Commentary, COVID-19, NC Budget and Tax Center

NC early childcare system is left behind by inadequate COVID relief

As North Carolina parents juggle working, supervising remote learning and providing child care for their youngest kidssurvey data from August shows that our state’s childcare infrastructure needs more support. 

Early childhood educators have provided crucial supports for essential workers during the COVID-19 pandemic. As more people return to work, we’ll need a strong childcare system for a successful economic recovery.  

While many programs are re-opening, those that are currently operating reported serving about 30% fewer children than before the pandemic. Persistent low enrollment threatens the long-term viability of our childcare system. 

Family childcare homes are now serving about 85% of the children who were attending before the pandemic, and enrollment has been fairly steady since May. Childcare centers had steep declines in enrollment, but attendance in open centers has increased since May and now stands at 59%  

 

Early childhood educators depend on parent fees to cover the costs of running a program, which in turn enables them to earn a living and support their own families. This is why declines in enrollment are such a problem. 

For family childcare homes, even relatively small declines in enrollment make it hard to stay open, as they tend to run on razor-thin margins. Even before the pandemic, early childhood educators made less than $11 per hour on average in North Carolina, frequently with no benefits. Low wages make it challenging for program directors to retain staff, an issue that is heightened by the pandemic.  

At a virtual town hall hosted in August by the North Carolina chapter of the National Domestic Workers Alliance and Moms Rising, early childhood educators spoke passionately about their commitment to the youngest North Carolinians and their struggles to stay afloat during COVID-19. 

In the words of Darlene Brannon, a childcare center director with 15 years of experience:  

It was a real honor to come into this field  [but] we’re are not getting paid to do all that we’re doing. A lot of our parents have not been able to come back to the childcare center, because they’re not working yet  Even the parents that are still coming, that are essential workers  they’re not making enough money to pay the parent fee as well as pay for food for their children. 

Darlene’s experience shines a light on the need to build a childcare system that works for parents and educators. Instead, chronic underinvestment coupled with a lack of meaningful COVID response creates false choices between directing assistance to parents of young children or to educators.  

HB 1105, the Coronavirus Relief Act 3.0 passed by the NC General Assembly on Sept. 4, didn’t go nearly far enough to sustain and strengthen our childcare system. The bill provided $35 million for operating grants to early childcare programs, and while this funding is desperately needed, it is a one-time investment unlikely to cover more than one to two months of bonus and retention payments.  

The bill offers $8 million in additional childcare assistance payments for parents, but this is far below what is needed. The money would serve only about 1,300 kids for one year, leaving too many behind.

According to the NC Early Education Coalition, at least 14,000 eligible families are on the waitlist for childcare support The NC Division of Child Development and Early Education had been covering co-pays for parents receiving childcare subsidies during the pandemic, but without any additional funds, that support has now ended.  

In addition, the funding is is limited to support for remote learning opportunities, which creates unnecessary hurdles for families seeking assistance. 

Instead of providing more support to low-income families, HB 1105 allocated $440 million to the poorly designed Extra Credit Grant Program, providing one-time direct cash payments of up to just $335 to North Carolina parents.

These grants are not targeted to the parents who need them most. Because the grants will rely primarily on tax filings to distribute paymentsthey may even exclude many of the state’s lowest-income families who do not earn enough to file taxes but who do contribute through sales and other taxes. 

Furthermore, our current childcare subsidy system does not cover the actual cost of providing quality care. Our state needs to adjust reimbursement rates for the programs that provide care to families receiving subsidies in order to ensure they are adequate, equitable, and offer early childcare educators a living wage. 

North Carolina needs long-term public investment in early childcare. It is necessary to support our recovery from COVID-19, to ensure that programs are open as parents return to work, and to continue for a stronger state.

Childcare providers see the value of their work every day, and comprehensive public funding would show that North Carolina recognizes their value as well, and the value of the children in their care and the families that rely on them. As Stephanie Shell, a family childcare home provider, said at last month’s town hall: 

I ask that our legislators think aboutthe studies that show the first five years of a child’s life are the most critical of their development, and that we are the people helping with those first five years. We would like to see that reflected in theirdecisionmaking in terms of funding and support for us through this crisis.

 

Logan Harris is a Senior Policy Analyst with the Budget & Tax Center, a project of the NC Justice Center.

Commentary, COVID-19, NC Budget and Tax Center

U.S. Senate COVID-19 relief proposal falls far short of need across N.C.

