The Child Care Business Podcast
The Child Care Business Podcast
Season 5, Episode 2: Child Care Business Trends You Need to Know in 2025
In this important episode, Jon Pollock, chief product officer at Procare Solutions, and Kathlyn McHenry, director of state policy and government relations at the Early Care & Education Consortium, share their expert insights on the latest business trends and legislative updates.
Many of their insights draw on the findings of the 2025 Procare Child Care Business Trends Report. Jon and Kathlyn discuss important trends in ECE in areas including enrollment, staffing, software and what's happening with government policy, both federally and at local levels!
For example, Kathlyn explains the trend of states picking up ideas for helping care centers from each other, creating a domino effect. And the idea of property tax exemptions is another idea being looked at.
Want to know more about the report's findings? Get your free copy here!
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Speaker 2:Hello everyone, and welcome to our newest episode of the Childcare Business Podcast. I'm Leah Woodbury, I'm the head of content here at ProCare Solutions, and today's podcast is gonna sound a little bit different than what you're used to. The reason is we recently did a live webinar called Shaping the Future of Childcare Must Know Business Insights and Trends for 2025, and it contained a lot of really, really, really good information on Expert Insights, the latest business trends, legislative updates, and ECE, all of these things drawing on the findings of our 2025 ProCare Childcare Business Trends report. And we wanted this to reach as many people as possible because the information is so good. So today, you're gonna be hearing from John. He is the Chief Product Officer here at ProCare Solutions, and Kathleen McHenry, she is the Director of State policy and Government Relations at the Early Care and Education Education Consortium. So if things sound a little different throughout, understand, that's why. And we hope you enjoy this podcast and get a lot of really, really useful information out of it. Let's get started.
Speaker 3:I've got the best job in the world. Um, I work at a company that is super passionate about , um, our community, what we do to support childcare centers in their mission to create , create great outcomes for these youngsters. Um, I love building great products that surprise and delight our, our users and that create great outcomes for the people that we serve. And so, just delighted to be here. We actually just announced that we had , uh, our new CEO join us. Um, and so we had an all hands meeting , um, and we're super excited about , uh, welcoming , uh, Kim . His name is Joe Gomes, great guy. Um, but he reminded me of a quote , uh, by Jim Collins that I , I'm really, really liked. I've heard it before, but it's a great quote and I think it's very meaningful to share. And he said, you know, basically it says, A great life is when you spend your time absorbed in meaningful work you love with people you love. And I cannot think of a better situation that we have. We have meaningful work surrounded by people that we love doing things that make an impact. And so that's why I'm so glad to be, you know, in this industry partnering with you all. Um, and I love this trends report. Again, this is, we've done it multiple years. There's so much great insights that come from this. One of the things I challenge my team with all the time is we have to list , listen to our customers. We have to have empathy for the issues and challenges that they have, so that we can essentially walk in your shoes for mile after mile so that we can , um, you know, better understand how we can solve those, those issues for you. Um, so we get it. You are in a challenging business. Um, you've gotta manage enrollment. You've gotta make sure that tuition and billing and payments all align . You've gotta communicate with parents. Uh, you've gotta , you know, make sure you're tracking all the children where they're at. You've gotta make sure that, that you stay in compliant with various different state standards, all that sort of stuff. Um, it is a busy, difficult job. And for that, my hat's off to you. Thank you for all that you guys do. And so, the , the, what we're trying to do is create a resource that you can use to say, okay, yeah, that, that I have a similar problem. Here's some data points that might help me in , in how I can better run and manage my business going forward. And so, think of those, those opportunities to use the report and is like, okay, how do you understand the growth trends? What's happening in the industry? How do we forecast out what will happen demographics wise ? How many two year olds are coming into the market? How should I shift kinda my my care outlook , uh, based on those industry trends? So we have those, there's data insights that come from what's happening at certain centers. What are the impacts that teachers are having, the challenges? How can we kind of glean those insights to provide you all some meaningful , um, data so that you can better run your centers? Um, how do you learn from that by exploring various different technology and business strategies to help you kind of bridge the gap between your parents, your teachers, your children, and your business. How do you connect all of those using technology and process? Um, and then how do you, how do you think about managing your business in a different way? What are the benchmarks you should care about? What are the things you should look at on an ongoing basis? And then probably most important is how do we support the educators in the classroom better? Because as you all know, it starts, ends and begins in the classroom with that teacher, that teacher's connection with the parent, that teacher's connection with the child. And so those are all insights that, that we wanna bring forward , uh, with this industry trends report. So, a couple of highlights. Um, they might be low lights because they're challenges, but we'll, we'll call 'em highlights. But these are challenges you all have. Um, number one, you're struggling