$300 million program to support child care providers, improve access for families

(ABC 6 News) – Governor Tim Walz and Lieutenant Governor Peggy Flanagan announced that Minnesota child care providers have begun applying for monthly direct payments to stabilize their businesses, as part of a $300 million state grant program that will last through June 2023.

With funding from the American Rescue Plan and parameters established by the Minnesota Legislature, the stabilization grants will enable child care providers to boost pay and benefits for their workers as Minnesota’s economy continues to recover.

“Throughout the COVID-19 pandemic, child care providers have stepped up to ensure that Minnesota families have a safe and reliable place to send their children – despite challenges like low enrollment and higher operational costs,” said Governor Walz. “These grants will be critical in supporting our child care providers and ensuring that child care continues to be available to communities across the state.”

The Child Care Stabilization Grant program will continue through June 2023, with the grants diminishing in the program’s final year. The grants are part of a $563 million effort to bolster Minnesota’s child care market, primarily with funding from the American Rescue Plan.

Another key change starts in November, when the state will raise reimbursement rates for the Child Care Assistance Program. The program currently serves more than 30,000 children each month, supporting 15,000 low-income families to access child care while they work or go to school. Additional stimulus fund investments in Child Care Assistance totaling $55 million are estimated to reach 4,000 more children during the next three years.

The Minnesota Department of Human Services also plans to offer stabilization grants for child care providers experiencing extreme financial hardships. DHS awarded transition grants to eligible child care providers this summer and is developing a range of technical assistance and professional development opportunities for child care providers.

To be eligible for child care stabilization grants, child care programs must be licensed, certified or registered and in good standing with DHS. Eligible providers will receive an email each month with a link to a personalized application link. Child Care Aware of Minnesota is offering help with the application and payment process. Eligibility for stabilization payments is determined per state law by how many employees child care providers have, with the state paying $430 a month for the equivalent of each full-time employee. Child care programs that serve families with low incomes, including families in the state’s Child Care Assistance and Early Learning Scholarship programs, may qualify for higher amounts. Providers must use at least 70% of grant to increase pay or improve benefits for child care workers, with the rest available for costs such as personal protective equipment, rent, utilities and other expenses.

For more information about the Child Care Stabilization Grant program, visit the DHS website at mn.gov/dhs/child-care-stabilization-grants.