(Photo: Wikimedia Commons)

It is foolhardy to look at the current state of hardship in our country and fail to offer a genuine response. Yet the U.S. Senate did just that yesterday with its failure to pass adequate COVID-19 relief that matches the need facing families, communities, and state and local governments across the country.

North Carolinians can’t afford half measures from Congress as more than a million households are at risk of eviction and more than half a million remain out of work. People — Republicans and Democrats, Black, brown and white — support aid that would keep neighbors from being pushed into poverty and ensure that state and local governments can sustain services and the jobs of so many North Carolinians.

So long as our leaders delay their response or offer half-measures such as Presidential Executive Orders and paltry Senate bills, the response to the pandemic will be drawn out and recovery delayed.

The fundamental reality that policymakers have failed to fully grasp is that helping people helps the economy. Allowing hardship and uncertainty to persist is not only cruel but bad economics.

People and the economy need the strong foundation that direct aid and public institutions can uniquely provide as we all await the containment and mitigation of the public health crisis.

We may have gotten used to politics as usual, but the situation facing North Carolinians is anything but. As this once in a generation crisis continues, Republicans and Democrats must work together to make sure people can keep a roof over their head, put food on the table, and support their children, families and neighbors.

We demand a public response that is worthy of the lives unnecessarily lost in this pandemic, and the lives devastated by the economic fallout. Future generations will not forgive us for anything less.

Commentary, NC Budget and Tax Center, Trump Administration

Federal eviction moratorium merely kicks the can down the road

Last week, the Centers for Disease Control and Prevention announced that it would place a “temporary halt in residential evictions to prevent the further spread of COVID-19” through Dec. 31, 2020.

This action, although needed, leaves gaping holes in the Trump administration’s response to the pre-existing and current pandemic-impacted housing crisis.

People need a home to stay at home, but an estimated 30 million to 40 million people in the U.S. were at risk of eviction prior to the moratorium announcement.

The CDC order took effect last Friday, Sept. 4, and might bring much-needed relief to renters. Unfortunately, onerous eligibility requirements are likely to cause many people to fall through the gaps. According to Legal Aid of North Carolina (LANC), tenants will have to submit a signed declaration to their landlord and bring that signed declaration to court if they have an eviction hearing.

In addition, the order does not apply to foreclosures and, importantly, it will merely postpone evictions, not prevent them.

(Note: LANC also advises that tenants can still appeal if they are ordered to be evicted. Tenants with questions about eligibility and in need of assistance should call LANC at 1-866-219-5262. Tenants should also call 211 to see if there is any help available to them with their back rent.)

Without the rental and utility assistance people need to pay their bills, the federal eviction moratorium is merely further delaying the financial cliff renters will face once it expires. Come Jan. 1, 2021, rent will be due, and now additional months of back rent will also be due, as well.

People who have been most impacted by the pandemic are familiar with what happens when poorly designed policies fail to accomplish their objectives. Housing vouchers are a clear example of how well-intended policy can fall short of meeting its objective. Anyone who has ever tried to use a housing voucher will tell you just how difficult it is to find a landlord who will take them.

In short, the CDC’s federal eviction moratorium will not solve the persistent lack of available and affordable housing, especially for people with extremely low incomes. To ensure that people can stay in their homes, policymakers at every level of government must provide more than public statements. Dedicated resources are needed to help people pay rent who do not have adequate income due to the pandemic and administrative capacity must be built to help direct dollars to families that need them most. People also need transparent information and legal support to exercise their rights.

Housing ought to be a human right, especially during a public health and economic crisis. A federal moratorium on evictions is essentially an unfunded mandate that can only be effective if supported with public resources and additional capacity at every level of government. The National Low Income Housing Coalition will host a tweetstorm today at 1pm ET. Follow #GetBackToWork for more information.

Leila Pedersen is a policy analyst at the N.C. Budget & Tax Center.

Commentary, NC Budget and Tax Center

General Assembly chooses politics over people in COVID relief bill

Image: AdobeStock

The North Carolina General Assembly gave final approval to its plan for spending additional Coronavirus Relief Funds yesterday; the bill has been sent to the Governor.  

The proposal is another brick in the wall that legislative leaders are building between the people of this state and the promise of a way out of this immediate crisis and to a better life. That wall of flawed policy choices, misdirected dollars and inadequate responses has been built over a decade and will continue to block our state from a full and just recovery.  