to hire and retain good staff. And this has been going on for the last three to four years. I, I , this has been at the top of our trends report , uh, pretty much every year. So it's an ongoing challenge, and that challenge is getting harder , uh, going forward. The next one is, there's burnout that's happening with your staff. There's a lot going on within your centers between the parents and the children and running the business. And so you're dealing with burnout. The next one is, there's fluctuations in enrollment. Sometimes you're over-enrolled, sometimes you're right at enrollment. But often more often that we're seeing now is your under enrollment, and that puts pressure on your business , uh, and , and is a challenge going forward. And then finally , um, you know, since COV , the government has really understood the importance of childcare . Childcare is mission critical for the US economy. And because of that, there's all of these funds that flowed into the childcare , uh, market. Many of those funds have evaporated. Some have have kind of been reconstituted and pushed down to the state. So it's really important to kind of understand the, the , the structure of those funds and how to gain access to those funds. Um, and, and overall, just how can you tap into that? So those are the, the top four challenges that we're seeing. And I think you would all kind of nod your head and say, yeah, we , we see those, those four across the board. A couple other ones to highlight that, that are a part of the trends report. And again, you all should download it and , and take a look at it in more detail. A couple of other , other ones that are significant are professional development opportunities for staff. So, you know, we wouldn't think about putting a lawyer in a courtroom without them going to, to law school and passing a bar and doing a bunch of stuff. We wouldn't think about putting a doctor into an operating room without giving him the proper him or her or the proper training. So we've gotta do the same for our teachers. And it's not just the minimums, but it's really developing them in their professional development as that ECE teacher and all the resources that go into that to make them successful. So really, really critical that we focus on , um, professional development for the staff, financial management. Uh, you know, I've talked to so many owners that say, I , I got into , um, into this business for love of the children, and I don't really love running a business. But these are the absolute critical things to actually be able to provide that service to your families and your children is to have that financial management piece. So , big deal communicating with family huge , uh, since Covid hit even before that, that direct line communication, digital communication with the parents is absolutely critical. Curriculum and development , um, assessment standards are really, really important. And it's important that we support the teachers in that. Um, a couple of things that we know that are really important, simplify the ECE curriculum for the teachers so that they can keep that simple in the classroom. Give them simple ways to assess. Uh , we're gonna talk , uh, you know, about insufficient state and government support. Um , we have Kathleen with us, so she's gonna be an awesome support to , to figure that stuff out. And then don't, don't forget about the importance of marketing and being an active member in your community. All of those things create word of mouth and create the opportunity for you to make connections within your community. And again, these are all challenges that you deal with . We've got a couple of insights that we can do to, to get after some of these challenges, the other four that we just presented. Alright , so let's talk hiring and retaining your staff. Um, this is a tough one. Um, there's a number of challenges related to this, but let , let's talk about the impacts to your , um, to your business. So if you have constant re you know, churn of your staff, it's difficult to maintain your, your quality , uh, quality in the classroom, quality in the front office, quality of your business. So retaining your good staff and your great teachers is priority one. Um, we know that, that oftentimes there are, there's, when you lose people, that puts more pressure on the people that stay. And it creates kind of this negative, like, I've got more work just because I've lo I'm , I'm covering four people as well. And then , uh, again, there are limited growth opportunities , um, for the entire thing. So the , the focus is invest in your staff's development and then create a supportive work culture. And so this applies wherever you're at. And I think this, this goes back to the Jim , um, Collins , um, quote, you've gotta love what you do and be passionate about it. And you have to love the people that you work with. And that does mean servant leadership for them. How do we serve them? How do we love them? How do we meet them where they're at? Here are all the , the time constraints of a teacher on the right. Um, there are lots of challenges around time. There's lots of interactions between coworkers . Um, communication with parents, take up time. Tracking attendance takes up time and challenges. Um, handling administrative tasks , planning for lessons, and then ultimately managing , uh, the classroom. And so the, the bottom four, the big meaty ones are really, really critical that you have good technology and great curriculum and great professional development. So professional development integrated into your workflows, into your processes will help them manage the classroom, will help the teachers. Here are issues that you're dealing with. Here are real world examples of those issues, and here are ways that you can cope with them. So invest intentionally on teacher development. Number two, planning in the classroom. Um, it's really important that you have a plan for the classroom across your age groups that you communicate that plan, ideally digital to the teachers, and allow the teachers to kind of interact with that digital , um, curriculum that are in the classroom. Tying in the assessments to