Here’s what’s wrong with new proposed rules for daycare centers

According to ChildCare Aware, in 2022, Minnesota parents spent over $17,000 to send their infant to a daycare center. Daycare for infants took up 21 percent of median household income, ranking Minnesota as the 6th most expensive state (California not included).

Daycare for older kids was also largely unaffordable. For toddlers, daycare centers cost over $15,000, or 19 percent of median household income. Minnesota was the 8th most expensive state for toddlers (California not included). For 4-year-olds, daycare centers cost over $13,000 or 16 percent of median household income, making Minnesota the 4th most expensive state (California not included).

Unfortunately, under the notion of childcare modernization, the Minnesota Department of Human Services (DHS) is proposing rules that will not only not address high prices but might make daycare even more expensive for parents.

Figure 1: Annual cost of Center-Based Infant care as a percent of Median Household Income, Minnesota (2022)

Source: ChildCare Aware, US Census Bureau

What is childcare modernization?

In 2021, the Minnesota legislature passed laws creating the Child Care Regulation Modernization Project. Under this law, the Minnesota DHS was tasked with analyzing childcare licensing standards (for both centers and family childcare providers) and proposing changes. The DHS partnered with the National Association for Regulatory Administration (NARA), as was required by law. NARA was largely responsible for reviewing literature on childcare, as well as comparing standards across states.

Just recently, DHS released drafts of those new proposed standards (for both centers and family childcare providers) which can be found here.

This post is a look at the proposed standards for daycare centers and why they are problematic.

What’s wrong with proposed licensing standards

Generally, compared to home-based providers, licensed daycare centers are more stringently regulated in Minnesota. Centers, for example, follow stricter staff-child ratios. Centers also face more stringent staff hiring requirements for staff. In the last couple of years, this has resulted in a shortage of qualified applicants.

Fortunately, the DHS has proposed loosening these hiring requirements. However, while these changes are welcome, they do not go far enough. Moreover, in addition to these small changes, the DHS has proposed new rules in other areas that will micromanage activity at childcare centers.

More can be done to reform hiring requirements

Currently, Minnesota laws allow multiple pathways for someone to become a daycare center teacher. However, all of them require a great deal of investment. Someone with a bachelor’s degree, for example, needs over 1,000 hours or 6 months of experience as an assistant teacher.

An applicant with a high school diploma needs 1 year or over 2,000 hours of experience as an aide as well as post-secondary credits to become an assistant teacher first. After that, he or she needs an extra two years of work experience to become a teacher.

Under the proposed standards, these rules have been loosened.

Someone with a high school diploma will no longer be required to become an assistant teacher first. Instead, they can directly become a teacher with two years of experience and some credits. Similarly, someone with a bachelor’s degree would need about 3 months of experience instead of 6 months. Previously, someone with a Child Development Associate (CDA) credential needed 1,560 hours or 9 months hours of experience to become a teacher. New proposed rules would require 6 months or 1,040 hours of experience.

What constitutes experience has also been expanded to include childcare work as a family childcare provider. People who provide care in a home or residential facility serving children with disabilities can also count that as experience.

While these changes are welcome, they do not go far enough in addressing stringent regulations.

Consider the following.

While post-secondary credits are reduced for people with high school diplomas, proposed standards would require that half of those credits be in child development. This restriction would still limit the pool of applicants. While family childcare providers can transition and become teachers at daycare centers, they would need 6-semester post-secondary credits.

Our neighboring states have more affordable childcare in part because they have less stringent regulations. As I previously wrote,

 In South Dakota, North Dakota, and Iowa, staff dealing directly with children must only meet age and training requirements. Sure, child-care workers in North Dakota operate under supervision, but those supervisors only need to have a school diploma and one year of child-care experience. While Wisconsin does require child-care workers to have college credits, it only requires two courses for teachers and one course for assistant teachers. Moreover, a center can hire an assistant teacher with no prior experience, and a teacher is only required to have 320 hours of experience, not thousands.

Even with proposed changes, Minnesota would remain significantly more burdensome than our neighboring states.

New rules will likely raise costs or drive providers out of the industry

Much like family childcare providers, centers will also have to follow new myriad rules that will micromanage the day-to-day operations of daycare centers.

For instance, centers must

  1. check on sleeping infants every 15 minutes,
  2. Set indoor temperatures between 68 and 82 degrees,
  3. test their water for contaminants,
  4. cover bare soil or test it for lead,
  5. document problematic behavior, including steps taken to curb behavior,
  6. and notify parents if pesticides will be used

Centers must follow certain cleaning and sanitizing schedules. Certain kinds of sanitizers and products such as aerosols are also prohibited, and restrictions have been placed on walking distances.

Specifically,

When walking with children under school age, the destination must not be more than 2,000 feet from the center or transportation must be provided by the license holder. In no case, however, shall school-aged children walk further than one-half mile from the center.

The Minnesota childcare industry is at risk; proposed rules would make things worse

In addition to high prices, the Minnesota childcare industry has been losing slots. Between 2000 and 2021, Minnesota lost over 20,000 slots, largely due to family childcare providers exiting the industry.

Currently, licensed centers take a bigger share of total capacity now than in the past, making them a crucial source of childcare for parents. New rules, however, could discourage new entrants, especially in greater Minnesota where operating centers are financially less feasible. This could reduce capacity even further, especially given that the DHS is proposing more stringent rules for family childcare providers.

Figure 2. Childcare capacity in MInnesota (2000-2021)

Source: Minnesota Department of Human Services

But even in the unlikely event that capacity remains unaffected, proposed rules would still complicate childcare work for centers. New cleaning, documentation, and testing rules will cost centers money, and time. Centers would have to hire more workers or take time away from taking care of children to comply.

All in all, Minnesotans need to be concerned with the DHS’ proposed licensing standards as they will likely raise prices and reduce childcare capacity.