HHS Releases Supplemental Child Care Funding to Support COVID-19 Response

Key Takeaways

In at least eight states, counties play a significant role in administering the federal child care assistance program—the Child Care and Development Block Grant (CCDBG), providing child care subsidies to low income residents and often providing local funding to help build the quality and supply of child care.

But in the wake of safer-at-home and/or business closure policies to slow the spread of COVID-19, maintaining access to child care for essential workers has emerged as a major challenge for county and state governments alike. While some child care centers are struggling to keep their doors open as business plummets, others are facing increased expenses associated with expanding enrollment to children of emergency responders while reducing classroom sizes and heightening public health and sanitation standards. At the same time, counties are facing revenue shortfalls, hindering our ability to supplement publicly funded child care with local dollars.

To address these pressures, Congress provided $3.5 billion in supplemental funding for CCDBG in the Coronavirus Aid, Relief and Economic Security Act (CARES Act; PL 116-136), which was enacted on March 27. The supplemental funding, which the U.S. Department of Health and Human Services (HHS) Administration for Children and Families (ACF) released to states, tribes and territories on April 29, must be used for activities authorized under the CCDBG Act that prevent, prepare for and respond to COVID-19. Importantly, Child Care and Development Fund lead agencies may use these new dollars flexibly, including to provide child care assistance to health care sector employees, emergency responders, sanitation workers, and other workers deemed essential during the response to the coronavirus, without regard to the income eligibility requirements.

For counties administering CCDBG, the CARES Act supplemental funding is a crucial support that will help us provide child care services to first responders and essential workers and extend relief to child care businesses. However, the supplemental funding is likely only a down payment on what the child care sector requires to weather the economic crisis. A recent survey from the Bipartisan Policy Center suggests that more than 60 percent of licensed child care providers have already shut down because of the crisis, while the Center on Law and Social Policy projects that the child care industry needs $9.6 billion a month in federal assistance to stay afloat.

Even as states and localities contemplate reopening, child care providers will face new challenges and expenses associated with social distancing and sanitation measures. And counties currently supplementing child care supply and quality with local dollars or other flexible federal funding streams, such as the Temporary Assistance for Needy Families program or the Social Services Block Grant, may need to divert that support as the economic crisis deepens.

As Congress negotiates upcoming COVID-19 relief packages, NACo will continue to advocate for direct, flexible funding for county governments as well as increased support for CCDBG and the child care sector.