piece of that, simplifying that whole process so they can execute it day in, day out is critical. Um, handling administrative tasks . What are all the things that has to happen? There's name to face checks. How do you simplify that to make it simple for them? And then finally, tracking attendance and communicating with parents are all critical, that you have a solution that can go do that and kind of streamline that entire process. So staff burnout , very similar to hiring, entertaining. When, when they burn out , they don't stay. And so that, that influences your high turnover, decrease in your quality. Um, more sick leave that happens just because they're dealing with mental and emotional and other challenges there. Um , so lesson planning is, is we've talked to a number of teachers that say, listen, you know, I love my class. I love what I do within my class, but I spend time outside of the classroom prepping for the lesson that I need to provide. So anything that we can do to provide that prep work pre-planned and ready to go so that when they step into the classroom, they don't need to be thinking about what a , what do I need to prep for as I get ready for that day? Um, oftentimes communicating with parents take a lot of their time away from the children in the classroom, an issue, administrative overhead and reporting and all the other things. Take time away from the child in the classroom, attendance, tracking, all the other things that are going on there. The key thing I think that will help reduce burnout is getting that teacher more time with the children, what they're passionate about, and reducing those overall administrative burdens that they have to deal with. And so whatever you can do to reduce those burdens on that teacher so they can spend more time with the child, you're gonna reduce burnout exponentially. The other thing is get that teacher development in there. Give them the tools that they need to have so that they can immediately start taking action within the classrooms to address behavior, to address concerns with parents and all of that sort of stuff. One of the things I'm a big fan of is, is stepping back, giving your teachers time to sharpen the saw so that when they get back into the classroom, they have the ability to be more proficient in what they do. So teacher development is really important right there. Enrollment inconsistency. Um, you'll see in the trends report that there was actually a negative trend downward of in 2024, it was 60% at capacity. In 2025, there was 57%. And you'll see under capacity went from 33 up to 38%. So you're having a difficult time maximizing your center's capacity, and therefore that puts downhill pressure on the business. And so making sure that you focus on a healthy pipeline of, of students coming into your classroom is really critical for that going forward. And the way that you do that is a number of things. Your involvement in the community , um, word of mouth from the parents, what are you using technology wise to make sure that you're tracking those leads and then following up on those leads very quickly. Um , ProCare has some rudimentary lead management capabilities that we'd recommend that you take a look at using. Then there are fairly rudimentary and , and therefore , uh, customers that don't necessarily have an issue with full enrollment. If you have an issue with full enrollment, I highly , um, recommend that you, you take a look at a CRM uh , product and a CRM product that's specifically custom built for childcare centers. We've got a great partnership with Intelli kids , and we have an integration with them between our, our center management software and Intelli kids that really helps optimize enrollment by making sure that you're following up on every single lead going forward. So if you're struggling with full enrollment, I highly recommend that you, you adopt the CRM solution. We've got a great solution and a great partner in Intelli Kids Limited public funding. And this is when I, I wanna lean in with Kathleen . Uh, she's the expert here, but we know there's all of this money that flowed into the system. We know in the last couple of years that a lot of that money is dried up, but we also know there's still money out there. The states are empowered. Um, and now it's just about advocating for you and your classrooms , uh, and your students to make sure you get the full capacity of that. And we've got a ton of that. We'll hear from Katherine , but Katherine , I'd love to hear kind of your point of view on that at this point.
Speaker 4:Yeah, thank you, John . Um, it is something that we're hearing from providers across the country. Um, you know, the challenges with , um, kind of the expiration of the funding that was , um, given to us through and during the Covid pandemic. Um, there were more than $50 billion that were funneled into the industry , um, to providers, additional money to help families access childcare. Um, and states are really having to grapple with , um, the loss of that funding. And states are, we'll get into this a little bit later, but really all over the place , um, with what they've been able to do over the last year or so after that money , um, from the federal government has expired. Um, and so I think providers are really starting to feel that pinch , um, with the lack of that, that money. Um, but at the same time, prices are going up for goods. Um, you know, what, you know, price of diapers, kind of anything that you might be of that you need to purchase for your centers , um, has gone up. So it's not only , um, you know, the fact that you no longer get this , um, this grant or these resources from the state , um, it's that at on top of that, your , your prices are going up. Um, and so I think kind of the confluence of all of that , um, makes it a really, really challenging business environment. Um, and we know that the childcare providers already struggle to , um, to have, you know, profit margins. So , um, we can get into kind of some of the examples of, of what states are doing in a little bit, but from a high level, just know that , um, every state is really grappling with this in a , in a different way.
