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“Child care cliff” expected with September end to federal funding

A lapse in federal funding could leave nearly 85,000 California children without stable child care at the end of September. The report by The Century Project describes the situation as “the child care cliff,” and it refers to the steep drop off in federal funding that’s expected to impact more than three million children nationwide.

CCRC Vice President and Chief Strategy Officer Donna Sneeringer said early actions by Governor Newsom’s administration will likely delay the impact in California until after the 2024 presidential election. But she noted that stabilizing the sector will require continued support from state and federal government. “If not, we will likely see a devastating loss of child care supply, especially as it relates to private child care providers (private centers and family child care homes) who provide the most flexibility and support for working families,” said Sneeringer. “California will not be able to sustain or fulfill the promises of expanded access for families or meaningful implementation of the new reimbursement rate system.”


The American Rescue Plan was enacted in response to the COVID-19 pandemic and included $24 billion – $2.5 billion of which went to California – in relief funds for child care stabilization. The U.S. Department of Health and Human Services found those funds served 220,000 child care providers, spared the jobs of more than 1 million early educators, and enabled ongoing care for as many as 9.6 million children. California largely used the funding to provide cash stipends to providers, facility renovation funding, supplies, personal protective equipment, and materials for training and support. Additionally, family fees were waived and providers continued to be paid based on enrollment.

California also used the federal funds to seed a variety of ongoing initiatives such as family fee relief, reimbursement rate reform, and expanded access for families, but largely committed to utilizing state general funds. The recent Child Care Providers United agreement included stipulations that should stabilize the field over the next two years.

Emergency funding for child care offered during the pandemic had a remarkably positive impact on the lives of children, families, and child care providers. When that funding ends September 30, families may be faced with declining child care options as providers are forced to close.

Impact to families

The report projects some 70,000 child care programs across the country are likely to close. Researchers anticipate ripple effects, including parents and caregivers being forced out of work or having to cut their work hours. As a result, businesses will lose valuable employees or face disruptions related to child care instability, and state economies will lose tax revenue. “The loss in tax and business revenue will likely cost states $10.6 billion in economic activity per year,” the report states. Sneeringer expressed the importance of this funding in an article by Community Forward Redlands.

Impact to child care providers

California saw approximately a 20% decline in licensed childcare spaces between 2019 and 2021.

The child care workforce, which is among the slowest sectors to recover from the pandemic, faces the loss of another 232,000 jobs. According to the report, the number of licensed programs in Arkansas, Montana, Utah, Virginia, West Virginia, as well as Washington, D.C., could be cut by half or more. In another fourteen states, the supply of licensed programs could be reduced by one-third. Over 13,500 licensed programs in California are considered at risk, though as Sneeringer told the LA Times, state measures may delay or prevent such widespread closures.

“The primary reason early childhood educators leave their jobs is unsustainably low wages, and while service jobs in retail and the food-industry raised wages during the pandemic, child care wages have stagnated,” the report explains.

A democrat-led bill to provide $16 billion a year over the next five years has not received any support from conservatives, meaning it is likely stalled out. The authors of the report argue that America needs to adopt child care reform that makes it affordable and accessible for all families. “Just like clean water, safe food, and good public schools, high quality, affordable, and accessible child care is a national priority that benefits everyone,” the report states. “Families across all income levels share the same determination to provide the best possible foundation for their children, especially in their early years.”

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