A Critical Crossroads

 A Critical Crossroads for Childcare in Indiana: Investing in Our Future

Written by Allie Sutherland, Executive Director of the Northeast Indiana Early Childhood Coalition

Published in the Journal Gazette, December 20, 2024

Recently, the Family and Social Services Administration (FSSA) announced the reimplementation of a waitlist for new Child Care Development Fund (CCDF) applicants due to unprecedented demand and the tapering of federal funding. This decision marks a significant setback for families across Indiana, as child care subsidies will now be even more limited. Families were already finding it nearly impossible to access and afford quality care, if funding is not maintained at the current level, the impossible situation becomes even harder. It is imperative to understand the profound impact this will have on families, children, providers, and our community as a whole.

The Consequences of Shrinking Child Care Subsidies

FSSA Director Dr. Daniel Rusyniak estimates that current funding will allow the state to serve approximately 50,000 children in the upcoming fiscal year—down from over 70,000 children currently receiving support. This means 20,000 fewer children will have access to the care they need. These vouchers are critical for low-income working families earning less than 150% of the Federal Poverty Level (FPL), about $45,000 annually for a family of four. Yet, according to Child Care Aware of America, the average cost of care for two children in Indiana is a staggering $23,157 per year.

The hearing also revealed that most families benefiting from the CCDF program earn far below the 150% FPL threshold. For families already struggling, this waitlist will create impossible choices: pay out-of-pocket for unaffordable care, forego employment, or place their children in potentially unsafe, low-quality care.

This is not just a crisis for families—it will have ripple effects across our entire community. The Northeast Indiana Early Childhood Coalition (NEIECC), alongside Ambassador Enterprises and The Regional Chamber, commissioned a study in November 2022, which found that approximately 9,000 families in our region alone are impacted by the lack of affordable childcare. This challenge will only deepen under the new waitlist system.

The Role of Child Care Providers and the Sustainability Crisis

Child care providers—the backbone of our early childhood system—are already operating on razor-thin margins. Unlike K-12 education, which receives dedicated public funding, early care and education programs are primarily funded through parent tuition, limited subsidies, and philanthropy. Rising costs, including labor expenses to hire and retain qualified teachers, further strain providers. Without sufficient CCDF funding, many facilities will struggle to stay open, exacerbating Indiana’s existing shortage of child care seats.

The CCDF vouchers are vital for providers because they reimburse closer to the true cost of care. A reduction in subsidies will force providers to increase parent tuition—something many families simply cannot afford. In turn, providers may face closures, further reducing access to quality care.

The Office of Early and Out-of-School Learning estimates that $140 million annually is needed simply to maintain the current level of child care service statewide. Without these investments, we risk losing vital infrastructure that supports our workforce and economy.

Child Care Is Foundational for Our Workforce and Economy

Child care is more than a service; it is foundational to our community’s economic stability. High-quality early care supports critical brain development in children, laying the groundwork for future educational attainment, health, and success. Simultaneously, it enables parents to enter and remain in the workforce, supporting businesses and strengthening the economy.

Without access to affordable child care, labor force participation declines. Employers struggle to fill positions, businesses face productivity losses, and state and local governments lose income tax revenue. Neighboring states like Michigan and Illinois recognize this and have expanded childcare assistance to families earning up to 200% of the FPL. Indiana risks falling behind if we fail to act.

A Local Solution: Community-Led Innovation in Northeast Indiana

Despite these challenges, Northeast Indiana is proving that communities can lead the way. In April 2024, the Strategic Development Commission made a historic $5 million investment in early care and education. This funding will support the launch of the Tri-Share+ program in early 2025. Under this program, employers, employees, and Strategic Development Commission funds will share the cost of child care, reducing the financial burden on families by two-thirds.

The Tri-Share+ model offers a tangible solution that benefits everyone: families can afford care, parents can remain in the workforce, and employers gain a stronger, more stable workforce. This initiative underscores the importance of local collaboration and demonstrates that investing in child care is an investment in economic growth, workforce stability, and community well-being.

Additionally, communities across Northeast Indiana have invested in local county coalitions to ensure this work is truly regional and reaches families in every corner of our communities. County commissioners in Adams, Wells, LaGrange, Kosciusko, city government in Huntington and philanthropy across the region have stepped up to prioritize early care and education, ensuring that investments are made to support working families and strengthen local economies. Their leadership has been instrumental in driving this progress forward, and we owe them our thanks.

A Call to Action: Statewide Investments Are Needed

While local initiatives like the Tri-Share+ program are a step in the right direction, it won’t impact the 20,000 children who will lose their care. The Indiana legislature must act to ensure that CCDF funding is restored and expanded. We must prioritize families who are already falling through the cracks. Moreover, early educators and providers must be supported and recognized for the invaluable work they do.

Childcare is not just babysitting. It is a critical investment in our children’s future and our state’s economic success. Now is the time for bold action to protect the most vulnerable families, support our childcare providers, and secure Indiana’s future.