Speaker 3:Awesome. Thanks Kaplan . And, and so because it was one of your major issues and challenges , uh, we've, we've invited Kaplan here to, to give us a deep dive in what is , how has it evolved in terms of federal and state funds? What does it mean to you? And more importantly, what can you do to start advocating? So with that, I'll turn it over to Catherine for the remainder.
Speaker 4:Thank you, John. Um, and hi everybody. Thank you , um, to the ProCare team for, for having me today. Um, I'll just kind of state , take a step back and introduce myself. Um, so Catherine McHenry, I am , um, one of the early care and education , um, consortiums, directors of government relations. It's a mouthful, but ECEC is , um, a nationwide trade association of childcare providers. Um , we also work with state childcare associations and education service providers , um, like ProCare. So I'm really glad to be able to talk to you today about some of , um, the things that are going on across the country in terms of public policy. Um, and if we can go onto the next slide , um, a few of the, the topics that I'd like to , um, talk about today , um, you know, we're , uh, limited public funding is of course, you know, one of the major challenges that, that you all , um, had had kind of selected in the report. Um, it's, and like I said, every state is, is kind of grappling with, with what to do after the, the federal funding from the Covid pandemic ran out. Um, most of you, I'm sure, received some sort of basic grant , um, from your state that was funded with federal dollars to help you , um, kind of remain in business and continue paying your staff even if your , um, centers weren't operating at , um, anywhere close to to capacity. Um, and with that funding, you know, I think states and lawmakers really started to understand , um, the importance of the childcare industry. Um, you know, John said they recognize it as mission critical, and I think that that's absolutely right. Um, you know, childcare centers and homes were some of the first businesses to , um, kind of open up , uh, after, you know, a week or two of the first lockdown. And that was because, you know, first responders and, and other essential workers , um, had children and they needed someone to care for them . So , um, you know, with that came this, this really , um, broadened understanding of the important work that childcare providers and teachers and staff do every day to keep our economy open and running. Um, and, you know, that has , um, in a, in a really great way, elevated this conversation post pandemic to how can we make sure that the childcare industry , um, you know, is really on strong footing moving forward. Because as we all know, before the pandemic , um, there were a lot of challenges within the industry that were only heightened and exacerbated , um, by those challenges we saw with the pandemic. Um, so what we're seeing across the states right now, and I'll kind of talk about this in a couple of different buckets , um, in response to the , um, you know, kind of , um, the, the state trend report , um, is, you know, staffing is number one. That is something that lawmakers have heard loud and clear is a challenge. Um, and they really understand now that without , um, without childcare staff, all other workers are impacted. Um, so you lose one childre teacher out of a classroom that's potentially 10 families who , um, can no longer participate in the workforce, who now have to struggle to find care , um, might, might, you know, remove themselves from the workforce. Um, and that of course has a bigger impact on our economy and on other companies , um, within that community. So we're seeing some trends with staffing. Um, I'll talk a little bit about, you know, you in terms of enrollment declines, kind of what is leading to that. Um, there's a lot of , um, you know, know conversation around pre-K , um, in, in the states across the country. Um, I saw someone in the chat asked about some tax policy , um, and business side solutions, and there's definitely a lot of that going on. Um, and then kind of culminating all of that , um, what states are doing in terms of some broader , um, public funding initiatives. Uh, so on the next slide , um, go ahead. Yep , thank you. Um, so one of the things that we're seeing , um, that we've seen pop up over the last year or two, really, I'd say , um, again, on in a effort to support , um, early childhood educators, the , the teachers and the staff that are in the classrooms every single day , um, the , you know, at the state level, I think that , um, they've really recognized, again, like I said, keeping teachers in the classroom is paramount to making sure that all other workforce , um, are able to , um, come to work every day . And so one of the things that we've seen an interest in is providing childcare assistance for early educators. I know many of you probably already offer your, your staff , um, tuition discounts , um, you know, so that their own children can attend your center or another center. Um, and I'm sure that you've seen that we've heard time and time again that providers who do that , um, see better retention rates for their staff. You know, they come back after they've had a kid, or they're able to , um, you know, to come into the classroom with their young child. So , um, you know, I think the benefit of that , um, is, is immense. And so several states have created programs where they've actually fund , you know, put in their own money to make sure that early educators, teachers and staff , um, are able to afford childcare for their own children. Um , we saw that , uh, really pop up in Kentucky for the first time, and many states kind of took that on and, and followed Kentucky's lead. Um, last year I think it was, you know, maybe 12 states that did the same thing. Um, and Arizona this year is looking to do the same. So , um, one , one sort of challenge in that , um, in, you know , in pursuing this policy is that it does cost a lot of money. And so right now we're seeing states , um, not have as much in their budget as they did , um, you know, last year and , and two