SAINT PAUL, Minn. – On Saturday, the Minnesota House of Representatives and Minnesota Senate approved a compromise Health and Human Services (HHS) budget pursuant to a bipartisan agreement. The budget, which now awaits an expected signature from Governor Walz, includes investments, funded through President Biden’s American Rescue Plan, targeted at the youngest Minnesotans and those who support them.
"Investments in the earliest years have the biggest payoff for both individuals and society,” said Rep. Dave Pinto (DFL – St. Paul), chair of the House Early Childhood Finance and Policy Committee. “While there is much more to do in this area, these investments will stabilize and reform this critical sector, so that parents can work, employers can expand, and children and communities can thrive, now and long into the future."
Early care and learning was in crisis even before the pandemic - unaffordable and inaccessible for families and paying poverty wages to providers, Even as many families struggle to afford this critical service, providers operate on thin margins and child care professionals receive poverty-level wages, hampering their ability to provide high-quality care.
The approved HHS budget uses the federal funding to address these challenges in multiple ways. To stabilize providers, it invests approximately $300 million in monthly grants over two years, 70 percent of which must be used to increase compensation for workers. An additional investment of more than $30 million will expand the supply of child care, through facility improvements and equipment, training, workforce development, and a new grant program for child care for children with disabilities.
To help low-income families and those who care for their children, the budget raises reimbursement rates for the Child Care Assistance Program (CCAP) to the 40th percentile of market rates for infants and toddlers, and the 30th percentile for older children. This represents a significant increase from current rates, at the 25th percentile, though is still far below the federal standard of the 75th percentile.
To support professionals who remain in the field and expand their skills, the budget invests in Teacher Education and Compensation Helps (TEACH) and Retaining Early Educators Through Attaining Incentives Now (REETAIN) grants. TEACH grants will help child care workers earn college credits and degrees with scholarships of up to $10,000 per year and incentives for those who remain in the industry. The REETAIN program offers competitive grants for well-trained child care workers. These investments will provide more stability for workers and the children and families they serve.
Several provisions aim to improve maternal and infant health and close persistent racial disparities in these critical areas. Investments in Integrated Care for High-Risk Pregnant Women (ICHRP), for example, will expand services for Black women in the metropolitan area and create additional regional care collaboratives for Indigenous women, and the Supporting Healthy Babies grant program provides community-driven education on supporting healthy development during pregnancy and postpartum. The Dignity in Pregnancy and Childbirth Act requires hospitals to offer a course on anti-racism and implicit bias to employees and contractors who regularly work with patients who are pregnant or postpartum. The budget also expands home visiting programs and extends health coverage for low-income women following birth from the current standard of 60 days to a full 12 months.
Finally, the HHS budget points the way toward significant reforms of early care and learning. It creates a Great Start for All Minnesota Children Task Force, which is directed to develop a ten-year plan for affordable, high-quality early care and learning for all families, with livable wages for teachers. The budget also requires that the Governor’s Children’s Cabinet study early childhood governance and the possible consolidation of programs, which are currently spread over four state agencies. It funds the modernization of regulations, many of which date to the 1980s. It focuses particular support on family child care providers, including establishing a regulatory ombudsperson and one-stop regional assistance network, among many other reforms.
Health and Human Services is not the only budget area addressing early care and learning. While the E-12 Education budget does not expand investments in this area, it does preserve 4,000 voluntary pre-kindergarten slots that were set to expire. In addition, the Workforce Development budget contains more than $10 million in funding to support child care supply, including major renovations ineligible for the federal funds contained in the HHS budget.