Summary:
- The childcare business model is broken, and becoming more unaffordable for many families
- There are some areas of bipartisan consensus to help address the issue
- Long-term structural change in the industry will require more bipartisan cooperation
As North Carolina faces a possible recession, and shifts in budget priorities that will impact the amount of money the state can invest in education and social services, we have to recognize another problem that young parents are all too familiar with: the economics of child care don’t work.
The median income for a family of four in North Carolina is approximately $110,000, with a monthly pre-tax income of $9132.50. When you take anywhere from $1,000 to $3,000 per child out of that income every month, it’s a high price for the privilege of staying in the workforce.
For the families below that median income, single-parent households, and many others, the cost of childcare is almost impossible to juggle – and the costs have grown so much that child care costs more than college tuition for many middle class families.
The National Women’s Law Center has gone as far as reporting child care is unaffordable in every state, not just NC.
Why are the costs so high? Quality staff is hard to find and wages are low in the education and child care sectors. Demand for quality care is increasing in a growing state with too few available options. Because child care providers are not traditional schools, they aren’t exempted from taxes unless they’re run as non-profits, or by religious institutions.
House Bill 115, which was filed in February, would solve one of the many challenges facing child care centers, and has the potential to lower costs for working families. The legislation “provides for a total exclusion from property taxation for qualifying child care facilities that are actually and exclusively used to provide child care.”
Though the bill was filed by Democratic lawmakers, powerful Republican legislators are also aware that the child care crisis requires a whole-of-government solution. According to EdNC, Republican Sen. Jim Burgin, who represents Harnett County, “said every level of government — local, state, and federal — needs to chip in.”
Burgin also said he is meeting with community college presidents, state administrators, and county commissioners to find vacant or underused facilities that could house private child care programs and cover some facility costs. Regulations should be streamlined to remove barriers to these partnerships, he said.
“If we could deal with the property and the expenses, then I think it changes everything,” Burgin said.
Not to be outdone, North Carolina’s Council of State is also invested in the issue. Burgin has joined Democratic Lt. Governor Rachel Hunt as co-chair of Governor Josh Stein’s bipartisan Task Force on Child Care and Early Education, which was announced on March 10.
In a press release announcing the task force, Burgin reiterated his support for solutions to make child care more affordable.
“North Carolina’s strength lies in its families, and access to quality child care is crucial to their wellbeing,” said Senator Jim Burgin. “I am proud to co-chair this task force alongside Lieutenant Governor Hunt so that we can ensure North Carolina is the best state to start a family.”
An aide to Hunt said child care is the new Lt. Governor’s top policy priority, telling the Daily Tar Heel “there is currently a $5 billion disruption to the state’s economy because of child care shortages, which he said is already in a state of crisis.” (This is a particularly striking change of pace from North Carolina’s former Lt. Governor, who had some experience in child care himself.)
That economic disruption is an issue of fairness for parents in the workforce and the future success of their children. According to a 2022 report from the Center for American Progress, “Child care supports children’s health and economic outcomes, providing massive returns over time. It also acts as a family stabilizer and indirect economic driver, enabling parents to work or go to school and directly employing hundreds of thousands of providers and early childhood educators.”
Employers and government at all levels should recognize the bipartisan consensus behind solving the child care crisis. The first Trump Administration prioritized child care in its 2020 budget, and it’s clear in North Carolina government there are both Republicans and Democrats willing to cross partisan lines to address a critical issue for working families.
House Bill 115 is a good start, and a tax break that state and local governments should be able to rally behind. If that bill can pass, either as a stand-alone bill or part of the state budget, it will signal that there’s hope our state’s leaders can work together on critical kitchen table issues for North Carolina families.
If not, the economic and social consequences are clear: fewer parents in the workforce and career stagnation when they return; less spending power for young families; smaller payrolls and fewer jobs created; and worst of all, a dimmer future for North Carolina children.
