COVID-19 worsened an existing crisis for child care in Oklahoma

On March 6, 2020, Oklahoma reported its first confirmed case of COVID-19 and declared a statewide emergency 10 days later. As the pandemic now enters its third year, Oklahomans continue grappling with the impact of lives lost and the immense disruptions it has created. OK Policy will be reflecting on the COVID-19 pandemic’s impacts and challenges. Our hope is that this will highlight opportunities for collaborative decision-making, future improvements, and prosperity for all Oklahomans.

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Countless Oklahomans rely on access to high-quality, affordable child care in order to work. However, the COVID-19 pandemic has had a devastating effect on our state’s child care industry, impacting parents’ ability to work and businesses’ ability to recruit and retain a reliable workforce. Due to underfunding, Oklahoma’s child care system for providers and families was in crisis long before the first COVID-19 case at a child care center was reported on March 18, 2020. Since then, countless providers across the state have closed their doors, and the ones that remain are spending 47 percent more to provide care. While the state acted swiftly to provide some guidance and support, a larger long-term investment in the child care industry is still desperately needed. 

OKDHS moved quickly to provide relief to providers and families 

The Oklahoma Department of Human Services (OKDHS) administers the state’s child care subsidy program, which helps cover the cost of child care for low-income working families. During the COVID-19 pandemic, OKDHS moved quickly to ensure that child care centers and homes could maintain operations during the tumultuous times. The first phase of provider support came March 25, 2020, and allowed providers additional subsidy absent days and certain rate increases in order to allow facilities to remain open despite fluctuating attendance. By the end of June 2020, OKDHS provided several supports to families to ensure that they could continue accessing child care even as job closures, furloughs, and illnesses were affecting family income. OKDHS temporarily waived copayments for all families who were receiving subsidies, as well as offered 60 days of subsidized child care to Oklahomans who were job searching due to loss of employment during the COVID-19 crisis. 

Due to an infusion of federal Coronavirus Aid, Relief, and Economic Security (CARES) Act dollars, most of the state’s 2,300 child care centers were awarded one-time payments on Sept. 15, 2020, to support the industry’s delivery of safe, essential services. The passage of the American Rescue Plan Act (ARPA) gave Oklahoma $363 million to allocate as grants to licensed child care programs. These grants can be used for staff wages and benefits, rent and utility assistance, cleaning and sanitation services, professional development, children’s mental health resources, and more. While grants are still being distributed, this one-time funding must be spent by Sept. 2023. 

More needs to be done to help child care providers and families 

These program updates and opportunities due to federal relief were much needed, but more needs to be done to ensure that our state’s children can access high-quality care. While the subsidy rate has temporarily increased for providers, Oklahoma was already far behind leading states with a reimbursement rate that only covers 60.3 percent of the true cost of providing care, forcing providers to absorb additional costs. Additionally, low-income families receiving child care subsidies may still pay up to 23 percent of the true cost of care, costing families hundreds each month. 

Oklahoma should look to leaders in this space like South Dakota, which has reimbursement rates that cover 97.6 percent of the true cost of care and has no out-of-pocket child care costs for low-income families earning $27,750 for a family of four. By reimbursing providers that accept child care subsidy closer to the actual cost of care, we’d ensure better economic stability for providers, as well as encourage more providers to accept child care subsidy. This would create equal access for low-income families to access the child care market. 

Oklahoma should also move from attendance-based subsidy to enrollment-based subsidy permanently. Fixed costs such as rent, utilities, wages, and benefits continue to accumulate despite the program closures and low attendance plaguing providers for the past two years. Allowing subsidy reimbursement based on enrollment and not attendance would allow providers to improve financial stability while also increasing the quality of care to our children due to the increase in funds. Enrollment-based subsidy is how we fund every other education program in this state, and moving child care subsidy to this permanently would only cost 4.2 percent more. At the very least, Oklahoma should look to this solution for infant care due to the high cost and low ratios associated with this care. 

Oklahoma needs child care to keep our state running and to thrive in the future 

In Oklahoma, two-thirds of children birth to five years old have all available caregivers in the workforce, meaning the work of our state’s early educators has never been more important. The first five years of a child’s life are critical for brain development and science confirms that children need early learning opportunities that can enrich and support their development. However, with child care businesses becoming increasingly more expensive to maintain and state-support becoming increasingly weakened, child care facilities across the state have been forced to close. This has left 55 percent of Oklahomans, including 68 percent of rural Oklahomans, in a child care desert, meaning there are either no providers within their ZIP code or too few slots. With working parents out of options, many have been forced to abandon their careers or turn to a patchwork of care by friends and family members. This has the potential to deprive not only our state’s workforce, but also young children of high-quality early education that is foundational for future academic achievement, lifelong health, and future economic productivity.

Oklahoma needs to act to prevent this crisis from worsening 

Oklahoma has failed to treat child care like a vital public good by neglecting to provide adequate support for both parents and providers. Legislation like House Bill 1613, which would have reimbursed child care facilities based partially on enrollment, and Senate Bills 1849 and 1502, which would have provided a tax credit for child care expenses, have already failed this session. A chronic lack of support and funding has led to a shortage of child care options across the state. With 1 in 3 child care facilities closing from 2015-2020,¹ Oklahoma can no longer afford to ignore the economic reality that support for child care providers and parents is needed now. A two-step approach that addresses the needs of both families seeking care and the early educators that provide it would best serve our state. Increasing the reimbursement rate to providers, moving to enrollment-based subsidy from attendance-based subsidy, and continuing to decrease co-pays for families would have tremendous impacts on overall child well-being in the state. This investment would not only help more young parents enter the workforce and more young children access high-quality care but improve the job quality for the 13,640 early childhood workers that we entrust our youngest children with every day.

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¹ The number of closed facilities was drawn from comparing provided data from the Oklahoma Child Care Resource and Referral Association for 2015 and 2020.