This story has been updated.
Representatives from several child care centers in San Antonio say they may be forced to increase child care fees as they face financial burdens that were temporarily relieved by federal funding — but they worry that upping rates will make it harder for local families to access much-needed services.
During the pandemic, U.S. child care centers got disbursements of $4 billion in American Rescue Plan Act money funneled through the Texas Workforce Commission’s Child Care Relief Fund. The funding helped retain caregivers and cover costs to operate the center without having to significantly boost tuition as much.
Now that the funding has ended, and with the Oct. 30 deadline to spend that money looming, centers are struggling to cover costs associated with high staff turnover rates, increasing wages and retaining staff.
“We don’t feel comfortable raising the rates of tuition as fast as everything else is increasing,” said Kumari Tapiador, owner of the Learning Tree Center on the Northeast side.
“In some parts of San Antonio, that’s very possible, but where I am, the demographic that I serve have their own financial struggles,” Tapiador said at a joint press conference hosted by the United Way of San Antonio and Bexar County and Children At Risk, both nonprofits that compile data from child care facilities and conduct research studies on centers in San Antonio.
The event was part of Children At Risk’s 12-city tour to discuss the effects of Texas’ 88th Legislative Session on early childhood education.
“I’ve had parents pay me in pennies, nickels and dimes— that loose change they had in their couch— to pay for that tuition to keep their children at the daycare center,” Tapiador said.
State Reps. Barbara Gervin-Hawkins, Ray Lopez and Diego Bernal and State Sen. José Menéndez advocated for Texas voters to support Proposition 2 at the event, emphasizing the need to relieve child care centers and investing into early childhood education.
If Proposition 2 passes in the Nov. 7 constitutional amendment election, it would allow San Antonio and Bexar County to exempt at least 50% of the appraised tax value of property used to operate child care facilities. For a business with multiple locations, that would have a big impact on annual property tax bills.
This means child care centers in San Antonio could get a tax break, saving them money they say will help fill the gaps federal funding will no longer cover.
Child care in Bexar County
In the Workforce Solutions Alamo coverage area, 237 centers would qualify for the tax cuts; 176 of which are in San Antonio, said Kim Kofron, senior director of early childhood education for Children at Risk.
Across the state, 2,700 child care centers would qualify, she said, adding that an analysis by Children at Risk found that the exemptions can save businesses between $1,000 to “tens of thousands of dollars a year.”
“It won’t solve it completely, but it will help get to the solution we’re looking for. Prop 2 will be a small slice of the pie to help reduce costs and expenses for child care centers,” Kofron said. “We need to do a lot more to rethink child care and give [centers] the support they need.”
Tapiador’s property tax bill for 2023 is $28,000, an increase of $2,000 from last year, she said, and it goes up every year.
Tax exemptions for the Learning Tree Center would mean that money would be allocated to cover costs so that the increase in tuition isn’t as steep.
Parents who go to the Learning Tree Center for child care for a toddler (18 months old to 3 years old) currently pay $170 a week. Tapiador said that if Proposition 2 does not pass, she will need to increase tuition by $30 a week, boosting the parents’ child care bill to $200 a week for child care for one toddler.
If Proposition 2 does pass, Tapiador said parents would keep about $250 more in their pocket per year per child, but she would still need to increase tuition by $20, about two-thirds of what she planned, keeping staffing lower and wages higher to retain educators.
Child care workers at the Learning Tree currently earn between $13 to $18 an hour, Tapiador said, and the increase in tuition would help keep those wages the same.
For Books & Bibs Child Care and Learning Academy, owner Stephanie Gray said Proposition 2 could mean a $10,000 tax exemption. Since she leases the property on the East Side, she currently only qualifies for tax exemptions on one property.
The money saved if Proposition 2 passes would go to a modest raise for workers, adding about $192 a week across the paychecks of the caregiver staff.
“It’s not sustainable for us to have that kind of a wage without increasing tuition exponentially,” Tapiador said.
Gray said she would need to increase tuition by $15 even if Proposition 2 passes to also keep pay competitive, since workers can go anywhere, she said. Three-quarters of that increase would go to salaries, she said.
“We have to increase the tuition because the funding stopped. All the funding we got over the last year and I gave my staff these bonuses, that stopped,” Gray said. “The payroll is what keeps you with staff … everything has gone up. We have to keep competitive with salaries.”
A changing landscape
At the conference on Wednesday, child care providers vented about the number of challenges they still face in the industry.
Gray said the federal funding helped her give staff bonuses each quarter and provide health insurance, but the bonuses are a thing of the past now, and most of her employees choose to skip on health insurance because they qualify for low-income care. She said she didn’t raise wages during the pandemic because she knew the funding wasn’t permanent.
Holding onto staff has been hard, Gray said: in the last six to eight months, she’s gone through about 25 employees that usually quit within a week. Usually because they know they could work at anywhere else for $15 an hour, she said. She has 13 staffers across the two centers today.
