Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I am very pleased to welcome to the show. Joining
me in studio, Tamara. Ryan Tamra is a nationally recognized speaker, author,
leadership expert, and the Core's Economic Mobility Fellow for the
Common Sense Institute, where I have the privilege of being
a fellow as well in a slightly different area. Tamra, Welcome.
It's good to see in person. Thanks for being here. Yeah,
(00:22):
I'm so glad you came in studio. It's great you,
along with a couple folks from Common Sense Institute, put
out a report recently called the Economic Impacts of Lost
Childcare Assistance in Colorado, and I have to say, just
as far as the numbers and the costs and the
scale of all this, I was blown away by some
(00:44):
of some of these numbers, which is a whole different
question which we will also get into to maybe what
are some of the solutions here? But can you start
us off by describing the problem.
Speaker 2 (00:54):
Well, this particular report was specifically about childcare assistance, which
is something is available to low income families, and about
thirty thousand kids across the state are served by this
childcare assistance, So that means that a low income family
can apply to get the subsidy, and then that money
goes to the childcare center to help decrease the cost
(01:17):
that they pay. And right now, there are some federal
mandates that have come down that have changed how childcare
centers get paid in a way that's actually good for
the childcare center and also have limited will limit the
amount that a family can pay to just seven percent
of their household income, also good for families and childcare centers. However,
(01:42):
these mandates came down with no additional funding, and that's
really the genesis of the report because we wanted to
look at, Okay, what's the impact going to be if
we can't fund the childcare needs.
Speaker 1 (01:54):
What are the main federal mandates that are driving changes
in cost of childcare?
Speaker 2 (02:00):
Oh, in a bigger picture, it's so it's when it
comes down to the cost of childcare, it's much more localized.
So those things are related to UH regulatory and licensure issues.
Speaker 1 (02:17):
At the state.
Speaker 2 (02:19):
And also to a certain extent at local level. Because
the way the way childcare works, you know Colorado, with
the way any of our benefits work, Colorado receives federal
government money, it gets distributed to counties and then counties
distributed to the individuals.
Speaker 3 (02:38):
That's the system.
Speaker 2 (02:39):
Colorado is just one of ten states in the US
that is county based for those things.
Speaker 3 (02:45):
So what is affecting the cost of.
Speaker 2 (02:47):
Childcare is that there are rules and regulations at a
state level, and there are rules and regulations at county levels.
But we're talking things like te sure to child ratios.
That's a you know, a regulatory thing that impacts so
if you can only have one in Colorado, you can
(03:07):
have one teacher for three infants. So when you think
about that, that's what makes it a very labor intensive industry. Yeah,
there are other quality things and safety things that are
regulated that impact costs. Where the center can be located,
what you know, what the facility has to be like,
(03:28):
et cetera.
Speaker 1 (03:29):
And just to remind listeners, with Common Sense Institute, you
can go to CSICO dot org. So Common Sense Institute
Colorado c s I c O dot org. If you
click on I think this is up on the front page,
but also if you click on on research you can
find it in there as well. A couple of bullet
points camera and near the top of your report, I'm
(03:51):
going to quote this change and it's about a subsidization
rate coupled with increases in childcare costs will increase Colorado's
program costs by over twenty million.
Speaker 4 (04:02):
Dollars in the next three years.
Speaker 1 (04:04):
So that's one kind of stunning number, especially at a
time when the state budget is pretty squeezed. And then
the other one that actually shocked me even more. With
the new requirements, the state average annual cost per child
is expected to increase from six thousand dollars to eighteen
thousand dollars. So, how can it possibly cost eighteen thousand
(04:24):
dollars to do childcare per kid per year?
Speaker 4 (04:29):
I can imagine it.
Speaker 1 (04:30):
Actually, if it's limited to like you can only be
taken care of three, then you get no economies of
scale at all. Right, But what are the main things
that are driving this astonishing number.
