Childcare in the Hudson Valley

Families throughout the Hudson Valley rely on affordable, high-quality childcare to jumpstart the education of their kids and allow parents and guardians to get to work. That's why many civic leaders turned their attention to childcare in recent years as the service became more expensive and harder to find, and as childcare businesses closed because of the economic whiplash caused by the coronavirus pandemic.

Stories of childcare stress abound throughout the Hudson Valley. Parents in rural areas have been forced to drive long distances to get childcare because local providers have closed. Those seeking childcare have faced year-long waiting lists that hold them in limbo. Employers who want to provide on-site childcare for their workers are often turned back by tough and complex regulations. Young families are buried by the cost of childcare, which rivals the cost of a mortgage. Licensed childcare providers have struggled to balance their finances as universal pre-K took moved thousands of 4-year-old kids into public schools, taking away a valued source of revenue for childcare businesses. And childcare workers struggled to stay in a profession they love because it pays some of the lowest wages of any service job in the region.

Although each person in the childcare continuum looks at the problem from a different angle, parents, employers, childcare providers, and policymakers all agree on one thing: Childcare in the Hudson Valley is dwindling, expensive, and struggling to remain viable under stress from demographics, economics, and shifting policies.

Over the past year, Pattern examined the underlying causes of our childcare stress in the Hudson Valley to help inform our public discussion about this vital service. We hope the report below will help people understand the practical challenges that are eroding the childcare system, and the policy changes that might make it better for everyone who relies on childcare.

A few notes on data

Before we dive into our analysis of the childcare system in the Hudson Valley, we wanted to share a few important notes about the data we used and some of its limitations.

• The data we analyzed are for the nine counties that are served by Hudson Valley Pattern for Progress - Columbia, Dutchess, Greene, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester. We also collected some statewide data as a basis for comparison between our region and New York as a whole.

• The data we utilized had some limitations, especially when it came to comparing the availability of childcare now to years in the past. In the analysis section that follows, our team utilized two key metrics for analysis - seats and providers. Seats are the maximum number of licensed childcare spots that are available at a given provider. Many childcare providers might be licensed for a certain number of seats, but they often serve fewer children because of other considerations, such as staffing. Still, the number of licensed seats reflects the maximum number of children that could be cared for by each business. Unfortunately, New York could only provide the number of seats for each childcare provider for the year 2023. The Office of Children and Family Services (OCFS) said it did not have those data for prior years. That is why Pattern also analyzed the number of providers in each county throughout the Hudson Valley. Although each childcare provider is licensed for a different number of seats, significant changes in the number of providers can tell us whether the availability of childcare is likely shrinking in certain communities. Pattern worked with the leaders of our region's childcare councils to ensure that our analysis was accurate. Importantly, these leaders noted that licensed childcare providers throughout the region are relatively similar in size. For example, it not common that 10 childcare centers serving 40 children each would be replaced by one large provider that was licensed to care for 400 kids. Therefore, Pattern and the childcare councils felt that our analysis of providers over time was a reasonable analog for licensed seats, given the state's inability to provide more granular data.

• Although we might think of childcare as a service that is provided to children before the enter Kindergarten, the state also licenses care for older children and teens. (Think of afterschool services at the local Boys & Girls Club or YMCA as an example.) To compare communities throughout the region, Pattern used a ratio that examined seats and providers to the number of children under the age of 10 in towns, cities, and counties. We found this to be the most reasonable way to compare the supply of childcare with the likely demand in communities across the Hudson Valley.

• Pattern collected data from 2007, 2010, 2015, 2018 and 2023. Our goal was to bracket major events - including the Great Recession and the Covid-19 pandemic - to see whether these had a measurable impact on the childcare industry in our region.

There are currently 1,685 childcare providers in the Hudson Valley, and those businesses are licensed for a maximum of 82,301 seats. According to the latest data from the U.S. Census, our region is home to approximately 143,000 kids under the age of 5. If every childcare business in the region served the maximum number of kids allowed, there would currently be enough childcare seats for about 58 percent of kids who have not begun primary school.

The 1,685 childcare providers operating in the Hudson Valley in 2023 marks a 27% decline from 2007, when there were 2,308 businesses licensed for childcare in the region.

A similar drop in the number of childcare providers has been seen throughout the State of New York, which has lost 22 percent of its providers since 2007. The chart below shows the rate of decline in providers over time for New York and the Hudson Valley.

Some contraction in statewide and regional childcare would be expected because declining births and the outward migration of young families from New York has driven down the number of kids living in our communities. However, the proportional decrease in childcare businesses has far outpaced the decline in births and the overall population of children under the age of 10 in practically every county throughout the Hudson Valley. Only in Westchester County, where the number of licensed childcare businesses has remained steady since 2007, did the proportion of children decline more than childcare services.

In simple terms, the availability of childcare in the Hudson Valley is declining faster than the number of kids and families who might need it.

Childcare availability and change in counties throughout the Hudson Valley

Mapping the change in childcare throughout the Hudson Valley

To visually interpret how childcare availability has changed over time, Pattern mapped all the licensed childcare business that were operating in the region in 2007, 2010, 2015, 2018, and 2023.

The first map below shows licensed childcare businesses that were operating in 2007 and 2023. The businesses operating in 2007 are shown as large orange dots, and the childcare centers operating in 2023 are shown as smaller black dots. Childcare locations that have remained in operation from 2007-2023 are shown as black dots atop orange dots.

