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More than $1B was invested in Arizona early childhood education. That funding is about to run out

Over the last three years, Arizona has received $1.3 billion from the federal government to support early childhood education and child care in Arizona.

There were direct grants to child care providers so they could stay open during the pandemic and parents could go to work, as well as investments in professional development to keep people working in the field and scholarships for low-income families needing resources for child care.

Now, those pandemic relief funds are running out — and the organization that funds early childhood education programs in Arizona is figuring out what to do when the funding cliff comes.

Melinda Gulick, CEO of First Things First, joined The Show to talk about it, beginning with the impact that $1.3 billion has had on the industry.

Full conversation

MELINDA GULICK: It's markedly different for the industry. It kept providers open stable and we were able to retain more employees, but it didn't ultimately long term stabilize the system. There's more need in Arizona. We know that about 60% of  children aged birth to 5 in Arizona live in a home where all adults work, meaning that all of those families need some sort of arrangement for child care. We want that to be a high quality experience for the young children in their family so that they can go to work, and it's a really important cog in the wheel of our economy for Arizona.

LAUREN GILGER: Right. And we'll talk more about that in a moment because now you're facing a funding cliff as many programs that were funded by this pandemic, federal funding are. What does this look like for you? 

GULICK: So what it looks like right now, and we have a sense of urgency around this is that on June 30 of this year, if the state does not invest in child care assistance, 5,200 families will immediately go on a waitlist. Those families currently qualify for child care assistance, which means they're working families. So 5,200 children will be without a place in child care and that's likely 5,200 at least individuals who will have to leave the workforce as a result. 

GILGER: We've seen a lot of people do this in recent years already, right? Like there's a large chunk of parents of small kids, especially who have just said it's not worth it to have my job because child care is so expensive. And at the same time, we should say there's sort of a a crisis in the child care industry, right? And staffing and staying open in general after the pandemic.

GULICK: So we know that 35% of adults in Arizona have left a job or reduced their hours because of child care issues. Over the last couple of years, 82% of employees have missed work or had significant absences because of child care issues. That's a significant number of employees in Arizona and it's costing the state and employers money. So $1.2 billion in lost wages and job search expenses and job recruitment expenses for employers, that's quantified in those numbers. And it's cost the state almost $350 million in lost state tax revenue, which would be really helpful as the state is facing a significant budget shortfall.

GILGER: Right, we're facing a shortfall. Now, the economic ripple effects of this are pretty clear and I think after the pandemic, most people understand those, right?

GULICK: Because we sort of saw inside people's homes.

GILGER: But there's also this piece of this conversation that I always think is very surprising. It's just how important research will show early childhood education is. 

GULICK: Absolutely. So we know that the connections that children make in the first 5 years of their life where most of the brain development, 90% of the brain development happens before kindergarten, set the trajectory of their life. It it leads to kindergarten readiness, third grade reading proficiency, higher graduation rates, higher post secondary attainment, whether that looks like a certificate program, an associate's degree, a bachelor's or postgrad work. If they've had an early childhood quality, early childhood experience, they're more likely to see those outcomes. And if they haven't, it's more significant special education remediation, grade retention, meaning they be held back a grade because they're not ready to move on. Lower graduation rates, higher instances of involvement with juvenile justice or adult corrections, and less of a chance for economic independence long term. So those first five years are the most important investment we can make in the future of Arizona and our workforce of tomorrow. But it's also very important for the workforce of today.

GILGER: I want to talk about options on the table, right. Like there is, if I'm not wrong, no state funding for this kind of stuff at this moment and hasn't been for a very long time. You're looking for some of that now.

GULICK: We are. So in 2008, when the state was in a recession, the nation was in a recession, the Legislature swept the state's investment in child care assistance. First Things First at that time, stepped in to provide scholarships for eligible income, eligible families so that we could keep Children in quality early learning settings and keep parents and caregivers at work. The state has not replaced that funding since 2008. There's a proposal and it's part of the governor's priority and also the Arizona Early Childhood Alliance to put $100 million of state general fund into child care assistance, which will alleviate that issue. That's looming of 5,200 children on the waitlist on July 1.

GILGER: Where does that stand right now?

GULICK: It stands in the budget negotiations. So as we know that that's a fluid exercise at the state Legislature, but we're not letting up, we know how important early childhood is, quality early learning experiences, and keeping people in the workforce.

GILGER: If you don't get any kind of state funding here and you do, you know, hit this funding cliff in September, what's that going to look like?

GULICK: Well, in addition to 5,200 kids on the wait list, it will cause extreme stress to providers because those 5,200 children are a reliable revenue source for child care providers to stay open and without that reliable income, it's possible that they'll close facilities, close classrooms and further exacerbate the situation because then there'll be less space. Currently, 48% of Arizona is a child care desert, meaning there's not enough space for the children we have today in child care. And so if spaces are eliminated as a result of this funding clip, the workforce will be further stressed. Child care costs, infant care costs $14,000 a year. On average in Arizona, we've seen it as high as $21,000 a year. Preschool pre-K type programs cost between $8,000 and $10,000 a year. And so it's a significant financial burden for families. And if you're a working family in one of those income eligible categories, this is a significant stressor for your family.

GILGER: Yeah. All right. We'll leave it there for now. Melinda Gulick, CEO of First Things First, joining us to talk more about this. Melinda, thank you for coming in. I appreciate it.

GULICK: Thank you for having me.

KJZZ’s The Show transcripts are created on deadline. This text may not be in its final form. The authoritative record of KJZZ’s programming is the audio record.

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Lauren Gilger, host of KJZZ's The Show, is an award-winning journalist whose work has impacted communities large and small, exposing injustices and giving a voice to the voiceless and marginalized.