ST. PAUL — Calls to combat Minnesota’s child care crisis intensified this year as advocacy groups, chambers of commerce, business development organizations and parents made the case to lawmakers that they needed to do something to close gaps in care options across the state.

Lawmakers took note.

As part of a two-year $48 billion spending plan, they agreed to lift burdensome regulations on in-home daycare providers and they funded grants aimed at helping new child care providers get up and running.

While conversations of reported fraud in the state’s program to help low-income families afford care pulled focus from the conversation, a mix of Democratic and Republican lawmakers’ ideas ultimately got approved as part of the state budget. Combined, the results should ensure that additional child care slots open up in the next two years, those who pushed for the reforms said.

“The challenge is bigger than the budget but at least these additional dollars will help make a difference,” Tim Penny, president of the Southern Minnesota Initiative Foundation, said. “It’ll move the needle.”

The Southern Minnesota Initiative Foundation, along with five other regional Initiative Foundations, is set to receive a piece of the $750,000 aimed at providing child care grants. Each individual group will determine how best to use the funds to grow child care slots in its region.

And that’s a good thing, said Bradley Peterson, executive director of the Coalition of Greater Minnesota Cities, as it can be tailored to fit the unique needs of each region.

“By sending it to the initiative foundations, specifically, you’re going to make sure that every corner of the state is going to get some attention,” Peterson said.

Across the state, parents are having a tough time finding access to child care, and that struggle has become especially pressing in greater Minnesota, where families rely more on in-home child care providers.

The Minnesota Departments of Human Services reported that in the summer of 2017 there were 8,654 in-home child care providers and 1,725 child care centers operating in the state. Between in-home and center-based care providers, that meant there was a capacity to serve 228,000 children

The state saw a net loss of nearly 2,000 in-home child care providers between 2013 and 2017, eliminating almost 3,100 child care spots.

As part of the state’s new two-year spending plan, the Minnesota Department of Employment and Economic Development will distribute another $750,000 in child care grants, with 60% required to go to greater Minnesota. The state will also pay to fund 4,000 voluntary pre-kindergarten slots that were set to expire as part of the two-year spending plan.

“There’s an acknowledgment that this is tougher sledding in Greater Minnesota and they need more help, so that’s a positive,” Laura Bordelon, senior vice president for advocacy at the Minnesota Chamber of Commerce, said. “All told, it’s $1.5 million in childhood grant funding and that’s important.”

Despite the additional dollars and loosening of some regulations, Penny said there was still work to be done.

“We have a long way to go,” Penny said. “We could use a lot more child care slots than we currently have in this part of the state.”

Penny said the issue has become an “economic imperative,” and because of that, a broader group of local leaders, business owners and others have joined efforts to convince lawmakers to act. In some areas of the state, the shortage is stalling business development. Companies might want to come in but without enough workers available, they can’t move forward.

And while in-home child care providers were glad to see some of the changes like allowing providers to let a qualified relative or another adult temporarily watch over children, Anoka County child care provider Julie Seydel said she was frustrated that discussions about fraud in the child care assistance program crowded out other topics.

“They kind of forgot about the child care crisis,” said Seydel, who also works as public policy director for the Minnesota Association of Child Care Professionals. “We have to stop the bleeding we’re experiencing in family child care.”

Sen. Jim Abeler, R-Anoka, chairs the Human Services Reform Finance and Policy Committee, and he agreed that conversations about anti-fraud efforts overshadowed efforts to streamline regulations for in-home providers. He said a task force charged with studying child care issues in the state could also take up some of those proposals.

Abeler stressed the importance of implementing new accountability measures to prevent fraud in the child care assistance program. The Office of the Legislative Auditor in March reported that more than $5 million in fraud in the program and said it wasn’t immediately clear whether additional misuse of state dollars has occurred.

“People need to be confident that the money is well spent,” Abeler said. “Now more people are watching and I think even the attention that has been brought because of the media is going to make people better behaved.”

House Democrats and Gov. Tim Walz sought to boost funding to the program so more low-income families would be able to access care. They said lawmakers could have approved that plan along with more anti-fraud measures.

But in private budget negotiations, legislative leaders and the governor agreed to freeze the program to inspect it. That decision will come at a cost for low-income families, said Rep. Dave Pinto, D-St. Paul, who chaired the House Early Childhood Finance and Policy Division.

“Many of those needs are not going to be met because folks felt we had to do the one thing before we increased the funding for that program,” Pinto said. “We could have done both and we should have done both.”

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