Zoom in on the map to see your home county, town or city. The map includes municipal boundaries to help you interpret how the availability of childcare has changed in your community.

The second map shows the number of childcare providers as a function of the number of children under the age of 10 in every town throughout the Hudson Valley. Towns that are shaded in darker tones of red have relatively few childcare providers (or sometimes none) compared to towns that are shaded in the lighter tones. Some towns that are shaded in dark red might be adequately served if there is black dot in a neighboring town, indicating a childcare provider nearby. But some towns, especially in the more rural parts of our region, have the challenge of zero childcare offerings in their town and a long drive to the nearest provider.

Cities in the Hudson Valley

By looking at the maps above, it might appear that the closure of licensed childcare centers throughout the region is largely a rural problem. However, childcare has also dwindled in most of our small cities. Eight of the region's 13 cities have also seen a significant drop in the number of childcare businesses.

The following section examines some of the factors that have caused or exacerbated our childcare scarcity in the Hudson Valley.

Long-term trend toward fewer kids

Well-established demographic trends in the Hudson Valley point toward a future with fewer and fewer children in our communities. On a macro level, the latest data from the state Department of Health show that the average household in New York now has 1.55 children. That is far lower than the so-called replacement birth rate of 2.1, the number of births needed to keep statewide and regional populations perfectly flat. Our current birth rate portends population decline in the decades ahead.

Pattern documented data related to the birth rate, annual births, and school district populations in our recent report The Great People Shortage and its Effects on the Hudson Valley.  Click here to view a copy of that report. 

The latest data from the U.S. Census Bureau underscore our trend toward fewer children in the Hudson Valley. Pattern analyzed age cohorts from 2010 and 2022 to compare the number of infants and children in our region - the population that is most likely to need childcare.

The Hudson Valley is home to nearly 28,000 fewer children now than in 2010, as lower birth rates and the outward migration of families has significantly reduced the number of kids who need childcare in our communities.

It is important to note that our neighbors in year-round Orthodox Jewish communities tend to skew the data in their host counties, specifically Orange, Rockland and Sullivan. Rockland County is the most obvious example. The Town of Ramapo, home to most of Rockland’s Orthodox communities, saw its births increase by 41% from 2002-2015. Births in the other four towns in Rockland declined by 10-32% during that time. The same is true in Orange County, where births in the Village of Kiryas Joel increased by 84% but births in practically all the remaining towns in the county declined by double-digit percentages. Our Orthodox neighbors are having children in much greater numbers than other parts of the Hudson Valley, but they also have relatively few licensed childcare facilities because they rely on different social support structures to care for their kids.

As we noted above, licensed childcare businesses are closing at a faster rate than the decline of the population they serve. Only Westchester County defies this trend. The county has seen its population of infants and children decline by 8%, but the number of childcare businesses operating within the county has remained flat.

The steady population decline among infants and children in the Hudson Valley will yield a lower demand for childcare in the future, making it more difficult for many providers to keep their doors open to those who still need the service.

The unintended consequences of universal pre-K

The universal pre-kindergarten (UPK) program in New York has been one of the state's most significant educational advancements of the past decade. Volumes of research have shown that UPK helps kids to read earlier, socialize better, and improve their outcomes for a wide range of factors related to income, health, crime, and more. The UPK program in New York, which began in 2014 and has spread to practically all parts of the state, opened access to early learning for thousands of children whose families might not afford it or find it near their homes if the state did not create and fund the program.

The design and implementation of the UPK program, however, has unintentionally wounded the business model that private childcare businesses relied on to keep their doors open. Childcare experts, daycare providers, and local school districts told Pattern that UPK exacerbated the closure of childcare centers throughout the Hudson Valley by removing a large proportion of 4-year-old kids and shifting them into publicly funded programs run by school districts, BOCES and other providers. Because childcare businesses relied on 4-year-olds as an important segment of their revenue, UPK programs have incidentally hastened the closure of childcare centers and exacerbated the loss of care for infants and toddlers.

To understand the effect of UPK on childcare businesses, we must look at three core factors - childcare ratios, the allocation of public funds to compete with private businesses, and the program design for UPK in New York.

Ratios: It is first important to learn how childcare centers made revenue to pay for their staff, facilities, and other costs. This comes down to ratios and the expense associated with caring for children in different age groups. Infants are the most expensive children to care for because state regulations require licensed providers to have one staff member for every four infants. By the time children reach 4, that ratio increases to one staff member for every 8 children. That means childcare businesses make roughly twice the revenue from each 4-year-old compared to each infant, making the older kids an especially important source of revenue for their businesses.

As a consequence, the creation and expansion of UPK in New York weakened the financial foundation of childcare businesses by moving the children with the largest revenue margin into a free-of-charge, publicly funded model of care and education.

Throughout New York, 155,512 children ages 3 and 4 were enrolled in UPK during the 2022-2023 school years. That number comprises 77.45% of all 4-year-old children in the state. Of those, approximately 52,000 are being cared for and educated in a public school, BOCES, or other facilities that did not previously offer services for them. That means childcare centers, nursery schools, and family daycare providers have lost approximately one-third of the market that helped to keep them in business. In the Hudson Valley, 12,111 children ages 3 and 4 are enrolled in UPK.

