RAPID CITY, S.D. (KELO) — Change is needed for child care in South Dakota. 

A Rapid City economic development leader, a Rapid City child care provider and a national organization discussed a new report highlighting some of the problems in South Dakota’s child care industry. 

The 8-page report, attached in the link below, concludes “the current child care system does not meet the needs of South Dakota families or employers.” The report was compiled by the national, bipartisan organization Council for a Strong America. 

Pointing out the lack of availability and lack of licensed and registered child care providers per child, the report says South Dakota is losing an estimated $146 million in annual costs for a lack of reliable child care for children up to age 3. It says employers feel the affects of insufficient child care with reductions in revenue and increased hiring costs.

“The business leaders of ReadyNation South Dakota call on state and local policymakers to support families’ access to affordable, high-quality infant-and-toddler care,” the final page of the report states. “Businesses can play a role as well, through on-site child care, funding for employees or to child care providers, and advocating for sound child care policies.”

Sandra Bishop, the Chief Research Officer for the report, said access, affordability and quality are all challenges South Dakota’s child care industry is facing and her report dealt with 2019 numbers. 

“It’s likely the pandemic has increased these child care costs,” Bishop said. 

Bishop said the state and the child care industry would benefit from a statewide study on child care.

“There is a whole universe of child care that we don’t know about in South Dakota,” Bishop said.  

Elevate Rapid City President & CEO Tom Johnson said the Black Hills sees roughly eight to nine people move to the area each day. He said growth is a good thing but it’s been a challenge. 

“The ones that are hurt the most are the kids and our workers with our kids,” Johnson said. 

Johnson said current average pay for a child care worker is $12.68 an hour.

“That is lower than fast food,” Johnson said. “This isn’t even a political issue. Businesses just need workers.” 

Johnson said businesses will continue to get involved with solving the child care issues. He noted bigger companies in Rapid City, like Black Hills Energy and Monument Health, offer child care facilities within the company. 

Rapid City YMCA Early Learning Director Nicole Weiss said there’s about 375 children currently enrolled in her programs. Weiss said they take 10 to 20 calls a day from parents looking for child care. For her program, she said there’s 413 kids on the waiting list and some have been waiting two years but still want to wait. 

“There’s a huge need for more assistance from the state government and federal government,” Weiss said. “The pandemic has exposed the vulnerability of child care. We need to make a commitment as a state to support that need.” 

Weiss said her organization has 20 full-time positions open. She said she’s only worked in the non-profit realm of child care but she also doesn’t believe child care providers can make money when taking care of kids under the age of 3.

“Overall, no it is not a profitable business,” Weiss said.

Both Johnson and Weiss said they’ve heard similar issues throughout South Dakota. She said people need to look at the people working in child care and value them. 

The child care crisis in South Dakota has started to become more well-documented. This report is the second child care study put together in the past 12 months. In September, a study commissioned by the Sioux Falls Childcare Collaborative and completed as a Beacom Research Fellows Report from the Augustana Research Institute concluded: “to address this gap in the childcare system, parents and providers need to be supported more financially.” 

The report also comes as the first part of $100 million of the federal American Rescue Plan Act is being sent to child care facilities in the state. Lawmakers will continue to debate how to spend the $100 million, which the Department of Social Services advised to  divide up into roughly $60 million in “stabilization grants” and $40 million in more flexible grants for startup costs, daycare enhancements, more efficient operations and new equipment.

Some lawmakers questioned how the money would be used with one even suggesting the money would only be funding retirement funds for current child care providers. Lawmakers would also like child care providers that aren’t registered with the state and ones that are unlicensed to also receive some of the aid. 

The question about how much child care capacity the state needs was discussed, but with so many unregistered child care providers, there’s not enough data to know what is needed.

DSS reported the state has roughly 800 registered child cares, broken down into 372 family child care homes, 227 day care centers, 145 before and after school centers, 40 informal in-home providers and 87 relative providers. 

The Council for a Strong America report says “28 percent of South Dakota’s child care providers are licensed or registered with the state, so the quality of care received by many children is unknown.” 

Kayla Klein, a lobbyist for the South Dakota Association for the Education of Young Children and Early Learner S.D. said the only way child care providers can make a profit in the current system is by taking 3-5-year–olds only because you can have a higher ratio. 

Two child care providers in Sioux Falls spoke about the difficulty of providing child care services. Child care providers need to pay competitive wage to attract and retain valuable employees but that comes at a high premium for parents.