years ago after covid. Um, and so they're , it's starting to become a challenge to , um, to continue pursuing that policy. But it is really exciting. Um, and I think a few other states are looking to do this within their subsidy system. Um, so if , uh, an early educator or or teacher does qualify for , um, the state's subsidy for childcare, then they might be prioritized on that list again to make sure that that teacher is able to get into the classroom , um, and serve more children and families. Um, so that's something that we really love to see. It's, it's got great benefits , um, for, of course, not only our staff, but for the rest of the economy. Um, oh, sorry, let's go back. One , um, uh, in terms of wage supplements and increases , um, we, I think it's, it has resonated for quite some time, even before covid that , um, with lawmakers that , um, childcare teachers do not make enough money. Um, but they've also, they also understand that , um, parents can't afford to pay more I tuition. And so it's not just as simple as increasing their wages, because of course, we would all love to pay our teachers more. Um, but in order to do that , um, we have to find the money from somewhere. And so we can't charge parents much more as we'll price them out of the system. Um, and so some states have really stepped in here to , um, to supplement teacher wages and a few creative ways. Um, a couple of states have , um, kind of really robust programs to supplement teacher wages. Um, and building off of that, Pennsylvania is considering doing that this year, supplementing teacher wages , um, in a similar way to Illinois, Massachusetts, and Minnesota. And then Colorado took a little bit of a different approach. Last year, they passed a couple of tax credits , um, that support early childhood educators , um, that have been , um, pretty successful as the first year of those tax credits. But , um, we were very excited to see those pass. Um, and then on the flip side, we're watching a few , um, bills that would, you know, there's, I think a lot of folks in this industry have really a lot of lawmakers when they're , um, thinking about bills. They all have really great intentions for the most part, but sometimes those great intentions might have some unintended consequences. Um, so we're watching a bill in Washington state that would establish a childcare workforce standards board that would set mandatory compensation standards for early childhood educators. And I think truly that comes from a really good place of wanting to make sure that our, our teachers and staff are compensated fairly. Um, I think the challenge with that is, of course, where does that money come from? Um, if there's not money from the state associated with increasing wages, then you know, you as a business owner , um, you know , are , are kind of, your hands are tied with where to get that money. So , um, I think again, you , you know, you see kind of some of these proposals coming from a really well intended place , um, but sometimes can be , um, there again, unintended consequences. Next slide here. Um, oops , <inaudible> <laugh>, thanks. Um, we, and again, just on the, on that bill in Washington , um, I think one of the other things to note here is that, you know, once , um, once one state passes a build a new idea , um, that kind of catches fire , um, it can expand to other states across the country. So, you know, something passes up in Washington , um, lawmakers in Oregon and California and Colorado, you know, they all take note and it starts to spread. Um, so that's why, you know, we, we've talked about in , um, as an example, the trend of , um, you know, supporting childcare for early educators that caught on like wildfire. Um, and that was obviously a really positive policy. But , um, sometimes, you know, with these bills that might have unintended consequences , um, that can also, you know, take root and , and kind of spread across the country. So , um, always really important to watch not only for the state that you might do business in, but for others across the country to understand sort of what might be coming down in the future , um, in your state. Alright . Um, so I wanted to kind of , um, give some, I know context maybe , um, to some of the , um, declines in enrollment that you all are seeing and facing. I think there's a lot to be said here and a lot of different reasons why families might not be enrolling in care as much as they were before. Um, we get asked a lot if we think that, you know, COVID had anything to do with it if people, you know, parents are still worried about, you know, safety and health. Um, and that's not something we've necessarily heard much about. I think it's probably true to some extent for some families, but I don't think that that's likely causing , um, these, these trends that you're seeing throughout the industry. Um, so it could certainly be true for, you know, some families they would rather, you know, stay at home or, or keep their children at home for fear of , um, you know, kind of safety and health reasons. But I don't think that's not necessarily what we've kind of seen , um, as the cause root cause of all of this. Um, I think , uh, from a broader perspective, what, what we're really seeing , um, are big impacts , uh, with public pre-K in, in many states. Um, and then of course, families, you know, facing issues with affordability , um, and, you know, not being able to, to afford the increased rates that we're seeing , um, that are, like we said, due to , um, of course increased costs of all of the goods. And then of course , um, increases in teacher pay. So I think those are kind of the two big things that we're really seeing here. Um, kind of contributing to declines in enrollment. Um, in terms of preschool and pre-K , um, I know we have folks here from all across the country, and so every state has a different , um, pre-K program and a few states don't have any at all. Um, they really range in terms of how many children are served through the program , um, and where children can receive preschool services. So in some states , um, there are really robust, what we call