Allocation of public funds:  The State of New York is now investing approximately $1 billion annually to fund UPK , creating thousands of slots for full-day care and education that is free of charge to parents and guardians. Research supports the wisdom behind this investment.  Studies have shown that for every dollar spent on early childhood education, there is a 13% year-over-year return on investment  because of a wide variety of beneficial life outcomes, such as health, crime, income, IQ, schooling, and the increase in the labor participation rate of mothers.

The public investment has established UPK as a free service for most 4-year-old children in New York, assuming that providers in a given school district have enough slots to accommodate all their children. (Some districts and their partners do not have enough slots, and therefore a certain proportion of children and their families must still pay for care through a traditional childcare center.) Traditional childcare - at an approximate cost of $1,200 per month - simply cannot compete with free, publicly funded UPK.

UPK program design in New York: The design of the UPK program in New York, to some degree, acknowledges that UPK brought financial hardship to childcare providers. Here is a brief explanation of how UPK works in our state:

Public school districts are the hubs of UPK in New York. Most school districts receive funds from the state to administer UPK and ensure compliance with rules that govern the program. However, New York's program encourages school districts to work with certified community partners or "collaborators" to provide UPK as a service within the district boundaries. These partners can include childcare businesses, daycare centers, churches, libraries, and others.

In fact, the UPK program in New York requires school districts to solicit for community partners that can run all or part of the UPK program for the district. Each year, school districts are required to seek out qualified partners that have certified teachers to provide UPK for 4-year-old children in the district. (Uncertified staff can also be used, but the state reimbursement rate drops from $10,000 to $7,000 per child when UPK is provided by uncertified teachers.) The district then uses the state funding it received to hire these private businesses or nonprofits to provide the UPK service.

The state's requirement to use a portion of the UPK money to hire community-based organizations and collaborators was clearly aimed at preserving the private market for childcare, while also reducing some of the staff-and-space burden on school districts. In fact, several years after the UPK program began,  the Education Commissioner's Regulations Part 151-1.4(c) was amended  to require that school districts spend at least 10 percent of their UPK funds to hire local, qualified partners from the community. The law specifically articulates a desire "to ensure that services are provided in an efficient and non-duplicative manner." In other words, New York wanted to reduce the likelihood that its publicly funded program would duplicate, and put out of business, the private and nonprofit group that were already providing care for 4-year-old children.

The Education Commissioner's directive came shortly  after the publication of a 2019 study by researchers from Cornell University and Skidmore College , who utilized a statistical analysis to show that UPK, especially in poor and rural communities throughout New York, was already contributing to the decline in care for infants and toddlers. The study, published in Early Childhood Research Quarterly, reached the following conclusion:

"In particular, we found that in non-urban communities that implement public prekindergarten, capacity for infant and toddler child care has declined over time with the negative impact greatest in rural communities. Thus, communities that saw implementation of public prekindergarten, a program for 4-year-old children, also saw declines in the childcare capacity for younger children. One explanation for this decline stems from the typical way child care programs finance their business. Care for infants and toddlers, which is more expensive due to required higher staffing ratios, is partially subsidized by fees for preschool age children. If 4-year-old children leave child care to attend a free (for parents) prekindergarten program, revenue for the child care business as a whole can decline and lead to program closure and thus a decline in slots of infant and toddler childcare. Such scenarios are more likely in rural communities where smaller populations means small shifts in enrollment can have large impacts. It is important to note that this finding was most pronounced for rural areas, and less evident in locales with larger populations. As such, analyses conducted with state-level data that do not account for locale, could potentially miss these individual community level patterns."

Subsequent research and studies have found that public funding of UPK, by states and the federal government, has reduced the  availability of childcare more broadly.  In New York City, UPK is provided by privately owned businesses and public schools, with private providers being compensated by the government for enrolling students. When the city expanded its UPK program in 2014, existing childcare programs that previously offered toddler and infant seats raced to serve the pool of UPK students that grew significantly because of public funding. (The number of New York City children in UPK grew from 19,000 to 70,000 in just a few years because the program made care available free of charge.) This led to fewer spots for children ages 2 and under at licensed childcare providers. Studies found this quick and significant shift in the childcare market has the greatest  impact on minorities and lower-income households .

Although New York's UPK program tries to encourage school districts to procure the service from community partners, the program rules also provide an exit ramp for districts in which a viable partner cannot be found. School districts can get a waiver from the 10% rule and keep all the UPK funding if they show one of four things:

• There were no potential collaborators within the district boundaries.
• Potential collaborators were not interested and declined the opportunity to partner.
• Potential collaborators were unable or unwilling to comply with UPK requirements, or they had a poor health and safety record.
• No potential collaborators responded to the district outreach efforts.

School districts that sought to keep most or all of the funding are required to fill out a "Prekindergarten Variance from Collaboration" form. This potentially allows the districts to keep most or all of the state funding and operate UPK in its school facilities with district staff.

Protected and dissuaded by strict regulations?

It is difficult to objectively measure the effect that childcare regulations in New York have the ability of childcare businesses to get started or remain open. But practically every interview conducted for this study eventually turned to the subject of childcare regulations.

Regulators at OCFS were clear in their view that thoughtful regulations and steady enforcement yield quality care. But childcare providers, advocates and business owners said they were suffering under the growing burden of regulations, including what they alleged was subjective or uneven enforcement. They said that compliance with state regulations often takes the focus away from common sense, the warmth of good care, and the best pedagogical methods for early-childhood education.

In other words, childcare regulations in New York are a point of pride and tension within the system.

