SIOUX FALLS, S.D. (KELO) — Kayla Klein remembers paying child care staff $7.25 an hour.
After graduating college in 2010, Klein served as the Executive Director for Northern Hills Alliance for Children, a non-profit child care center in Deadwood.
“I was constantly frustrated,” Klein said. “I was embarrassed by the amount I was paying my staff. It wasn’t even a living wage. My parents (of kids receiving care) couldn’t afford the cost of care. The amount we brought in from parents wasn’t enough to cover the cost of paying our staff.”
That’s why Klein signed up to become a registered lobbyist to advocate for child care providers across the state. Serving as a lobbyist for the South Dakota Association for the Education of Young Children and Early Learner S.D. Klein wants to be involved in more discussions regarding child care, including how the $100 million from American Rescue Plan should be used to help child care providers in South Dakota.
“We have never had a lobbyist that represents early learners in South Dakota,” Klein said.
The child care crisis in South Dakota has become well documented. 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.”
Gov. Kristi Noem (R-S.D.) highlighted the $100 million for child care in her December budget address, but people involved in the industry spoke about how the influx of one-time federal money wouldn’t be enough to fix the broken system.
Klein said she’s talked about child care options for banks, mining companies and economic development offices that are paying child care bills for employees to keep employees working.
“The business field gets that this isn’t a normal, typical business,” Klein said.
“You are putting these expenses on the backs of parents. Almost every other state provides support other than South Dakota.”
Klein said as the system is set up in South Dakota right now, the only way child care providers can make a profit is by taking 3-5-year–olds only because you can have a higher ratio.
“Infants and toddlers are just more expensive to care for,” Klein said. “But they need the care as equally as preschoolers. You can make ‘the profit’ on preschoolers because you can have a higher ratio which means you have more income coming in.”
That’s why, Klein said if the state ended up helping support child care, it would be important to make sure funding came in a mixed delivery system.
“There are a lot of legislators that are really supportive and they know that child care is an issue and they want to help,” Klein said. “But there’s some that don’t quite get it and maybe they don’t want to hear the truth of it unfortunately.”
Sen. Jessica Castleberry (R-Rapid City) owns Little Nest Preschool and Little Nest Day Care. She said she believes child care can be a profitable business and there are ways to make it more profitable.
“One of the biggest issues that we’ve been facing is with receiving payments and one pain point is through the Child Care Assistance program,” Castleberry said. “What would be really beneficial is if the Child Care Assistance program was more streamlined so approvals happened more quickly.”
Castleberry said many families, especially ones with the most need and lowest income, rely on Child Care Assistance which is run by the state but uses federal funding. She said those payment processes are delayed by an average of four weeks.
Licensed and unlicensed child care providers
Part of the delay in getting the federal funds distributed to child care providers has been lawmakers’ concerns about the money going to registered and licensed child care providers only.
The Department of Social Services is in charge of rolling out the $100 million in child care-specific federal aid, but local lawmakers would like unlicensed day cares to also receive some of the aid.
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.
Data from Early Learner South Dakota shows the total number of estimated providers declined by 16% including a 30% drop in registered providers from 2012 to 2018. All while capacity has remained at about 30,000 slots.
Both Castleberry and Klein said people in the industry have been trying to track unregistered day cares.
Klein said more child care providers should become registered with the state because that makes them eligible for more financial aid and resources.
“It’s a very simple process,” Klein said. “I think sometimes the process can be intimidating, but now we see the incentives.”
A 2019 study suggested there could be up to 2,000 unlicensed and unregistered daycares in South Dakota. That’s because the state allows for an in-home child care provider to have up to 12 children without registering with the state.
Castleberry said registered day cares are meeting a basic level of quality and safety.
“Anything over 12 children has to go into that licensure area. That is a little harder to obtain but there are resources to help that as well,” Castleberry said.
Castleberry said lawmakers should make some of the federal money available to unregistered day cares on the condition that they become registered.
“Taking another look at the specific systems and processes with child care,” Castleberry said. “Streamlining systems and taking a look at ratios could be beneficial.”
Klein said advocates for child care need to work to strengthen incentives for child care providers to become registered with the state. She said getting better child care data across the state should be a priority to help address issues.
“People want this information but we simply don’t collect the data,” Klein said.
‘Not a normal business model’
South Dakota is home to the highest workforce participation rate and home to families choosing to have children in some sort of child care.
On Tuesday, South Dakota’s Secretary of Education told lawmakers a statewide study of preschool gaps is planned for South Dakota. Klein the idea of universal preschool sounds too much like a mandate and Early Learners South Dakota doesn’t support mandates.
“It’s the freedom of choice for parents and its access to preschool or child care for everyone that would like it,” Klein said. “That’s what we want to see happen.”
Klein said she’d like to see more public, well-marketed announcements to meetings about input on child care. She stressed lawmakers need to hear more from child care providers and she’d like to see more requests.
“It’s not a normal business model,” Klein said about running a day care. “Income is only coming from parents and you will completely price them out.”