Speaker 2 (04:41):
Well, so the two things that we focused on. We
talked about the new mandates from the federal government broadly,
but there are really two things that are driving those
changing cost One is that families will no longer have
to pay more than seven percent of their household income
if they're receiving childcare system. And so there are instances
(05:06):
in which families pay upwards of twenty to thirty percent
of their household income for childcare.
Speaker 4 (05:11):
Wow.
Speaker 3 (05:11):
And so.
Speaker 2 (05:14):
This new mandate says a families cannot spend more than
seven percent, which the Department of Health and Human Services
says is what the level.
Speaker 3 (05:23):
Is for it to be affordable. So that's where that
number comes from.
Speaker 1 (05:27):
And so does the sound crazy. I don't know if
it's perfect, but it doesn't sound crazy.
Speaker 3 (05:31):
No, And so the cost per kid goes up because.
Speaker 4 (05:36):
They might have been meant the government's part of the
cost for a kid.
Speaker 1 (05:39):
Goes up because the individual is contributing less of the cost.
Speaker 2 (05:43):
And so now the cost per kids going up, But
the federal government isn't has historically been about seventy one
percent of the total SEACAP dollars, they're not increasing those dollars.
We know what's happening in the state right now. The
state doesn't have more money and so now there's more
money has to be paid to childcare centers and there's
(06:04):
no additional dollars to do it.
Speaker 1 (06:06):
One of the things that has frustrated me a lot,
and this is a more macro concept, is how many
levels of state and local government, not just in Colorado,
in lots of places built essentially permanent programs using funding
for it with I will call COVID money the American
Rescue Plan Act, right, And there's some of that going
(06:27):
on here right where that was used to fund and
now that money's gone, and now they're scrambling as if
they didn't know that money was going to disappear, or
maybe I'm being too harsh about it.
Speaker 3 (06:37):
Well, I think it's a combination of things.
Speaker 2 (06:40):
That money, in my view, particularly related to childcare assistance,
was really important because when you look at the majority
of the parents who get childcare assistants assistance, it's moms.
But women really led in terms of their employment the
recovery from the pandemic. They were the most affected at
(07:00):
the beginning of the pandemic, but they really led the
recovery in terms of their employment. So those dollars feel
like they were actually really well spent because they allowed
more moms to get back into.
Speaker 3 (07:10):
The labor force.
Speaker 1 (07:11):
Okay, And so just to be clear about what I'm saying,
you know, we can have different conversations about whether the
money should or shouldn't have been spent that way during COVID,
And you know, maybe a libertarian would like me, would
say that's not the government's job. But that's not really
the issue I'm raising right now. The issue I'm raising
right now is is why would governments, in this project
(07:34):
or anything else, build things that are reliant on a
funding source that they know is temporary.
Speaker 2 (07:41):
Well, I think this was a bit of a perfect
storm because what also happened in that same period was
the cost of childcare went up. And you think about
what happened in twenty twenty, because we as voters voted
on a constitutional amendment to increase minimum wage, you might recall, well,
if you look at the trends in terms of cost
(08:02):
of childcare, they started ratcheting up at the same time.
And so it's kind of a perfect storm of problem.
Because the costs are going up dramatically, we were able
to use the ARPA money temporarily.
Speaker 3 (08:15):
Now we're in a pickle.
Speaker 4 (08:16):
Okay, just a couple of minutes left here.
Speaker 1 (08:20):
One of the other things you talk about in the report,
and again for those joining this report for the Common
Sense Institute and headed up by Tamara Ryan, for this
report the economic impacts of Lost childcare assistants in Colorado.
Speaker 4 (08:33):
So just give us.
Speaker 1 (08:35):
Briefly what the title says, there the economic impact.
Speaker 4 (08:39):
Why is this important? Brought in the macro?