mixed delivery pre-K programs where community-based providers like yourselves can participate and serve children through public preschool. Um, but in other states it is really ran through the public school system. And in those states, that's where , um, at least what we're hearing is there's been a , a really big decrease in enrollment for three and four year olds. Um, which of course has a major impact on your bottom line and your ability to run a successful business. Um , because the ratios for three and four year olds are , are so much greater. Um, so that's something that we talk a lot about at the state level, improving mixed delivery pre-K so that your businesses are, are better able to operate. Um, I think, you know, we talked to some of our members and providers and they say, you know , we're at 50% enrollment , um, in our 4-year-old classroom right now, which is just killing us. So , um, that's something that we're watching. You know, one of the things , um, that we've seen this year actually in Texas, which does not have a robust mixed delivery system , um, and so most pre-K students are, are going to the public schools. Um, they recently , um, have proposed including pre-K students in their school choice program , um, one of the first, if not the first state to do that. Um, so that would completely kind of upend how things are, are operating right now in Texas. And, you know, just given the size and the nature of, of Texas , um, again, something that might catch on in a few other places. I actually just saw Wyoming propose the same thing. So , um, something kind of to, to watch there. Um, and then in New Jersey right now, there are , um, kind of partnerships that are possible between community-based providers and school districts. Um, and we're looking to, to expand on those and make those a bit more robust by kind of changing some of the requirements to make it easier for community-based providers to participate. Um, and then developing a funding set aside for preschool partnerships to ensure that, again, the funding is there , um, to help community-based providers serve those students.
Speaker 3:And just real quick on that topic , um, so I know four year olds in states that have the pre-K program, a lot of them are , are attending those publicly provided or mixed delivery. Are you seeing strategies that of centers that said, okay, fine, four year olds are gonna be down, I'm gonna double down on my infant, 1-year-old, 2-year-old, three-year-old programs where they expand those classrooms in order to adjust for the, the decline in enrollment rates on the four year olds ?
Speaker 4:They do. Um, and that is, I mean, that is the strategy, right? You don't wanna have a, a classroom that's empty. And so when demand for infants and toddlers is so much greater , um, you know, I think the solution that we're hearing is, okay, well, I'm gonna close one of my preschool classrooms and I'm gonna open another infant classroom. Um, you know, I don't have to tell anyone on this webinar this, but , um, you know, the, the just the numbers are so much more challenging with that approach. Um, and so, you know, what does tuition look like for, for infants? Can you pay your teachers , um, you know, with those rates are infant, do you still have the same demand, I suppose, if you're , um, you know, charging the rates that you might need to , um, to keep that infant classroom , um, open? So I think it's, it's a question that providers are grappling with and they in a lot of places don't want to give up their preschool classrooms just yet. Um , I think some of them see the writing on the wall and have moved in that direction, and then others are still fighting really hard to participate in pre-K.
Speaker 3:That's helpful. Thank you.
Speaker 4:Um, in terms of, you know, ensuring that families can better afford childcare , um, a couple of sort of strategies that we're seeing , um, first at the federal level , um, many of you might be familiar with the childcare and development block grant. Um, the funding stream that helps states , um, provide subsidies to families. It's called something different in every state, but every state has a , a program , um, to , to provide scholarships to low income families. Um, there was a , a new regulation that was adopted last year , um, that among many other changes will reduce the amount of a copayment that the family is required to contribute. Um, and so we're seeing states start to try or start to , um, work towards implementing that. Um, now states are required to cap copayments at 7% of a family's income. Um, before that states were kind of all over the place. It ranged, you know, everywhere from 2% to 30% depending on the state. Um, and so again, that that's something that states are , um, are having to grapple with because it does cost states more money , um, to reduce copayments and cover a more significant share of , um, of the subsidy rate. Um, and then in other states , um, they're very aware that , um, the childcare and development block grant, that subsidy system only reaches a fraction of eligible families. And so they're, you know, doing a lot of different , um, things to try and , and reach those families who aren't , um, receiving assistance already or those who are just over , um, that eligibility threshold. Um, because a lot of families still, you know, of course , um, are struggling to pay with for childcare even if they don't qualify for public assistance. And so , um, kind of addressing that, that missing middle, if you will. Um, we've seen several states put in their own money to the subsidy system to serve more families or , um, kind of expand eligibility on their own to serve those families who might not qualify, but still again, have a, a major challenge in affording , um, childcare on their own. Um, and then one of the things that has been really interesting coming out of covid, as we mentioned, is an interest from the business community , um, and an eagerness to help solve this problem and contribute to , um, to solutions. So, so states really , um, are , um, being lobbied by their chambers of commerce , um, which has been a , a , you know, wonderful advancement after COD . Um, we are working with Chambers of Commerce in many states , um, to think of some solutions that can encourage the business community to help , um, contribute to the childcare expenses of their employees because those businesses all know that , um, they are also direct beneficiaries of a strong childcare system. Um, and so a couple of , um, different methods that that states have taken , um, one in terms of business tax credits. Um, so last year , um, Florida passed some legislation that , um, provides a tax credit to companies who do contribute to the childcare expenses of their employees, either by , um, you know, developing an onsite , um, program or contracting out with a local community-based provider and sort of covering tuition. Um, and Texas is also very interested in sort of modeling that legislation that Florida passed. So again, kind of you're seeing these trends from states and one picking up an idea of the other , um, and they'll kind of domino effect from there. Um, in terms of your own businesses, property taxes , um, are , is something that has started to pop up. Um, we are actually just had a bill introduced , um, yesterday in Florida. Um, so we'll have to update this slide, which is really good news. But , um, in Florida there's an existing , um, property tax exemption for childcare providers who own their facility, which is a very small portion of childcare providers. And so we're looking to , um, expand that to those who also lease their facility. Um, and we think that that would really help providers bottom line and also , um, uh, reduce expenses for families, reduce tuition for families. So that's an exciting development there. Um, North Carolina is also interested , um, the Chamber of Commerce I think just released a report today that might include that as a recommendation. Um, and then last year, again, building off of, of all of this , um, Texas passed legislation that allows , um, local tax assessors to waive , um, uh, property taxes for childcare providers who , um, participate in the state subsidy program. So , um, we're, you know, that's something that I think we will , we'll continue to see pop up over the next couple of years. Um, and then finally , um, there are some exciting , um, kind of pilot programs popping up across the country. One you might have heard of called the tri share , um, approach. That's when the state , uh, sort of partners with , um, a local , uh, business and that parent to split the cost of, of childcare sort of three ways. And so the state's resources go farther, the business has a stake in that, and the parent is still paying a little bit for childcare . So that's something that we've seen a lot of interest in across the country. Um, and this kind of just, again, goes back to what I was talking about with regard to CCBG, that, that , um, childcare subsidy program , um, and the final rule that was published last year, I will say we're hearing with the new administration that , um, there this rule will be , um, revised or potentially , um, even rescinded. And so , um, you know, we are , we're still remains to be seen what's gonna happen with this rule that that came down last year. Um, but it, you know, for those of you who do participate in your state subsidy programs, the reimbursement rates , um, for the state subsidy programs are, you know, in, in nearly every single case much lower than what you're charging for tuition for your private paid families. And so that's a major challenge for , um, for families because they can't , um, take their subsidy to their highest quality providers, they're gonna have to pay a large copay. Um, and, you know, you are kind of operating at a loss when you serve those families. Um, and so one of the things we talk a lot with states about is increasing reimbursement rates to more closely match the cost of providing high quality care. Um, unfortunately that cost states a lot of money. Um, and so they, you know, with their, with tight budgets that they're facing right now , um, just have a lot on their plate that they're trying to , um, manage between, especially within childcare funding. Um, so their , I think their major challenge within , um, the subsidy system is deciding whether or not to serve more families or increase rates. Um, and that's always really a struggle that we see. Um, and so some states are , um, and you know, kind of as a footnote to all of that, the covid money did help them increase rates. Um, but of course now that that has gone , um, that's an even more significant challenge. So , um, we're seeing states, you know, kind of take one of two approaches either , um, serving more families, you know , we, or sorry, fewer families, we saw wait list , um, you know, in Arizona for the first time in a long time , um, serving fewer children, Texas has a wait list of almost 90,000 children. So , um, you know, I think over the next couple of years if, if more money doesn't , um, come down from the federal government, we're gonna unfortunately see fewer children served. Um, so would love to answer any questions , um, or John, we can sort of kind of go back and forth and you can , uh, make sure I've, I've hit on everything that you wanted me to. But I think , um, you know, the key takeaway that I would leave you with is that , um, there's a lot more going on at the state and federal level now than there ever has been with childcare . Um, we're tracking a lot of different ideas and policies and approaches and , um, you know, nearly every single governor has mentioned a childcare and early learning in their state of the state addresses, has budget proposals on this, is making childcare a really top priority. Um, and so that is a very good thing, even if there isn't a lot of money or , um, you know , aren't a lot of, you know, big high , um, high dollar programs coming down, it is something that legislators and governors care a lot about. Um, and so we, you know, coming out of covid, I think are in , um, at least a very good position to advocate for , um, improvements to the industry and more money for businesses and for families.
