HARRISBURG — The state is providing $117 million in stimulus funding to help day cares survive pandemic closures.
A Penn State study released this week reported 200 facilities have notified the state that they won’t reopen and another 1,000 have indicated that they could shutter due to the financial strain of the pandemic.
“Pennsylvania has made significant investments to preserve our child care sector to keep providers open and available to working families, but we know that child care providers remain vulnerable to the economic impacts of the COVID-19 crisis,” said Gov. Tom Wolf. “A strong child care industry is a requirement for a healthy economy.”
The funding will help day cares as they head into the fall, but the child care industry worries that once operators burn through this round of stimulus funding there may be a cascade of child care closures, said Diane Barber, executive director of the Pennsylvania Child Care Association.
“It’s bad,” she said. “That 200 may just be the tip of the iceberg. We know most providers don’t have a lot of money in the bank.”
The Penn State study was commissioned by the Department of Human Services to help calculate how much aid the industry needed in this, the third round of stimulus aid given to day cares, Human Services Secretary Teresa Miller said in a press call with reporters. The state provided $104 million through the two earlier rounds of help.
“While I’m happy that the number isn’t larger, (200 day cares closing) is a significant loss,” Miller said.
Doug Beranzetti, executive director of SUMMIT Early Learning which operates five child care centers in the Valley, said many centers throughout the state remain closed due to COVID-19 and that will have negative repercussions.
"It's going to have a huge impact years from now" if children can't access academic, social and emotional skill-building tools.
Bertanzetti said SUMMIT child care centers have been able to use CARES Act funding to help offset losses from not being able to reopen fully at 100 percent capacity, but, he said, if the pandemic persists into next year without a vaccine it could spell trouble.
"That's an unknown," he said.
Pennsylvania has about 7,000 child care centers. About 85.5% closed their doors at least temporarily, according to surveys completed as part of the Penn State study.
Philip Sirinedes, director of the Institute for Regional and State Affairs at Penn State Harrisburg said that while they were closed, few day cares collected tuition payments, meaning they had no revenue while struggling to pay bills such as mortgage and lease payments and utility bills.
That also means that until tuition payments arrive, the centers may not have the cash to pay staff who have been called back to work when they reopen, Sirinedes said.
Barber noted the study found that among small child care centers, an alarming number of operators paid their bills while closed by adding debt to credit cards.
The Penn State survey collected responses through June 2 and the study noted that most day cares that had closed due to the pandemic had not reopened at the time they were surveyed.
Barber said even now, close to three months later, there are still about 700 day cares that haven’t reopened.
About 250 of those are school-based day care centers that are probably not going to reopen any time soon as schools shift instruction online or limit the number of people in their buildings, Barber said.
Joanne Sloneem, vice president of education at the Greater Susquehanna Valley United Way, said child care centers continue to struggle as many Valley parents continue to work from home.
"A lot of these centers are working at 50 percent to 75 percent capacity. This is definitely not a business that makes money at 100 percent capacity," she said of the hardships child care center owners face.
Adding to the financial difficulty of not collecting full tuition, centers are having to spend more money on extra staff, disinfectants and other COVID-19 related safety equipment to comply with the new regulations, Sloneem said.
"It's a huge struggle and a very trying time," she said.
Still, Sloneem said she hasn't heard of any center closing due to the pandemic. One child care center in Coal Township did close recently, but she isn't aware of the reason for the shutdown and said another center has already opened in its place.
The study put the virus price tag for the day care industry at $220 million, just by including ongoing bills, like rent and utility, during the shutdown; the cost of paying staff when the facilities reopen, but before tuition payments arrive; and the costs associated with making changes to cope with the threat of COVID-19.
The Penn State study estimated that day cares will operate at about 83% capacity. Barber said her organization’s survey of members found that most day cares are operating below that level, with an average of about 60% enrollment projected.
That means even with the state aid, it’s not clear how many will be able to stay afloat for long if they don’t have enough families paying tuition to keep up with their bills, she said.
The Daily Item writer Marcia Moore contributed to this report.