“Instead of me being able to ease a new employee in and hold their hand while you put them in the room, sometimes it’s like, ‘I am so sorry, I’m going to have to just stick you in this room,’” Gray said about the turnover. Sometimes it can be overwhelming, but there’s literally nothing we can do because we’re so short-staffed because of the turnover.”
“I’m OK with taking a loss because groceries are higher, because the water bill went up, because electricity has gone up, but I need to pay my staff,” she said.
The Learning Tree Center was the only center to participate in the United Way of San Antonio and Bexar County’s wage study which last year that boosted the wages of 19 educators from $9 to $11 an hour up to $15 to $18 an hour. The study ended in January 2023.
A report from the findings of phase one found that when child care employees’ salaries are enough to help them afford costs of living, they stayed at their jobs.
“Teachers overwhelmingly reported reduced stress levels and increased satisfaction,” the report said. “With increased financial stability, the desire to leave for other jobs decreased dramatically for educators.”
Tylane Barnes, owner of Converse Christian School, said she didn’t have the same high turnover rates, but the pandemic uncovered that loyal employees had low wages and expensive health insurance rates. Temporary pandemic relief funds helped her center invest into the employees by providing additional training and certifications and offering a better health insurance package and paying employees a living wage.
“That’s not sustainable without additional funds coming in from somewhere,” Barnes said.
Barnes said the property tax bill is about $18,000, and as her center prepares to open a 7,000 square foot building, she expects that total to double. She said a cut in her child care facility’s tax bill would allow her to invest into her staff’s education, a priority for her, since a number of her 22 staffers want to open child care centers of their own.
The need for child care is growing, Kofron said. In Texas, parents need and expect inclusive child care for children with special needs, and a growing number of people — especially military and restaurant personnel — need child care services outside of traditional daytime office work hours.
“If I had the staff, I would totally do it,” Tapiador said. “But where am I going to get the staff for that?”
Tapiador said her center takes in overflow from parents who live and work at Joint Base San Antonio-Fort Sam Houston, who sometimes wait years for a spot in child care centers that are at capacity and prioritized by military ranking on the base, she said.
In San Antonio as of August 2023, the United Way of San Antonio and Bexar County has found that 68% of child care centers — or two-thirds of centers across the city— aren’t Texas Rising Star certified, and may be forced to raise child care costs again past September 2024, when new laws will require TRS certification to be eligible for state subsidies.
Parents who get help from child care services benefit from the subsidized care. Gray said one parent at her center on E. Commerce pays a $68 co-pay per month for her three children, instead of $240 a week for the infant, $175 for the toddler, and $120 for the after-schooler. Although her center is TRS certified, parents at non-TRS certified centers run the risk of having their child care costs increase if their respective centers don’t seek certification.
To mitigate that additional possible increase to child care tuition, the United Way of San Antonio and Bexar County and Workforce Solutions Alamo is partnering with local organizations to hire early education coaches four months ago to go into local child care centers and help them reach Texas Rising certification so they don’t lose funding when that change goes into effect.
The United Way of San Antonio and Bexar County is also planning to begin phase two of its wage study — on a bigger scale, giving 65 caregivers in San Antonio a bump in their pay to about $16 an hour.
But child care providers are still expecting to need to raise tuition. In San Antonio, the average hourly wage for educators at child care centers is $10.34 an hour. Some earn only $8 an hour, earning below the federal poverty level.
“Anytime there’s an increase in bills for child care, the only way to re-up those costs is to charge those families more,” Kofron said. “It compounds. When you’re choosing to pay rent or pay child care or put food on the table, those are hard choices for families to make.”
Child care subsidies in Bexar County
Families can get an annual average of $14,000 in child care subsidies starting in January from the United Way of San Antonio and Bexar County’s child care program, which is now taking applications ahead of its Oct. 15 deadline.
There is no limit to how many families the program can help for the spring 2024 semester, said Kevin Femmel, director of communications for the United Way of San Antonio and Bexar County, since the Women United Organization raises money for scholarships year-round. Earlier this year, Women United raised $230,000 for the scholarship program. Applications for the program open twice a year, ahead of each fall and spring semester.
Families must meet the income requirements, must be enrolled in an academic institution or workforce development program, can’t be enrolled in another subsidized child care program, must be a U.S. citizen or resident to be eligible, and must live in Bexar County.
Families who don’t meet the requirements for the program are directed to affordable, TSR-qualified centers in their area.
Earlier this year, 70 families applied for the fall 2023 semester. Out of those, 40 got subsidized child care, and 10 were placed in child care subsidy programs under the Dual Generation Initiative, which also grants child care subsidies to families on the East and West Sides of San Antonio exclusively.
Workforce Solutions Alamo also offers child care scholarships to families outside of San Antonio and Bexar County if they meet monthly income requirements.
The City of San Antonio also partners with 605 child care centers in San Antonio to offer emergency, short-term child care subsidies to families in extenuating life circumstances, like those experiencing homelessness, survivors of domestic violence, and people who are hospitalized, among other situations.
The program, called Our City Cares, helped 63 families get up to eight weeks of child care for 123 children during fiscal year 2023.
For more information on emergency child care services, call Our City Cares at 210-230-6343.
