AFSME Local 602 - MSU Moorhead

State Squeezes Their Businesses

"It's not a business,it's a lifestyle," says Mounds View provider Clarissa Johnston.

Providers get into their profession for different reasons: the chance to run a business, to help parents and children in their community, or to have an income while staying at home to raise their own children. One thing providers learn quickly is that they’re not in it for financial gain.

“It’s always been more than a job,” says Sharon O’Boyle, a provider in St. Paul Park. “Any child-care providers still
doing it are not doing it for the money. It can be really, really hard to survive.” Since 2000, nearly 7,000 home-
based providers have gone out of business.

In the past few years, the state has balanced its bud­get, in part, through cuts to providers and families. Gov. Tim Pawlenty, for example, cut $11.5 million in subsidies that working parents rely on to help pay for child care.
Last year, legislators tried to restrict parents’ options for affordable care even more, and proposed prohibiting child care in rental homes.

Legislators also imposed a direct pay cut of 2.5 percent on Nov. 1. It means providers now get less from the state than they did in 2001. It’s even worse when providers have to wait as long as eight weeks for their reimbursement checks to arrive. Finally, reimbursement rates vary wildly: Depending on where the provider lives, rates for toddlers in accredited, licensed care range from $2.08 to $6.06 per hour. That is less than minimum wage.

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