Speaker 5:Alright , John, I think you're gonna take it from here. Is that right?
Speaker 3:Yeah, yeah. Um, just, just trying to wrap up what Kathleen just provided. Um, thank you Kaly , that that was fantastic. And what I would also say is , uh, in addition to the awareness , um, and the need, we now understand what advocacy can do to go influence the state and federal lawmakers. Um, you know, let me just say, you know, eec , EEC wakes up every day trying to advocate across the board. You have , um, you know, lots and lots of interest that we talked about, and now it's turning that advocacy into action within the federal and state levels. And I saw in the chat just a number of folks saying, Hey, how do I get involved? All that? I'm assuming the best way to get involved is go out to the ECE website, start engaging with your local folks. Just anything you would say is kind of a starting point, Kathleen , in terms of how they could get involved.
Speaker 4:Yeah. Um, absolutely. You're, you're welcome to, and I can put our email in the chat or my email in the chat, welcome to reach out to us. Um, excuse me. I would also , um, suggest looking to see if your state has an active state childcare association. Um, that's often a very great place to start. And we, like I said, partner and work really closely with a number of them . Um, but often they have, you know, boots on the ground, you know, every day as well. And , um, so we can point you into some of the directions there. Um, your local , um, you know, NCI chapter as well as often very involved. So feel free to reach out and , um, depending on your state, we might be able to point you in the right direction.
Speaker 3:Awesome, thank you. And thank you for all the work you do to advocate for all of us. Okay, so let's , uh, let's try and wrap some things up here. Um , got a couple of things that we, we definitely wanna talk. You want to go back one slide please? Uh , uh, yes. Perfect. Um, so if you were to take away one thing from this webinar is it, it starts and it ends with your teachers. Um, and you have to meet the teachers where they're at. We know that we're , they're facing burnout. We know that they're , they're challenged to do the job in the classroom with the right skillset . We know they feel undervalued. We've talked about at a high level some of the strategies about creating a culture of inclusion, about , uh, providing them with development opportunities. We've also heard from a number of centers that have really good programs about mentorship and development within the center. So building the capabilities within your leadership team to mentor and help , um, prioritizing mental health and wellness and giving them the tools so that they can go , um, have the time and the tools to go develop themselves. We also have found, you know, great trends around recognition and rewards , uh, for retaining those, those teachers as well. Um, in the , uh, in the survey that we provided, we asked them what resources and primarily these are the teachers, what resources would help. And so here's some examples of, Hey, gimme a template for my classroom. Um, give me a starting point. Give me a structure that I can take at a high level and tweak , um, to my, my specific needs. But don't gimme a blank slate, gimme some structure so that I can start from there. They're asking for professional development. Um, you know, PD is really important that the centers lean in, not only on getting them into the classroom as a minimum requirement, have your CDA and , and and hours behind that, but actually giving them the tools in the classroom on a consistent basis, making sure they have time to go focus on that professional development. Um, and then we've heard over and over that collaborative planning, like, you know, getting the toddler teachers together, the infant teachers together and, and figuring out things that they can do planning together. And we've also mentioned, you know, the importance of a mentorship program. So listen to your teachers, meet them where they're at, give them space for development, are gonna be absolutely key for retaining them going forward. Okay, so let's go ahead and, and wrap this thing up. Next slide. What we have found is that, that having a partner is absolutely critical for the mission of your company. Um, we have found that that centers that have manual processes or processes that aren't well documented just are struggling to maintain and connect all the dots and work through all of that. Um , 20 years ago, you could run a center without a, a software package holding it all together. In today's world, it's impossible. Um, and so we recognize all of the challenges you have. And ProCare over the last 30 years have been building an ecosystem, a software that basically understands all of the administrative tasks , all the compliance requirements, all the attendance requirements, all the teacher requirements that will drive the best outcomes in your classroom. And for 30 years, we've been building that intelligence into our platform to help you guys optimize your centers going forward. Um, I love the fact that we're in the center of your ecosystems. I love the fact that we are helping you all provide a safe place where your children can be, receive the education you've done. We're we at ProCare, are passionate about your mission, and we're passionate about driving great outcomes , uh, for those that you serve. And thank you for the opportunity for us to share with you our trends report. Please download it. It is a great resource. We're super excited about, you know, the, the trends, the insights, and all of that that , uh, we have from it. And with that, I'll turn it back over to Leah .
Speaker 2:Thanks for joining us today. And if you'd like a copy of the 2025 Childcare Business Trends report, please check our show notes. We'll have a link there where you can download it for free. Thanks as always, we'll see you next time.