lost per county.

The majority of these funds went to Child Care Stabilization Grants, dispersed by the Utah Office of Child Care. These have been one of the most important factors in allowing Utah’s child care sector to survive, and even expand. Since last January, the Office of Child Care has distributed $189 million of ARPA and CRRSA funds directly to child care programs statewide to ensure that they can continue to operate despite workforce shortages and rising costs of food and materials. The size of the grants are based on the licensed capacity of the eligible program.

More than 1,000 licensed and exempt programs are currently receiving monthly stability grants. Since the beginning of this program, around 1,500 programs have benefitted, serving more than 80,000 Utah children.

With these grants, child care programs have been able to do several critical things:

• Hire enough staff to ensure that their full program capacity can be utilized;
• Raise the wages of at least half of their workers to $15/hr, so they have even a slim chance of competing with fast food establishments and retail chains;
• Keep tuition costs down for families that are also struggling with inflation;
• Pay for critical facility maintenance needs that have been unmet previously due to cost.

The other major program that sustained Utah’s child care sector was the Youth and Early Care Workforce Bonus, dispersed by the Utah Office of Child Care. Utah joined dozens of other states in using federal child care stabilization funding to pay child care workers a bonus of $2,000 per individual. This was meant to acknowledge the work and sacrifices of child care workers - most of whom remained working throughout the pandemic - as well as incentivize their continued participation in the field.

Before the pandemic, Utah’s median hourly wage for child care educators was $10.47, on average less than a dog walker. $2,000 represents as much as 10% of the average child care worker’s annual income, making the bonus incredibly impactful for providers and their families. 9,368 early care and education professionals received this bonus.

The funding above shows the combined funding amounts lost per county due to emergency funding expiration. But it is a floor, not a maximum. The totals do not take into account funding used for:

• Co-pay Coverage: Cover co-pays for families that use child care subsidies (ranges between $19-$807 per family): $18,181,881
• Licensing-related Fees Coverage: Cover the costs to eliminate barriers to licensure: $1,200,000
• Regional Child Care Development Grants: Grants for regional Care about Child Care agencies to expand child care access and improve care: $2,003,244
• Training and Education: Numerous professional development, continuing education, and training scholarships: $5,734,424

This over $572,000,000 of federal funding will soon end, destabilizing the child care sector. To read about the impacts, see our blog post: Utah's Child Care Crisis is About to Hit a Whole New Level.

To see the breakdown of child care funds per county, see the full excel file here. To request a city or town breakdown, please contact .

To learn more about our campaign to invest in child care, go to UtahCareforKids.org.