Governor announces $6 million in grants to create more than 2,200 new child care slots
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Gov. Tim Walz (standing left) and DEED Commissioner Matt Varilek watch children paint at St. David's Center for Child & Family Development in Minnetonka on May 15, 2024. Photo by Madison McVan/Minnesota Reformer.
Twenty-one Minnesota organizations will receive funding to open or expand child care centers this year, Gov. Tim Walz announced Wednesday.
More than half of the grants will go to providers outside the Twin Cities, including Alexandria, Austin, Luverne, Grand Marais, Starbuck, Northfield and Fosston.
Lawmakers boosted funding for the Department of Employment and Economic Development’s child care grant program last year. DEED officials expect the grants to create 2,241 new child care slots; the agency will release another $6.2 million in grants later this year.
Walz said Wednesday that child care is an example of a “market failure” during a visit to the St. David’s Center for Child & Family Development in Minnetonka, which received a $270,000 grant to create more classrooms and educational spaces.
Nationwide, the child care industry is in crisis; Minnesota is no exception, facing a shortage of child care providers, high costs for families and a dearth of workers. Minnesota has some of the highest child care costs in the country, which could be one explanation for an low birth rate in recent years.
The Legislature last year voted to continue a COVID-era program that raised the pay for child care workers, averting a funding cliff.
A coalition of child care advocates this session pushed for a subsidy program that would reduce the cost of child care for families making less than 150% of the median income. If fully-funded at around $500 million per year, families on the lower end of the income spectrum would have their child care bills covered by the state, while qualifying families making more than the median income would pay around 7% of their household income on child care, a target set by the federal government.
Walz, who met Monday with the coalition behind the subsidy program, said Wednesday he supports that proposal, but not this year.
Despite a strong push by advocates and some DFL lawmakers at the Legislature this session, Walz and other DFL leaders were not willing to approve a new costly program outside of a budget year — which typically takes place in odd-numbered years.
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