Child care shortages in New Hampshire could continue – or worsen – as federal pandemic aid dries up, according to a new analysis from the New Hampshire Fiscal Policy Institute.
Since 2020, the state has received about $146 million in one-time federal funds to help child care providers weather the COVID-19 pandemic and build capacity for the future. The last of those funds must be spent this year.
Without new sources of public funding, the report warns child care may remain out of reach for many families.
“Without additional consistent, long-term investments in child care infrastructure, the same challenges will likely continue to impact the child care market, New Hampshire’s workforce, and the overall Granite State economy,” the report says.
Workforce challenges have limited the availability of child care spots in New Hampshire, and at the same time, families are facing high costs. In 2022, the average yearly cost for a family with an infant and a four-year-old in center-based care was around $28,000, according to the institute’s report.
Those child care constraints have kept thousands of Granite Staters out of the workforce, costing the state in terms of lost wages and tax revenue, the report says.
Most of the federal aid over the past four years went to keeping child care providers afloat through the pandemic. The remaining $30 million, which must be used by Sept. 30, is going to workforce programs, business development and other longer-term investments.
The state announced the launch of one of those initiatives Monday – a two-month program called Child Care Accelerate that aims to help child care providers improve their efficiency and financial capacity.
Separately, state lawmakers included a one-time appropriation of $15 million for the child care workforce in the budget they passed last summer. Those funds will go out to providers this year. The budget also included funding to expand eligibility for child care scholarships for low and moderate-income households.
Nicole Heller, a senior policy analyst with the New Hampshire Fiscal Policy Institute, said that shows state policymakers recognize the issue’s importance. But she said more sustained public funding may be needed.
She said there are various creative ways New Hampshire could steer more money into child care. One would be to incorporate support for workers’ child care needs into infrastructure projects and other federally funded initiatives.
“It might be contributing funding to a couple child care providers in the affected area where construction is taking place, so that those providers are able to accommodate the increase in need,” she said.
States can also prioritize child care as part of other workforce development programs. California, for instance, has a grant program aimed at diversifying the building trades, and child care is an allowable use for those funds.
Kentucky, meanwhile, helps child care workers pay for their own child care, regardless of their income, Heller said.
As the lack of child care workers is one of the biggest constraints in New Hampshire right now, Heller said continuing to direct state funding to developing the workforce could pay off.
“If we can add one child care worker to the workforce that has the potential to have helped seven families,” she said, referring to the typical staff to child ratio. “So investing in that workforce may be a way to create more providers and more slots.”
