SIOUX FALLS, S.D. (KELO) – Workforce, access and affordability – those are the three target areas the Department of Social Services hopes to address in updating the child care system in South Dakota. 

DSS provided an update to lawmakers on the Joint Committee on Appropriations about child care and many other issues the large state agency handles on Tuesday morning. 

DSS Deputy Secretary Brenda Tidball-Zeltinger said DSS has nearly 1,600 employees in 43 different communities across the state, making it one of the largest service providers in state government.  

Tidball-Zeltinger said DSS has $38 million in discretionary funding from the American Rescue Plan Act that must be spent by September 2024. 

“We have not spent any of those funds,” Tidball-Zeltinger said about the $38 million. 

In the past year, DSS has spent $61 million in stabilization grants to licensed child care providers in the state.

She said DSS held nine listening sessions with child care providers across the state to come up with some ideas. There were 153 participants with 21 different counties represented throughout the listening sessions. A DSS survey was filled out by 36 different respondents that represented 20 different counties. 

“A lot of good input from the community members,” Alex Mayer, DSS Chief of Children and Families, told lawmakers. “We really saw workforce, access and affordability rise to the top in the discussions we had.” 

DSS child care listening session slide.

Mayer said most of the one-time money from the $38 million will be focused in those three areas. 

Rep. Linda Duba (D-Sioux Falls) asked about the gaps between licensed and unlicensed child care providers. 

Tidball-Zeltinger said there will be a focus to do a comprehensive recruitment from DSS to get unlicensed child care providers to become licensed. She said there’ll be a study with how much workforce the state needs to meet capacity needs in different areas of the state. 

“We need to know the size of the problem,” Duba said. “We’ve never established what the gap is for the number of children who require child care and the number of available spaces including licensed and unlicensed.”  

Tidball-Zeltinger said that data should be part of the studies DSS is working with external partners to gather. 

“We don’t have a state-delivery system for child care. These are private entities,” Rep. Tony Venhuizen (R-Sioux Falls) said. “I see this as a very challenging area.” 

Venhuizen asked what helping affordability in child care would look like. 

Tidball-Zeltinger said public-private partnerships could make child care more affordable and there are some existing examples in the state. She said DSS is focused on finding ways to cut regulatory-costs in South Dakota. 

“We have some traction started in that area,” Tidball-Zeltinger said. “We’ll have a comprehensive package providing regulatory relief for providers.” 

Venhuizen said it’s a tough challenge that more workforce or more access wouldn’t solve the affordability of child care. 

DSS child care spending strategy slide.

Sen. Bryan Breitling (R-Miller) asked what is the difference between licensed and registered child care providers. 

Tidball-Zeltinger said licensed child care providers would be state-regulated, while registered child care providers are other child care providers that are not regulated by the state like many in-home daycares.  

Breitling said there’ll be many child care providers that will register with DSS and then unregister based on the needs. Tidball-Zeltinger said some age-ratios with child care providers will be explored and how the regulations work. 

Breitling also asked about federal requirements for child care providers as well as South Dakota specific requirements. Tidball-Zeltinger said there are some federal requirements for block grant funding and she said the state had some requirements that went beyond what the federal requirements were.

“Generally speaking, we are going to move away from state-specific requirements,” Tidball-Zeltinger said. “Liability insurance is one example, that’s not a federal requirement but a state requirement and that’s one example we’d continue.” 

She said all the regulations regard balancing safety for child care providers. 

“Standards are important,” Tidball-Zeltinger said. “As a parent, that was a key thing for me when I was looking for child care for my child.” 

She said there’s a state-specific requirement that child care providers couldn’t use canned food and DSS is looking to remove barriers that don’t add safety value. 

Sen. Breitling said the state ultimately would like to encourage unlicensed child care providers to become registered. 

Sen. Jim Bolin (R-Canton) asked at what point does DSS get involved with child care providers. Tidball-Zeltinger said any provider caring for 12 or more children is required by the state to become registered. 

Bolin had Tidball-Zeltinger clarify that any in-home daycare caring for 11 children or less would not be subject to state licensing or regulation. 

Tidball-Zeltinger said DSS would take public comment in March and April and bring a rules review committee with a package in June. Changes wouldn’t go into effect until 20 days after a rules review meeting in June. 

Child support and foster families

Mayer told lawmakers DSS helps more than 53,000 families who need help to collect child support which includes adults with legal guardianship or custody of minor children. DSS distributed $117.2 million in child support money for more than 53,000 cases in 2022. 

Mayer said the numbers in 2022 are close to the average the state has seen. 

Sen. Bolin asked how rates for child support are set. Mayer said the rate is determined through a variety of factors but mostly based on state law passed last year. 

For child protection services, DSS said its main goal is reunification and 64% of children were reunited within 12 months of removal in 2022.  Mayer said Gov. Kristi Noem continues to raise awareness about the need for more foster families. 

Last year, DSS recruited 300 new foster families and there are 865 licensed foster families. Mayer said some foster families do leave the program and DSS tracks the reasons why. 

Rep. Duba wanted to know the net amount of foster families and highlighted how important retention is in the foster family program. 

Mayer said the average reimbursement rate for each child in a foster family program was $622 per month. There has been an 82% increase in the number of children placed for adoption over the past 10 years from 147 in 2012 to 267 in 2022. 

Rep. Duba said DSS sent 129 children out-of-state for psychiatric residential treatment facilities and asked how the state could save money by finding solutions in South Dakota. 

DSS ‘in transition’ 

Tidball-Zeltinger said DSS is in a period of transition as the new leader of DSS, Matt Althoff, officially starts next week. Althoff, who has served as chancellor for the Catholic diocese of eastern South Dakota for 13 years, was appointed Gov. Kristi Noem to replace Laurie Gill in December. 

Rep. Erin Healy (D-Sioux Falls) told South Dakota Public Broadcasting she has concerns about Althoff and how he handled a sexual harassment allegation exposed in a KELOLAND News investigation by Angela Kennecke in 2017