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The Child Care Cliff: What Arizona Needs to Know

A new report is sounding the alarm that many families may be facing the loss of child care services in the next year. The report titled "The Child Care Cliff: What's at Stake for Families, Businesses, and State Economies" highlights the impending drop-off in federal child care investment starting September 30, 2023, and the dire consequences it will have if no action is taken. The analysis by The Century Foundation examines the potential impact of the funding cutoff on children, families, and state economies across all fifty states and the District of Columbia.

The report predicts that more than 70,000 child care programs, about one-third of those supported by the American Rescue Plan (ARP) stabilization funding, will likely close nationwide, resulting in approximately 3.2 million children losing their child care spots. In Arizona alone, 1,149 child care programs are projected to close, leading to 99,691 children losing access to child care.

The loss of child care programs will have a significant economic impact, with states estimated to lose $10.6 billion in economic activity annually. Millions of parents will be affected, potentially leaving the workforce or reducing their work hours, resulting in a loss of $9 billion in annual earnings for families. The child care workforce, which has been slow to recover from the pandemic, is also expected to lose 232,000 jobs.

The report emphasizes the urgent need for immediate funding and comprehensive long-term solutions at the federal level to provide safe, nurturing, and affordable child care options for every family. It highlights the high cost of child care, which exceeds $10,000 per year for one child on average and can reach as high as $15,000 to $20,000 in some states. The low wages in the child care sector make it increasingly challenging to attract and retain qualified and passionate early educators.

The COVID-19 pandemic exacerbated the existing challenges in the child care sector, leading to the closure of an estimated 20,000 child care programs in the first two years of the pandemic. The ARP stabilization funds provided temporary relief, but their expiration in September 2023 will create a funding cliff, risking further contraction of the child care sector.

The report underscores the far-reaching implications of the child care cliff, including the impact on children's well-being, family economic security, racial and gender equity, and local and state economies. It calls for increased investment in child care and early learning to ensure affordable and high-quality options for families and support parents' workforce participation.

Read full report here.

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