Speaker 2 (08:43):
In the macro, So there have been about thirty thousand
kids served by childcare assistants. What is happening now is
that twenty four counties across the state have either frozen
or waitlisted their new applicants to childcare assistants. So if
today you're in one of those counties and you have
a baby, you would not be able to get childcare
(09:05):
assistance if you're.
Speaker 3 (09:06):
A low income family.
Speaker 2 (09:07):
So they're estimating, the state is estimating that we will
go from thirty thousand kids serve to ten thousand kids
ser Wow. So it's not one to one for parents,
it's about one point five children per parent. And so
we looked at what happens if just twenty percent of
those parents who no longer have childcare assistance.
Speaker 3 (09:27):
Leave the labor force. Right, what we saw was.
Speaker 2 (09:29):
That the economic impact on the state would be about
one point one billion dollars with a B.
Speaker 4 (09:35):
Yeah.
Speaker 1 (09:36):
And on the other hand, if the state we're paying
you know, eighteen thousand dollars or whatever the state's share, Yeah,
the state share, If it's going to eighteen thousand dollars,
how does that compare to the economic loss that you
just described of them leaving the workforce.
Speaker 3 (09:50):
Well, I guess first I want to save the gap.
Speaker 2 (09:53):
What it would take to fill the gap of childcare
assistance is about seventy millions.
Speaker 1 (09:57):
Okay, so a lot less than the one small fraction.
Speaker 4 (10:01):
Yeah, and so at six percent.
Speaker 2 (10:03):
And it's about seventy three hundred jobs directly lost and indirect.
Speaker 3 (10:07):
Jobs lost, about ten thousand jobs lost.
Speaker 2 (10:09):
Because you think about those, all those families who are
no longer working, we as a state lose the disposable income,
meaning what they spend on rent and at the grocery
store and things like that.
Speaker 4 (10:22):
Okay, so literally one minute left.
Speaker 1 (10:25):
If you assume that there's not going to be more
federal money, and if you assume, just for the sake
of this conversation, that there will not be a state
tax hike to fund any of this, and maybe or
maybe not more state money because the state budget is
in trouble already. What are the primary things you might
(10:45):
try to make this problem better. If you're not going
to be able I don't mean you are going to
be able to throw more money at it.
Speaker 2 (10:52):
If you're not going to be able to throw more
money at it. You've got to find ways to save
how how well? I think one of the ways be
to look at the regulations. So for instance, not necessarily
for infants, but for toddlers and older children. There might
be an opportunity to change the ratios of teachers. And
there are some studies that look at that difference. So
(11:13):
if you were to go from one to four toddlers
one to five, you could save that. This study said
you could save about seven thousand dollars a year average.
Speaker 4 (11:24):
Cost per per kid kid. That's a lot.
Speaker 3 (11:27):
Yeah, it adds up.
Speaker 1 (11:29):
Yeah. Are you getting any traction with this with state government?
Are you trying? Are you talking to politicians about it
or local regulators whoever?
Speaker 4 (11:37):
Whoever's doing this?
Speaker 3 (11:38):
Yeah?
Speaker 2 (11:38):
So, State Senators Right and State Senator Matt Ball are
actually kind of on the case and are gathering a group.
They're hoping to create a task force to look at
how changes might come about regulatory or rules that would
decrease the cost and make it a more viable industry.
Speaker 4 (12:00):
I wish you, I wish you a lot of luck.
Speaker 1 (12:02):
I much much much prefer to have people in the
workforce then not, And this is something we should all
we should all care about eighteen thousand dollars A kid
is simply not gonna work, and they have to find
ways to save money, even if they are gonna throw
more money at it. Eighteen thousand dollars a kid is
not gonna work. Tamara Ryan's new report, along with Cole
(12:23):
Anderson and Thomas Young of the Common Sense Institute is
The Economic Impacts of Lost Childcare Assistance in Colorado. You
can read it at CSI co dot org. Tamra, thanks
so much for joining me and thanks for the really
interesting report.
