PIERRE, S.D. (KELO) — More than 600 state-registered and licensed child care providers have started or completed the application process for the first window of $100 million in federal aid. 

Gov. Kristi Noem (R-S.D.) announced during her December budget address South Dakota’s Department of Social Services would oversee the use of $100 million in federal money from the American Rescue Plan Act to stabilize and support a quality child care industry. Starting Dec. 14, licensed providers could start applying for the first window which closed on Jan. 14. 

Laurie Gill, Cabinet Secretary for the South Dakota Department of Social Services, told lawmakers on the Joint Appropriations Committee Thursday of the nearly 800 eligible child care providers, more than 600 had applied or started the application process. 

Gill told lawmakers the grants are being distributed right now and a third-party vendor is being used to help get the dollars out. 

Gill said some of the federal aid could reimburse three months of operating expenses for some licensed child care providers, but there were caps depending on the child care type. A cap of $15,000 for family day care, $30,000 for group family day care and $27,000 for before or after child care. Child care centers, depending on size, were capped from $60,000 or $300,000.   

Page 2 of DSS Child Care presentation
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For licensed day cares, DSS reported the state has 372 family child care homes, 227 daycare centers, 145 before and after school centers, 40 informal in-home providers and 87 relative providers. 

Lawmakers asked DSS about tracking unlicensed daycares in the state and about how much child care capacity the state needs.

DSS Deputy Secretary Brenda Tidball-Zeltinger said DSS doesn’t track capacity along with unlicensed day care providers. 

In December, Janessa Bixel with the South Dakota Association for the Education of Young Children, told KELOLAND News one older study suggested South Dakota has upwards to 2,000 unregistered child care providers across the state. 

A study of the child care landscape in Sioux Falls by Augustana Research Institute showed there were 11,368 children under the age of six in Sioux Falls with working parents. And the study found there were 9,723 child care slots. 

The Minneapolis Federal Reserve District which includes South Dakota, says that there are two children for every licensed child care slot. 

Gill said a statewide market study is being considered to show the day care needs of the state. Gill said the more data DSS has to make informed decisions will be important.

Rep. Linda Duba (D-Sioux Falls) asked what are the incentives to move more unlicensed day cares to licensed day cares. 

Tidball-Zeltinger said licensed daycare requirements are federal regulations. She cited staffing ratios and space needed per child, plus fire safety requirements. She said DSS does not require a fee to become licensed.

Rep. Haugaard worried federal aid will fund ‘retirement’ 

Gill told lawmakers the COVID-19 pandemic has put pressure on workforce and wages. She said child care needs are found in urban and rural areas alike. 

When breaking down all the one-time federal money the state has received for child care, DSS reports $126.9 million, which includes $26 million from the Coronavirus Response and Relief Supplemental Appropriations.

Gill said of the specific $100 million, $91 million is being paid to providers in grants. That $91 million is broken into two groups – $61 million for stabilization funding and $30 million for startup funding. 

She said the $61 million is required to meet specific operating and other COVID-related expenses, while the $30 million offers more flexibility for startup costs, daycare enhancements, more efficient operations and new equipment. 

Rep. Steve Haugaard (R-Sioux Falls) said if $100 million was used by the roughly 800 licensed day cares, it’d come out to $100,000 per provider. Haugaard, who running for the Republican nomination for governor, specifically asked if child care providers would use the money for personal retirement funds. He also wanted to know how the money would be tracked and audited. 

Tidball-Zeltinger said eventually all the payments will be posted on open.sd.gov. 

Tidball-Zeltinger also said DSS will speak with daycare facilities that don’t apply for funding and find out why they might not apply. 

Gill emphasized DSS is not creating any new programs or divisions, but said the 5-year strategic plan involves improving child care access, advancing quality, improving affordability, investing in workforce, finding system supports and investing in education and communication. 

Rep. Sydney Davis (R-Burbank) spoke with the committee, sharing her personal examples with two kids. She mentioned how critical daycare affiliation with school is for her and said she’s heard many stories of child care providers burning out.  

“I think that’s one area that nobody really touches on,” Davis told KELOLAND News. Davis said around Vermillion, there’s a real lack of capacity and a lack of people who run day cares. 

Rep. Davis said some of the comments made by lawmakers during Thursday’s meeting “seemed a little disconnected.” 

“Seek out the providers that are actually doing this,” Davis said. “That’s what I did and she didn’t say she was going to use it for retirement or to line her pocketbooks.” 

Davis said a provider she spoke to would use the grant money to repair playground equipment and purchase new furniture and update damages.  

“There’s a lot of moving parts to this and the needs range from before-and-after school programs, summer programs, in-home daycares to large child care centers in urban and rural areas,” Davis said. “The needs are going to be different and it’s going to be hard to address that in a way that is accommodating.”