Child care in the Granite State: end of one-time funding approaching – New Hampshire Business Review

First published in NH Business Review, April 12, 2024

Limited access to affordable child care creates significant challenges for New Hampshire’s families, economy, and state efforts to support a robust workforce. While Granite State families requiring child care experienced challenges with availability, affordability and quality of care before 2020, the COVID-19 pandemic exacerbated these challenges and highlighted the severity of barriers to child care.

To address these challenges before, during and after the pandemic, approximately $555 million in federal and state funding has been deployed by New Hampshire to support the child care sector since state fiscal year (SFY) 2016. Of those funds, 26% are one-time federal relief dollars that have either already expired or will expire by Sept. 30. Some of these federal funds were administered as one-time, direct emergency funds to child care providers, while others were divided into different grant programs made available to providers during the peak of the pandemic.

American Rescue Plan Act-Discretionary (ARPA-D) funds, however, were allocated to multiple contracted projects with the intention of strengthening the long-term stability of New Hampshire’s child care infrastructure, including projects related to child care workforce recruitment and retention programs, child care business and facilities improvements, and increasing the number of family child care providers. After ARPA-D funding expires in September, the public finances dedicated to supporting New Hampshire’s child care sector will be reduced to levels similar to those that preceded 2020.

The SFYs 2024-2025 state budget provided one-time state general funds for the Child Care Work Force Grant program and expanded income eligibility for the New Hampshire Child Care Scholarship Program, which were significant investments. However, Granite State families and the child care sector would likely benefit from consistent, prioritized state funding. Available data indicates that for New England families, particularly those with low incomes, accessing and affording child care often requires caring for children at home or relying on a mix of child care arrangements. Additionally, households with more limited economic resources may pay larger portions of their income toward child care, especially people of color and single-parent households, all of whom are disproportionately more likely to experience poverty in New Hampshire.

Increased investment could help New Hampshire providers of all sizes function at their full licensed capacities, which would create more child care availability. Additional available child care slots allow more parents to join the labor force or to shift from part-time to full-time work, potentially enhancing family income and savings while growing the state’s workforce and economy overall.

Nicole Heller is a senior policy analyst with the New Hampshire Fiscal Policy Institute. The NHFPI Policy Memo is a partnership of the NH Fiscal Policy Institute and NH Business Review.