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State to distribute $80M to childcare providers grappling with shortages, costs

The state Department of Human Services says another $13 million will be available in August.
Published: Jun. 22, 2022 at 4:50 PM HST|Updated: Jun. 22, 2022 at 5:07 PM HST
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HONOLULU (HawaiiNewsNow) - After more than two years of struggling with lower enrollment and staff shortages, Hawaii’s childcare providers are getting some much-needed relief.

The state Department of Human Services is distributing about $80 million to childcare providers to help stabilize their businesses during the pandemic.

During the pandemic, thousands of parents struggled to find childcare, with services drastically reduced due to COVID restrictions and staff shortages.

Now money from the American Rescue Plan Act is giving hope to childcare providers and the families.

Like all businesses during the pandemic, the childcare industry suffered heavy economic losses. Some centers were forced to close.

“From January 2020 to May 2022, there’s been an almost 10% decrease in DHS childcare homes and center based providers,” said DHS Director Cathy Betts. “And a lot of the providers experienced stressful periods, just like the rest of us during this pandemic.”

“They have to maintain lower staff, child ratios, group sizes to minimize exposure to the virus.”

About 76% of the state’s licensed providers applied for the federal Childcare Stabilization Grant.

So far $58 million has gone to help 332 providers with recovery through retention bonuses, salary increases, and money for operational costs and personal protective equipment. That averages out to about $175,000 per provider.

More than 3,000 employees received a retention bonus.

Rainbow School gave out $2,500 to each staff member, which helped keep the business open.

“You see the fatigue and the employees with the additional health and safety requirements, and then the rising COVID. And then again, like I said, the rise in food and gas costs,” said Cindy Barley, executive director of Rainbow School.

Barley says the grant offsets lower enrollment.

Pre-pandemic, they had 340 children across their five Oahu locations. Now it’s down to 270.

But hiring new employees is a challenge, even with increased pay.

“We found that some people have moved to the mainland or just changed the industry that they were. They’re working in something totally different from childcare,” Barley said.

That’s also a challenge for the YWCA Hawaii Island in downtown Hilo. But by investing in a career ladder and living wage for workers, they’re working to change that.

“It’s helped us to retain about more than 20 employees,” said Kathleen McGilvray, CEO of YWCA Hawaii Island.

“We were able to provide immediate retention bonuses for that these teachers were showing up at work and to support keiki throughout the pandemic.”

The grant also helps keep the cost of childcare low for Big Island families, many of whom work in essential industries.

“We really wanted to make sure that we can help them to get to work in those critical jobs so that all of us can be safe in our community,” she said.

DHS says another $13 million will be available in August, which can be used for mental health programs for employees and children.

And with keiki under 5 years old now eligible for the COVID vaccine, childcare providers hope enrollment will rebound as more families will feel safer enrolling in preschool.

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