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Connecticut Child Care Businesses to Receive Nearly $276 Million in Federal Relief Funding

  • White House outlines plan to provide $39 billion in American Rescue Plan funding to support child care providers
  • Funding will help child care businesses to meet expenses while also enabling states to provide subsidies and other efforts to support access to care
  • Connecticut slated to receive nearly $276 million

Summary by Dirk Langeveld

The White House has announced a plan to release $39 billion in funds approved under the American Rescue Plan to help support early childhood educators and family child care providers. The money will offer direct support to struggling child care businesses while also supporting efforts by states, territories, and tribal governments to expand access to care.

The funding is being disbursed in two funds. A child care stabilization fund of $24 billion will help providers meet expenses such as rent or mortgage payments, utilities, insurance, maintaining or improving facilities, paying down debt, meeting higher costs caused by COVID-19 safety protocols such as purchasing personal protective equipment or improving ventilation, and maintaining payroll or hiring new workers. Another $15 billion will support state, territorial, and tribal government efforts to make child care more affordable for families, increase access to care, increase compensation for early childhood workers, or otherwise meet child care needs unique to their local populace.

Connecticut will receive $169.88 million in child care stabilization funding and $106 million in state funding.

The Biden administration says that while gains made by women in the labor force helped drive 91 percent of income gains in the middle class over the past 40 years, approximately 2 million women have left the labor force due to COVID-19. These departures are often related to child care necessities, and it is anticipated that they will lead to a greater gender earnings gap in the coming years.

The White House also highlighted challenges faced by child care businesses due to lower enrollment and higher expenses, including taking on debt, cutting staff, or tapping personal funds to stay afloat. The administration says the vast majority of child care providers are small businesses, and are often owned by women and people of color.

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