Speaker 3 (12:36):
You got good to be here
I am very pleased to welcome to the show. Joining
me in studio, Tamara. Ryan Tamra is a nationally recognized speaker, author,
leadership expert, and the Core's Economic Mobility Fellow for the
Common Sense Institute, where I have the privilege of being
a fellow as well in a slightly different area. Tamra, Welcome.
It's good to see in person. Thanks for being here. Yeah,
(00:22):
I'm so glad you came in studio. It's great you,
along with a couple folks from Common Sense Institute, put
out a report recently called the Economic Impacts of Lost
Childcare Assistance in Colorado, and I have to say, just
as far as the numbers and the costs and the
scale of all this, I was blown away by some
(00:44):
of some of these numbers, which is a whole different
question which we will also get into to maybe what
are some of the solutions here? But can you start
us off by describing the problem.
Speaker 2 (00:54):
Well, this particular report was specifically about childcare assistance, which
is something is available to low income families, and about
thirty thousand kids across the state are served by this
childcare assistance, So that means that a low income family
can apply to get the subsidy, and then that money
goes to the childcare center to help decrease the cost
(01:17):
that they pay. And right now, there are some federal
mandates that have come down that have changed how childcare
centers get paid in a way that's actually good for
the childcare center and also have limited will limit the
amount that a family can pay to just seven percent
of their household income, also good for families and childcare centers. However,
(01:42):
these mandates came down with no additional funding, and that's
really the genesis of the report because we wanted to
look at, Okay, what's the impact going to be if
we can't fund the childcare needs.
Speaker 1 (01:54):
What are the main federal mandates that are driving changes
in cost of childcare?
Speaker 2 (02:00):
Oh, in a bigger picture, it's so it's when it
comes down to the cost of childcare, it's much more localized.
So those things are related to UH regulatory and licensure issues.
Speaker 1 (02:17):
At the state.
Speaker 2 (02:19):
And also to a certain extent at local level. Because
the way the way childcare works, you know Colorado, with
the way any of our benefits work, Colorado receives federal
government money, it gets distributed to counties and then counties
distributed to the individuals.
Speaker 3 (02:38):
That's the system.
Speaker 2 (02:39):
Colorado is just one of ten states in the US
that is county based for those things.
Speaker 3 (02:45):
So what is affecting the cost of.
Speaker 2 (02:47):
Childcare is that there are rules and regulations at a
state level, and there are rules and regulations at county levels.
But we're talking things like te sure to child ratios.
That's a you know, a regulatory thing that impacts so
if you can only have one in Colorado, you can
(03:07):
have one teacher for three infants. So when you think
about that, that's what makes it a very labor intensive industry. Yeah,
there are other quality things and safety things that are
regulated that impact costs. Where the center can be located,
what you know, what the facility has to be like,
(03:28):
et cetera.
Speaker 1 (03:29):
And just to remind listeners, with Common Sense Institute, you
can go to CSICO dot org. So Common Sense Institute
Colorado c s I c O dot org. If you
click on I think this is up on the front page,
but also if you click on on research you can
find it in there as well. A couple of bullet
points camera and near the top of your report, I'm
(03:51):
going to quote this change and it's about a subsidization
rate coupled with increases in childcare costs will increase Colorado's
program costs by over twenty million.
Speaker 4 (04:02):
Dollars in the next three years.
Speaker 1 (04:04):
So that's one kind of stunning number, especially at a
time when the state budget is pretty squeezed. And then
the other one that actually shocked me even more. With
the new requirements, the state average annual cost per child
is expected to increase from six thousand dollars to eighteen
thousand dollars. So, how can it possibly cost eighteen thousand
(04:24):
dollars to do childcare per kid per year?
Speaker 4 (04:29):
I can imagine it.
Speaker 1 (04:30):
Actually, if it's limited to like you can only be
taken care of three, then you get no economies of
scale at all. Right, But what are the main things
that are driving this astonishing number.