Leaders from the OCFS Division of Child Care Services expressed pride and a deep sense of responsibility when Pattern interviewed them about the state's regulations for childcare. Broadly speaking, the state's regulations are meant to protect the health and safety of children who are in the care of licensed providers, and ensure they are receiving an education from qualified, well-vetted professionals. The state does that through a hefty system of licensing, inspection, and regulation on anything from door sizes and employee background checks, to staffing ratios and food allergies. The standards for childcare licensing in New York are so rigorous that  the state became the first to be automatically approved by the U.S. Department of Defense (DOD) for federal military childcare assistance under the Military Child Care in Your Neighborhood PLUS program . Federal authorities cited high licensing requirements in New York, including health and safety standards, background checks for providers, and other factors for the pre-approved status by the DOD.

Still, childcare providers and advocates said the ever-changing regulations and unpredictable enforcement make it difficult to start a childcare business or keep one open. In 2023, the childcare council that includes providers in Columbia, Greene and Ulster counties surveyed all childcare businesses that had shuttered since 2019 to understand their reasons for closing. Along with lagging revenues and the cost of payroll and healthcare, 8 of 35 childcare centers who took the survey cited New York's regulations as a factor in their decision to close.

More than a dozen childcare providers shared their regulatory headaches with Pattern. Many of their stories focused on allegations of subjective enforcement. For example, one childcare center in Dutchess County had no citations for its space until a new inspector from OCFS criticized one of its classrooms for being 4 square feet short of the requirements for space. Consequentially, the center had to hire a carpenter slightly expand the room by removing the door and walls from a closet. Other providers told similar stories about the inconsistent application of regulations related to door heights, window widths, and other standards that focus on the building or classroom.

Several regional businesses interviewed by Pattern said they pursued the creation of in-house childcare for the kids of their employees, but regulations turned them away in every instance. Even when these large businesses had adequate room - often with locked doors and the right number of entrances and exits - regulations on space and other licensing considerations turned them away, they said. One business noted that several of the state's economic development programs are giving a competitive advantage to development projects that will increase childcare availability throughout the region and the state. But, the business said, the call for more childcare has not been met by a review of regulations that often dissuade businesses and entrepreneurs from starting care centers that are safe, nurturing, and available to employees in need.

Another childcare operator said there was growing tension between the state's regulations on staffing ratios, and the significant turnover in childcare staff due to extremely low wages. Childcare businesses must maintain a certain number of employees in each room, based on the number of kids and their age, to stay open. But businesses run the risk of not staying in compliance, and potentially closing temporarily or permanently, if they lose just a few employees. This is somewhat common. The Bureau of Labor Statistics said that childcare has one highest turnover rates of any industry in the nation, with nearly 20% of employees leaving childcare businesses each year. Local providers said this is becoming a more common threat to the viability of their businesses.

In any industry, the balance between regulators and operators can be delicate. That is especially true for childcare in New York, where the state is at once responsible for protecting the health and safety of children while not exacerbating the downward spiral of an industry that is struggling under the weight of demographics, economics, and other factors. As we underscore in the recommendations at the end of this study, New York's childcare regulations should be analyzed and adjusted every few years to make the service safe, effective, and easier to operate.

The financial landscape for childcare is a particular point of stress for those who need the service and the workers who provide it.

The cost of childcare is an especially large financial burden for young families who need it. In fact, childcare generally outpaces housing, transportation, food, and college debt as the single largest household expense for families with two children. The high cost - averaging $12,000 to $15,000 annually across the Hudson Valley for one child - can hamper a family's ability to save or spend on other goods and services, such as buying a house.

However, the high cost of childcare is met by another reality: the people who work in childcare, mostly women, are paid some of the lowest wages of any service-sector employees in the Hudson Valley. The average wage is low enough that many childcare workers qualify for food assistance, housing vouchers, home heating subsidies, and other social service programs.

Pattern examined the data that underscore this tension between the high cost of childcare and the low wages for its workers.

The high cost of childcare

The U.S. Department of Health and Human Services said that childcare should not cost a family more than 7% of its annual income. In 2022, the national annual average price of childcare was $10,853 for one child, or approximately 10% of the median income for a two-income household. For single parents in the United States, typical childcare costs accounted for about 33% of their median income, according to data from Childcare Aware of America (CCAoA), the leading nonprofit that studies childcare issues.

The cost in New York accounts for a higher proportion of median incomes. Center-based childcare in New York (including NYC) comprises 18% of the median earnings for a two-income household, and it accounts for 63% of the income for a single parent or guardian.

Pattern examined the cost of childcare in the Hudson Valley by using weekly market rate data that were collected in 2022 by OCFS. These data were paired with county-by-county median income data to examine the typical cost of childcare for a two-income household with one child. In every county, the average annual costs exceeded the federal standard of spending 7% or less on childcare. The median-earning household in the Hudson Valley spend approximately 13-15% of its income on childcare for one child.

The data in the chart above should be understood with a few important caveats. Because the chart reflects costs for a median-earning family with one child, it does not accurately depict the cost burden of every household with children in the Hudson Valley. There are three important things to consider:

• Although birth rates have steadily declined, the Department of Health reports that an average family in our state has 1.55 children. That means many families have multiple kids in childcare at one time. Although childcare providers generally offer a small discount for families with multiple kids, it is important to acknowledge that the costs listed above are nearly double for many of our neighbors in the Hudson Valley.