Even the most simple, basic, and obvious funding decisions to help millions of people in North Carolina survive the COVID-19 crisis are ignored in the legislation.

Years of underinvestment left us ill-prepared to respond adequately and in a timely way to the pandemic and the job losses that have followed. It didn’t have to be that way nor did the suffering have to be so acute and so inequitable. 

We would be much better position to weather this current crisis if our state had committed, at any point over the last economic expansion, to affordable rental housing and utilities, a strong unemployment insurance system, the expansion of Medicaid,  a robust safety net to address poverty, workplace protections and living wages.

Instead, legislative leaders chose tax cuts for big companies and the rich. 

Once again, yesterday, they displayed a misunderstanding of the realities that people face. They made clear just how out of touch they are with the hardships families are grappling with today. People don’t need money to have a nice dinner out and a babysitter; they need a quality and affordable childcare option so that they can go to work. They need access to reliable broadband and technology and investments in public schools that educate their children. They need help making their rent, paying utility bills and putting food on the table.   

The state’s response is made worse when there is a lack of input from people directly affected by the policy choices — and no chance for any but a few lawmakers to meaningfully contribute to the legislative outcome. It is made worse when the priorities for our states recovery are decided in less than 48 hours.  

The Extra Credit Program provides a case in point. It would send a total of $440 million in checks to families with children  because there is no political will to deploy these resources toward a systemic response that could sustain support in the long-term.

Such an approach flies in the face of what we know works for securing well-being and an economic recovery for all. While that $440 million is less likely to reach those with very low incomes, those struggling the most in this public health and economic crisis, $124 million will go to taxpayers in the top 20%.

Such a policy design in a pandemic would only be pursued by legislative leaders bent on ignoring the realities of the majority of our state’s population who have incomes that aren’t keeping up with the costs of basics.   

Here is what’s at stake today in North Carolina: More than 1 million North Carolinians are at risk of eviction. Nearly 800,000 North Carolinians lack access to affordable health care in a pandemic. More than 1.8 million North Carolinians are behind on utility payments.  More than 1 million people have filed for unemployment.  Our state is failing to comply with the constitutional obligation to provide a sound, basic education to every one of the 1.5 million children enrolled in public schools. 

The weak and inadequate response in HB 1105 means that so many North Carolinians and their families who are facing tremendous uncertainty and hardship will continue to struggle without the help that our state should be providing. Putting people first in policy making is what lawmakers are elected to do; unfortunately, yesterday, they chose politics over people.  

Alexandra Sirota is the Director of the N.C. Budget & Tax Center.

Commentary, NC Budget and Tax Center

$124 million of Extra Credit Grant Program would go to the top 20%

Image: Adobe Stock

Senate leader Phil Berger admitted yesterday that $335 isn’t enough to pay off a mortgage but could pay for a babysitter and a dinner out for parents.

His statement failed to recognize the reality of most parents in this state. When parents don’t have enough money to pay for rent, utilities or child care, they definitely don’t have enough money for a babysitter or a dinner out – even with an extra $335.

The proposed Extra Credit Grant Program within House Bill 1105 would use over $440 million of the state’s remaining coronavirus relief funds – most of the $552 million that remains in reserves.

Although direct cash payments are needed to help families make ends meet, this poorly designed program fails to target these grants to people who need them most. The primary mechanism for sending payments will be tax filings and, as North Carolinians learned after the Spring Economic Impact Payment rollout, more than 460,000 North Carolinians do not earn enough to file income taxes, even though they pay taxes in other ways. This means that this grant program would exclude many families who are most in need of cash support.

According to analysis by the Institute on Taxation and Economic Policy, about $124 million of these grants will go to households in the top 20% of income earners. Sending $335 to household that make an average of $240,000 a year is a missed opportunity to invest this money elsewhere. Especially when many students still lack broadband access and parents are struggling to pay for the basics.

As the House convenes this morning, there is an opportunity to recognize that $124 million, or 26%, of the Extra Credit Grant Program would go to wealthy households and would be better invested elsewhere.

During debate on the House floor, legislative sponsors of the bill suggested that Extra Credit payments would phase out for high-income taxpayers, in accordance with the federal child tax credit design. However, the bill language does not reference federal or state statute language on income eligibility to ensure that payments will be phased out for high-income households.