In NYS, $100M to address critical childcare shortage

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Addressing a critical shortage of childcare providers in New York State, Gov. Katy Hochul has announced a $100 million commitment that is aimed at increasing the supply of childcare offerings for parents.

“Quality childcare is critical to our families, providing a safe environment for children and an educational foundation for the next generation of New Yorkers,” Hochul said in a written statement on Wednesday.

“Far too often, working families struggle to find programs in their communities,” said Hochul, whom childcare advocates describe as a longtime supporter of enhancing childcare in New York State.

The announcement for the new funding includes $50 million in capital funding for grants for the construction of new childcare centers and registered school-age childcare programs or the expansion of existing centers. An additional $50 million in business tax credits will be available for eligible businesses that create or expand infant and toddler childcare seats for their employees directly or through a third-party.

Under the Child Care Capital Program (CCCP), the state will award grants ranging from $500,000 to $1.5 million to eligible childcare providers to expand or build new centers. The program will be overseen by the New York State Office of Children and Family Services and administered by the Dormitory Authority of the State of New York. Funding will be split 60% for the downstate region, which includes New York City; Long Island, as well as Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester counties; 40% of the funding is designated for the rest of the state.

The cost of childcare has increased over the years, according to the most recent figures from the Department of Labor.  On Long Island, families were spending more than $18,000 for childcare in 2018, and are now paying nearly $22,000 in 2023. In both counties, about 75% of women participate in the workforce.

At the same time, families as well as childcare providers are coping with other financial pressures, including higher costs of living, and for some, stagnant wages.

The CCCP will provide reimbursement grants for the design, construction, reconstruction, rehabilitation equipment and other capital assets for existing or proposed state-licensed, not-for-profit or for-profit child day care centers and registered school-age childcare programs. The facility must be intended to be used as a childcare program for at least eight years. Projects must be shovel-ready, demonstrate the ability to be licensed and fully operational within six months of completing construction and worth at least $500,000.

In order to apply for CCCP grant, applicants must first prequalify through New York State Grants Gateway. Final applications will be accepted through March 31, 2024. Awards will be announced on or after July 15, 2024.

New York State is also making $25 million available for the Child Care Creation and Expansion Tax Credit each year for two years  – $50 million in total –  to be administered through the New York State Office of Children and Family Services and New York State Department of Taxation and Finance.

Under the new tax credit program, businesses with a location in New York State that provide new licensed or registered child day are seats for the infants or toddlers of their employees, either directly or through a third-party, can apply for the credit. To be eligible, they must also limit costs to their employees for childcare expenses.

The application to receive tax credits for child care seats created in 2023 opens Jan. 1, 2024, and closes Jan. 31, 2024.