• The situation is even more dire for single parents, who are likely to pay a larger proportion of their income for childcare and might have a more pressing need for the service to help them get to work.

• The chart above calculates the financial burden of childcare based on median wages. Half our neighbors make less than median wages. That is especially true for young households who are just starting their families and their careers, and often make less than the median wage for the county in which they live. This also means that a greater proportion of their income goes toward childcare early in their working lives.

Because of these factors and others, data that rely on medians or averages can tell a story about childcare that is different from the experience of those who utilize the service.

Childcare often competes with other financial priorities that burden households. For example, many young families are trying to save for the downpayment and closing costs associated with buying a home. Those costs average about $20,000 to $40,000 for a median-priced home in the Hudson Valley in 2023. Many people in this population, ages 25-35, are also responsible for repaying their college loans. The Federal Reserve Bank of New York said the average student loan monthly payment for borrowers in our state is $393. According to the Education Data Initiative, the average student loan debt for borrowers in New York State is $37,678, and 56.4% of all college debt in the state belongs to people under the age of 35. What's more, the monthly cost of food has risen to $1,073 for a family of four in the Poughkeepsie-Newburgh-Middletown metropolitan area.

For a college-educated, two-income household, data show that childcare and college debt generally account for more than $3,000 in monthly expenses. These costs represent a significant financial burden, and they can hamper, or even prevent, young families from saving the money necessary to buy a home.

Childcare workers face dismal wages

Childcare workers make some of the lowest wages of any service workers in the Hudson Valley, averaging in the low $30,000s per year. Childcare experts said that low pay makes it difficult to recruit childcare workers, contributes to high turnover among staff in childcare centers, and often leads to lagging morale among workers who chose to dedicate their lives to a high and worthy cause - early childhood education.

Here are some essential facts about the trusted and valued workers who educate and care for our youngest children in the Hudson Valley.

• The federal Bureau of Labor Statistics said the State of New York has the second largest number of childcare workers in the country, with approximately 39,890 employed by the industry. There are an estimated 945,000 people employed by childcare businesses nationwide.
• In 2022, the hourly mean wage of a childcare worker in New York was $16.92 per hour, and the annual mean wage was $35,190, according to the bureau. The national median wage was $13.71 dollars per hour, or $28,520, according to federal data.
• In the Hudson Valley, the annual wages for a childcare workers range from $31,980 to $35,670.
• The average pay is so low that many childcare workers will likely be affected by New York's adjustments to the minimum wage, which will move upward in 2025 and 2026 to a total of $17 per hour downstate, and $16 per hour in the remainder of the state.
• The Bureau of Labor Statistics said that more than 16% of the labor force in childcare turns over each year because people employed in the industry seek out jobs with better wages.
• Nationally,  women comprise 97% of people working in the childcare sector . The employee base in childcare is more diverse than the generation population, with 38% of all workers being women of color. (National Survey of Early Care and Education)
• Nationally, of the female workforce in childcare, 57.8% were non-Hispanic white women, 16.7% were non-Hispanic Black women, 16.4% were Hispanic women, 3.1% were multicultural respondents, and 2.7% were Asian women ( NSECE ).

Because childcare workers are some of the lowest paid service workers in the nation, they also have a particularly  high poverty rate.   A total of 53% of childcare workers’ families were enrolled in at least one public assistance program, compared to 21% of families across the nation's entire workforce.

These inequities were exacerbated by the COVID-19 pandemic. In December 2020,  25% of childcare centers and 33% of family childcare  homes reported that if their enrollment did not increase, and if they did not receive sufficient funding, they would be forced to close within three months. Among child care programs owned by people of color, this number increased to  51% of programs would have to close because of inadequate funding and pay.  

The State of New York has offered financial assistance to help families pay for the high cost of childcare, but Pattern found that relatively few families that qualify for public assistance actually apply and receive it.

Most recently, the State of New York began to expand subsidies to households that needed childcare in 2021. This was funded through federal money that flowed into the state from three programs, the Coronavirus Aid, Relief, and Economic Security Act (CARES); Coronavirus Response and Relief Supplemental Appropriation Act (CRRSAA); and the American Rescue Plan Act, which led to the Child Care Stabilization Program.

As of March 2023, the state had spent all its funding from the CARES Act, about half its CRRSAA funding, and nearly all its ARPA Child Care Stabilization funding. New York expects to liquidate the unspent ARPA supplemental funding by 2024 to meet a federal deadline for spending the money  (Center for Law and Social Policy).  A total of 1,327 childcare providers received ARPA funds in the nine-county area of the Hudson Valley. Half of them were in Westchester County. (More facts on ARPA funding can be found  here ). Politicians have expressed concern that the expiration of ARPA funds could further exacerbate the closure of childcare businesses throughout New York.

Much of this funding was funneled through an existing statewide subsidy program known as the New York State Child Care Assistant Program (CCAP). Conceptually, CCAP should have reached thousands more households in the Hudson Valley because the qualifying income limits for the program were relatively high compared to other social services. For example, a family of four would qualify for CCAP if the household earned less than $99,250. (That's lower than the median wage for six of the counties in Pattern's service area.)

However, the effectiveness of CCAP has been hampered by a number of problems related to marketing, implementation, and ease of use. These problems resulted in less than 50 percent of the support money being used by eligible families in the Hudson Valley in 2022.

The application process for the expanded CCAP was left to the counties in New York, who generally administered it through their social service departments. According to the counties, regional childcare councils, and childcare businesses, this model did not maximize the reach and effect of assistance through CCAP for several reasons.