Speaker 2 (04:41):
Well, so the two things that we focused on. We
talked about the new mandates from the federal government broadly,
but there are really two things that are driving those
changing cost One is that families will no longer have
to pay more than seven percent of their household income
if they're receiving childcare system. And so there are instances
(05:06):
in which families pay upwards of twenty to thirty percent
of their household income for childcare.
Speaker 4 (05:11):
Wow.
Speaker 3 (05:11):
And so.
Speaker 2 (05:14):
This new mandate says a families cannot spend more than
seven percent, which the Department of Health and Human Services
says is what the level.
Speaker 3 (05:23):
Is for it to be affordable. So that's where that
number comes from.
Speaker 1 (05:27):
And so does the sound crazy. I don't know if
it's perfect, but it doesn't sound crazy.
Speaker 3 (05:31):
No, And so the cost per kid goes up because.
Speaker 4 (05:36):
They might have been meant the government's part of the
cost for a kid.
Speaker 1 (05:39):
Goes up because the individual is contributing less of the cost.
Speaker 2 (05:43):
And so now the cost per kids going up, But
the federal government isn't has historically been about seventy one
percent of the total SEACAP dollars, they're not increasing those dollars.
We know what's happening in the state right now. The
state doesn't have more money and so now there's more
money has to be paid to childcare centers and there's
(06:04):
no additional dollars to do it.
Speaker 1 (06:06):
One of the things that has frustrated me a lot,
and this is a more macro concept, is how many
levels of state and local government, not just in Colorado,
in lots of places built essentially permanent programs using funding
for it with I will call COVID money the American
Rescue Plan Act, right, And there's some of that going
(06:27):
on here right where that was used to fund and
now that money's gone, and now they're scrambling as if
they didn't know that money was going to disappear, or
maybe I'm being too harsh about it.
Speaker 3 (06:37):
Well, I think it's a combination of things.
Speaker 2 (06:40):
That money, in my view, particularly related to childcare assistance,
was really important because when you look at the majority
of the parents who get childcare assistants assistance, it's moms.
But women really led in terms of their employment the
recovery from the pandemic. They were the most affected at
(07:00):
the beginning of the pandemic, but they really led the
recovery in terms of their employment. So those dollars feel
like they were actually really well spent because they allowed
more moms to get back into.
Speaker 3 (07:10):
The labor force.
Speaker 1 (07:11):
Okay, And so just to be clear about what I'm saying,
you know, we can have different conversations about whether the
money should or shouldn't have been spent that way during COVID,
And you know, maybe a libertarian would like me, would
say that's not the government's job. But that's not really
the issue I'm raising right now. The issue I'm raising
right now is is why would governments, in this project
(07:34):
or anything else, build things that are reliant on a
funding source that they know is temporary.
Speaker 2 (07:41):
Well, I think this was a bit of a perfect
storm because what also happened in that same period was
the cost of childcare went up. And you think about
what happened in twenty twenty, because we as voters voted
on a constitutional amendment to increase minimum wage, you might recall, well,
if you look at the trends in terms of cost
(08:02):
of childcare, they started ratcheting up at the same time.
And so it's kind of a perfect storm of problem.
Because the costs are going up dramatically, we were able
to use the ARPA money temporarily.
Speaker 3 (08:15):
Now we're in a pickle.
Speaker 4 (08:16):
Okay, just a couple of minutes left here.
Speaker 1 (08:20):
One of the other things you talk about in the report,
and again for those joining this report for the Common
Sense Institute and headed up by Tamara Ryan, for this
report the economic impacts of Lost childcare assistants in Colorado.
Speaker 4 (08:33):
So just give us.
Speaker 1 (08:35):
Briefly what the title says, there the economic impact.
Speaker 4 (08:39):
Why is this important? Brought in the macro?