• The CCAP was not accompanied by a robust marketing program to reach all who qualified for the subsidies. Instead, according to those who helped administer the funds, people tended to learn about CCAP if they were in touch with their county social service departments for other forms of help. This meant that households in the majority of the qualifying income range for the program were less likely to learn about the assistance program.
• The application process was not the same in all places. Some counties required CCAP applicants to fill out a universal application for all social services. Some required paper applications and supporting documents. Some required specific forms of identification to go along with the application. Some childcare councils offered assistance, while other did not. Pattern even found that some website links and service hotlines were inactive in 2022 and 2023.
• Language barriers existed when navigating websites and some of the paper applications.
• When applications were submitted with incomplete fields or missing documentation, the application was sometimes returned back to the applicant via postal mail, creating long and unnecessary delays.
• Childcare providers told Pattern that they experienced difficulties when accepting the assistance, including long wait times for the funding. Some said it took as long as three months to be reimbursed for the care they provided. Many could not afford the carrying costs, including salaries and benefits, to wait that long for reimbursement.
• In recognition of these difficulties, the New York State budget for 2023-2024 took the responsibility for CCAP away from counties by creating an electronic system to pre-screen for eligibility, apply for childcare assistance, and remove an unnecessary reporting requirements that counties were placing on families. A press release said the move aimed to "dramatically increase the number of applications completed successfully."

The availability and affordability of childcare is a top-tier issue for employers in the Hudson Valley. When Empire State Development and the Department of Labor surveyed employers statewide in 2023, business owners in the Mid-Hudson Valley listed childcare as the No. 1 support service that they need but are unable to provide. For our region, the need for childcare outpaced transportation, tuition support and mental health services.

Childcare is a critical wraparound service for our workforce in the Hudson Valley, especially as our year-round labor pool shrinks in the years and decades ahead. In 2023, research by Pattern for Progress found that the Hudson Valley's prime working-age cohorts are getting smaller. The older half of our labor pool (ages 45-64) outnumbers the younger half (ages 25-44) by approximately 100,000 people. Data indicate this imbalance will become worse by at least 30,000 people as smaller cohorts of children and teens move into their working ages. This means that labor participation - the proportion of people who actively participate in the workforce by seeking or holding a job - will need to increase over time. Experts noted that an inadequate supply of affordable childcare would be one major impediment for people, especially women, who want to participate in the labor force.

Regional employers interviewed by Pattern shared several stories to underscore how childcare availability and costs were affecting their employees.

Many said that the cost of childcare caused them to lose employees. One Ulster County manufacturing company explained that an administrative aid making $25 per hour chose to quit her job after maternity leave because she discovered that childcare would gobble up nearly half her salary. Others noted that childcare availability was also an impasse for hiring. A local government in Sullivan County explained that it was rebuffed by two of its top candidates for a civil service job because neither could find open childcare slots for their children. And several employers talked about losing second-shift workers because practically zero childcare was available after 5 p.m.

Our challenges in the Hudson Valley reflect the broader impacts of childcare availability and cost that are felt by businesses throughout the United States.  A study by the U.S. Chamber of Commerce  found that 62% of businesses cited childcare as a factor for losing at least one employee; 33% of businesses said that childcare issues factored "a great deal" into the loss of productivity by employees; and 66% of businesses expressed a willingness to increase childcare supports.

 A study by the Federal Reserve underscored other facts about childcare and the workforce :

• About 1 in 10 Americans have a child under the age of 5 who requires caregiving.
• 53% of adults ages 25-54 working in the United States are working parents.
• Of those, 37% of working parents have young children. The proportion of working parents with young children is 38% in New York.
• Parenthood boosts the labor participation for young men, but it depresses the labor force participation for women. A total of 79% and 84% of childless women and men, respectively, participate in the labor force. But those figures drop to 67% for young mothers, and rise to 94% for fathers with young children.

Data show that childcare difficulties have a disproportionate effect on women, 80% of whom become mothers at some point during their lives. The effect of childcare scarcity was particularly hard on working mothers during the pandemic. An estimated 16,000 childcare facilities shut down during the pandemic, according to the Bureau of Labor Statistics.  That was met by more than 1.3 million women leaving the workplace to care for their children, dropping the labor participation rate among women to the lowest it had been since the 1980 s.

Fortunately, a strong post-pandemic economy and federal investments in childcare allowed working mothers to re-enter the labor force in droves in 2022 and 2023. A 2023 study by the Center for American Progress found that nearly 1 million more mothers were participating in the workforce compared to the previous year. However, the same study found that working mothers were about 5 to 8 times more likely to have their work disrupted by caregiving problems than working men.

All these data roll up to an essential fact: an ample quantity of affordable childcare is necessary for any region, including the Hudson Valley, to support a productive workforce.

That's why many employers interviewed by Pattern were looking for a solution to alleviate the cost and logistical pressures on working parents, especially working mothers. Several employers had explored the possibility of offering a childcare stiped as a fringe benefit to employees, but they were also concerned about the cost and whether enough childcare seats would be available for employees to use the benefit. Others had explored opening in-house childcare for their employees, only to find that the difficulty of regulatory compliance and costs outweighed the potential benefits.

As the Hudson Valley and New York consider options to support our childcare system, it can often help to examine other systems of childcare governance from across the country and the world.

The childcare systems in each state across the United States are relatively similar. Childcare across the nation is generally provided by a private market of businesses, along with some nonprofits (i.e. Head Start or Boys & Girls Clubs) that receive grants from the federal government or local governments to support their operations. However, each state varies in its eligibility for childcare subsidies based on state rules that apply to federal funding.

• The U.S. Department of Health and Human Services maintains data for Estimates  of Child Care Eligibility . An estimated 10.9 million children were potentially eligible for subsidies during 2020, representing about 21% of the 52 million children between the ages of 0 to 12. 

• During 2020, the most recent year that data are available, 2 million children throughout the United States received childcare subsidies, representing 18 percent of those who were eligible under the federal rules and 26 percent under the state rules. (States are permitted to set their own rules for eligibility based on income, along with co-payments, maximum reimbursements and other rules.)

• In New York an estimated 646,460 children were eligible for subsidies under the federal rules. The state's rules reduced that cohort to 398,930 children whose families were eligible for public support. 

• New York State's population of children in 2019 was roughly  4.1 million . Under federal parameters, 15.8% of children would be eligible for subsidies, but that number shrinks to 9.7% when the state's rules are applied to the federal programs.

Comparing Countries

The United States provides significantly lower levels of financial support for the care and education of young children than other developed countries across the world.

The Organization for Economic Co-Operation and Development (OECD) comprises 38 member countries, including the United States, who share the goal of building policies for better lives. OECD tracks the spending of each country on early childhood education and childcare. Only four countries spend less on early-childhood development and care than the United States, and our country is among only six (including Colombia, Costa Rica, Ireland, Portugal, and Türkiye) who spend less than 0.5% of GDP on care.

• In addition to greater public spending on childcare, other countries also have different systems to control the cost of childcare for families who need it. The United States allows tax deductions for childcare costs. The child and dependent care tax credit is generally worth 20% to 35% of up to $3,000 for one qualifying child, or $6,000 for two or more qualifying children. This means that the maximum child and dependent care credit is $1,050 for one child $2,100 for two or more children. That is approximately 10% of the total annual cost for a family who needs childcare.
• Other countries offer a much larger tax credit. For example, in  France  parents receive up to 85% of the cost of certain forms of childcare.
• In  Denmark , all children from the age of 2 are guaranteed a spot and parents pay no more than 25% of the costs for childcare. Their guaranteed spot is good until they are 10 years old. This system ensures both availability and affordability for parents.

Many countries have debated the value of universal childcare and whether the return on investment - in the form of education outcomes, worker productivity, increased payroll taxes, and other metrics - is worth the investment by society.

Most noted for their universal childcare system is Canada and the Scandanavian countries in Europe, in which all children are eligible for subsidized care regardless of a household's income level. The debate about public investment in childcare generally hinges on the question of who should be eligible. Researchers and policymakers in the United States and other countries have suggested that public dollars should only support low- and moderate-income families, as they generally experience a greater struggle to afford care.

To address that question, a 2015 study in Norway examined the outcomes of its childcare system dating back to 1975, when the country implemented universal childcare. The study compared children before and after the 1975 reforms, tracking a range of outcomes through their adulthood. The study found a positive average impact of universal childcare on educational achievement. Most of the educational improvement came from a significant increase in the likelihood of completing high school, largely driven by a greater quantity of lower-income families who had access to early childhood education. No significant change was found among upper-income families.

The increase in high school graduation rates among children from lower-income families was matched by an increase in earnings. The study concluded that universal childcare in Norway substantially increased intergenerational income mobility.

Regulators and childcare advocates in New York have also examined the so-called Quebec Model from Canada, a heavily subsidized system of childcare that began in 1996. It centered on a few core goals: making childcare accessible and affordable for all, allowing more women to join the workforce, increasing childhood development and social skills, and raising revenue for the government through increased payroll taxes. (Experts widely agree that the program has been a huge success for working moms, as Quebec has an 86% labor participation rate among women ages 26-44, the highest in the world. Economists found that the childcare subsidy program in Quebec paid for itself because of the payroll taxes that were collected through greater labor participation among working parents, especially mothers.)

In the simplest terms, the system of universal childcare in Quebec works in two ways. Parents can earn a spot in a government subsidized childcare center and pay a fee that is similar to a co-pay, about $10 per day. The public system in Quebec, however, does not have enough seats to meet the demand for all its children. It relies on private providers to bridge the gap, albeit with a different kind of subsidy. Whereas public centers are directly subsidized by public funding, parents of children in private facilities must pay the entire cost upfront and receive a large tax rebate at the end of the year.  The system in Quebec has been so successful that other provinces in Canada have moved toward a similar scheme of public funding to support their kids, businesses, and working moms . However, some studies have also underscored that publicly funded systems,  including the one in Quebec , can suffer from overcrowding and questions about the quality of early childhood education.

As we examined the state of childcare in the Hudson Valley, Pattern was fortunate to have input from people who are knowledgeable and passionate about childcare in New York, access to data about the current state of our system, and strong evidence from studies that came before ours.

All the information we compiled pointed toward one essential truth: Childcare in New York will continue to whither unless we pursue evidence-based solutions to preserve broad access to early-childhood education and secure pathways to labor participation, especially for working mothers.

Our study reached five conclusions and recommendations that should be carried forward by those who have the passion and authority to shape our childcare system.