Speaker 2 (08:43):
In the macro, So there have been about thirty thousand
kids served by childcare assistants. What is happening now is
that twenty four counties across the state have either frozen
or waitlisted their new applicants to childcare assistants. So if
today you're in one of those counties and you have
a baby, you would not be able to get childcare
(09:05):
assistance if you're.
Speaker 3 (09:06):
A low income family.
Speaker 2 (09:07):
So they're estimating, the state is estimating that we will
go from thirty thousand kids serve to ten thousand kids
ser Wow. So it's not one to one for parents,
it's about one point five children per parent. And so
we looked at what happens if just twenty percent of
those parents who no longer have childcare assistance.
Speaker 3 (09:27):
Leave the labor force. Right, what we saw was.
Speaker 2 (09:29):
That the economic impact on the state would be about
one point one billion dollars with a B.
Speaker 4 (09:35):
Yeah.
Speaker 1 (09:36):
And on the other hand, if the state we're paying
you know, eighteen thousand dollars or whatever the state's share, Yeah,
the state share, If it's going to eighteen thousand dollars,
how does that compare to the economic loss that you
just described of them leaving the workforce.
Speaker 3 (09:50):
Well, I guess first I want to save the gap.
Speaker 2 (09:53):
What it would take to fill the gap of childcare
assistance is about seventy millions.
Speaker 1 (09:57):
Okay, so a lot less than the one small fraction.
Speaker 4 (10:01):
Yeah, and so at six percent.
Speaker 2 (10:03):
And it's about seventy three hundred jobs directly lost and indirect.
Speaker 3 (10:07):
Jobs lost, about ten thousand jobs lost.
Speaker 2 (10:09):
Because you think about those, all those families who are
no longer working, we as a state lose the disposable income,
meaning what they spend on rent and at the grocery
store and things like that.
Speaker 4 (10:22):
Okay, so literally one minute left.
Speaker 1 (10:25):
If you assume that there's not going to be more
federal money, and if you assume, just for the sake
of this conversation, that there will not be a state
tax hike to fund any of this, and maybe or
maybe not more state money because the state budget is
in trouble already. What are the primary things you might
(10:45):
try to make this problem better. If you're not going
to be able I don't mean you are going to
be able to throw more money at it.
Speaker 2 (10:52):
If you're not going to be able to throw more
money at it. You've got to find ways to save
how how well? I think one of the ways be
to look at the regulations. So for instance, not necessarily
for infants, but for toddlers and older children. There might
be an opportunity to change the ratios of teachers. And
there are some studies that look at that difference. So
(11:13):
if you were to go from one to four toddlers
one to five, you could save that. This study said
you could save about seven thousand dollars a year average.
Speaker 4 (11:24):
Cost per per kid kid. That's a lot.
Speaker 3 (11:27):
Yeah, it adds up.
Speaker 1 (11:29):
Yeah. Are you getting any traction with this with state government?
Are you trying? Are you talking to politicians about it
or local regulators whoever?
Speaker 4 (11:37):
Whoever's doing this?
Speaker 3 (11:38):
Yeah?
Speaker 2 (11:38):
So, State Senators Right and State Senator Matt Ball are
actually kind of on the case and are gathering a group.
They're hoping to create a task force to look at
how changes might come about regulatory or rules that would
decrease the cost and make it a more viable industry.
Speaker 4 (12:00):
I wish you, I wish you a lot of luck.
Speaker 1 (12:02):
I much much much prefer to have people in the
workforce then not, And this is something we should all
we should all care about eighteen thousand dollars A kid
is simply not gonna work, and they have to find
ways to save money, even if they are gonna throw
more money at it. Eighteen thousand dollars a kid is
not gonna work. Tamara Ryan's new report, along with Cole
(12:23):
Anderson and Thomas Young of the Common Sense Institute is
The Economic Impacts of Lost Childcare Assistance in Colorado. You
can read it at CSI co dot org. Tamra, thanks
so much for joining me and thanks for the really
interesting report.
Speaker 3 (12:36):
You got good to be here
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