• New York State will likely need to subsidize childcare through a program similar to the Quebec model or risk the private-sector service disappearing under the combined weight of demographics, economics, and public funding for UPK. Advocates have pointed toward many options. The state could expand its funding model for UPK to include children ages 1 and up. It could copy the Quebec Model and establish publicly funded centers throughout the state. Some suggested a "one-third" model that would split the cost of childcare to be paid one-third by the state, one-third by employers, and one-third by families. Others suggested a sliding scale that guaranteed different levels of support based on household incomes. The state should identify a range of viable options for public support, commit the time and expertise to studying their costs and benefits, and move toward a plan to preserve access and affordability for parents and guardians. Importantly, any publicly funded system should ensure that childcare workers are paid a living wage to stabilize the volatile workforce that provides this service.

• The state should study the financial implications of UPK on the childcare system, especially in the post-pandemic years. Quantitative and qualitative information suggest that UPK has exacerbated the closure of private childcare centers by transferring a large proportion of 4-year-old kids into free, publicly funded care at other locations. While pre-pandemic statistical models found the UPK incidentally reduced access to care for kids ages 0-3 in rural parts of New York, a fresh analysis would help state lawmakers understand the unintended consequences of this important policy decision and how to allay them.

• The existing system of New York subsidies for childcare needs to be improved. If the Child Care Assistant Program (CCAP) continues in New York, there are several improvements that should be made to increase its reach and impact. Many of them are related to marketing. For example, the state might offer "childcare scholarships" instead of subsidies or assistance. (Westchester County funded its own support program that provides "childcare scholarships" to people who need of assistance.) New York should also explore new ways to reach people who qualify for childcare assistance, given the lagging utilization of CCAP funds in the Hudson Valley. The methods used up till now have failed to reach untold thousands of qualifying families. Information about this helpful program should be included in birth packets that are handed out to new parents, and by pediatricians at annual physical appointments for kids ages 4 and under.

• Utilize the state's existing childcare task force - or a dedicated commission whose recommendations would be binding by a two-thirds vote of members- to update childcare regulations in ways that would continue to protect the health and safety of kids while making it easier to start and operate daycare centers of various types. This commission should start by tackling a topic that is central to achieving Gov. Hochul's push for more childcare in New York. It should examine the effects of staff-to-child ratios and regulations that govern physical space, paying special attention to whether these important regulations hamper the viability of childcare businesses or unreasonably prevent employer-hosted childcare. The state should establish a special pilot or trial program to allow a limited number of employers to host childcare for their workers outside the governing strictures of existing regulations but with special monitoring to see how it works. The pilot program could be designed by OCFS, the childcare task force, and with input from businesses across the state. The state should also expand the scope of the OCFS Office of the Ombudsman to include the authority to settle disputes about regulatory enforcement. In light of allegations about uneven and subjective enforcement, the ombudsman office could act as a well-trained referee to ensure steady, equitable enforcement.

Lastly, the state needs more programs to support professionals who are passionate about early childhood education, training them well and highlighting viable career pathways to earn a living wage. The Hudson Valley is fortunate to have a nonprofit center that is nationally renowned for doing this work.

Day One Early Learning is a nonprofit in Poughkeepsie that has been training the next generation of childcare providers, and caring for local kids, since 2018. The center was started by teachers, developmental psychologists, and other professionals who were concerned about the lack of high-quality childcare in greater Poughkeepsie. They were also concerned about the lack of a training pipeline for early childhood educators and support for working parents.

Day One's mission is centered on its Teaching Apprenticeship Program (TAP). The 11-week program provides intensive, hands-on training to those who want to teach in early-childhood classrooms. Those who enroll in the program can have a high school diploma or GED. Day One said the only true pre-requisites are a desire to learn and passion for educating kids. The nonprofit provides its apprentices with valuable support. Those who are trained by the program are eligible for a $500-per-week stipend, and they participate in daily sessions with instructors to reflect on their work and discuss caring for themselves. Day One said these supports are important because too many early-childhood educators work multiple jobs and struggle with depression. Supporting them financially and emotionally is a key element of the program, which has graduated about 50 new educators, including several who have opened their own childcare businesses. Those entrepreneurs are also supported through training about getting a state license, business accounting, and other skills.

Day One aims to train more than 200 early-childhood educators to serve kids and families in Dutchess and Ulster counties. It has already provided affordable childcare for hundreds of kids in Poughkeepsie, helping thousands of working parents get back to work.

By training and supporting the next generation of early-childhood teachers, Day One is hoping that it can alleviate some of the troubles that are pervading the childcare system in the Hudson Valley now.

"Ultimately, we want to make this a program that can go into any community," Day One co-founder Julie Riess said. "In our country it is still too often about babysitting. We are focused on training teachers who are passionate about early childhood education and supporting and bonding those teachers through their high-quality work."

Pattern would also like to recognize the special contributions made by the leaders of our childcare councils throughout the Hudson Valley. The executive directors of the childcare councils served as an advisory group for this project, helping Pattern's research team to sort through key issues, understand terminology, collect data, and so much more.

We extend our appreciation to the following advisory group members:

Rachel Ambroziak, executive director of the Child Care Council of Orange County

Jane Brown, interim executive director of Child Care Resources of Rockland

Kathy Halas, executive director of the Child Care Council of Westchester

Jeanne Wagner, executive director of the Child Care Council of Dutchess and Putnam

Donna Willi, executive director of the Sullivan County Child Care Council

Kerry Wolfeil, team leader for Child Care Services, serving Columbia, Greene and Ulster counties