Florida Child Care Crisis: $3.18 Billion Fiscal Cliff on the Horizon

Florida TaxWatch Highlights Impact of Child Care on Florida’s Workforce and Economy

Tallahassee, Fla. – Florida TaxWatch (FTW) released Economic Benefits of a Robust Childcare System in Florida. Building on previous FTW research – most recently, a July 2022 report – this briefing highlights how access to affordable, high-quality child care and other early learning programs are essential to keeping parents in the workforce and bolstering Florida’s economy. 

Florida TaxWatch President and CEO Dominic M. Calabro said, “When parents have access to affordable, high-quality child care and early learning programs, they can participate in the workforce, maintain a stable income, and increase the likelihood of advancement and higher earnings in the future. This ultimately raises tax revenues and bolsters the economy, which, in turn, supports a strong workforce, profitable businesses, and thriving communities. Therefore, child care should be considered  a critical public policy issue, and ensuring the health and long-term success of the industry must be a priority for the Florida Legislature. Florida TaxWatch presents the recommendations in this briefing as a resource to help guide those conversations among policymakers and staff, enabling them to serve as champions of child care during the 2024 Legislative Session and beyond.”

According to FTW, Florida’s already strained childcare system was “decimated” by the COVID-19 pandemic, and in response, federal funding – in the form of Child Care and Development Block Grants (CCDBGs) – was increased to support higher wages for workers and provide financial assistance for parents. In 2018, the federal government allocated $455 million to be used over three years, and by the spring of 2021, the state received an additional $3.3 billion in supplemental CCDBGs as part of the American Rescue Plan.

However, most of these CCDBGs are set to end this Saturday, September 30, with the remaining funds lapsing in September 2024. Without additional state or federal funding, Florida’s child care system approaches an estimated $3.18 billion fiscal cliff – adding to existing challenges such as low wages and high turnover rates among workers; a limited number of childcare slots and complete unavailability in rural areas; and expensive costs that disproportionately affect lower-income households. In fact, FTW notes the average annual costs for both center-based and family home child care exceeded the average annual in-state tuition rate of $6,099 at a Florida public university for the 2022-23 school year.

FTW asserts these challenges have resulted in:

• Florida’s businesses losing almost $2.6 billion every year due to reduced revenue and extra recruitment costs;
• Florida’s workforce with young children experiencing an aggregate income loss of $8.2 billion annually due to child-care-related turnover; and
• An economic loss of $271.9 million per year in Florida created by working parents’ absenteeism.

Before all of the supplemental CCDBGs lapse next year, FTW recommends the Florida Legislature use a portion of its record budget surplus to mitigate these challenges by increasing wages for the childcare workforce, comparable to other professionals with similar credentials and experience requirements; increasing training and coaching for childcare workers to limit burnout; and providing grants to cover start-up and licensing costs to help establish new child care providers.

To learn more and access the full report, please click here.

About Florida TaxWatch

As an independent, nonpartisan, nonprofit government watchdog and taxpayer research institute for more than forty years and the trusted eyes and ears of Florida taxpayers, Florida TaxWatch works to improve the productivity and accountability of Florida government. Its research recommends productivity enhancements and explains the statewide impact of fiscal and economic policies and practices on taxpayers and businesses. Florida TaxWatch is supported by its membership via voluntary, tax-deductible donations and private grants. Donations provide a solid, lasting foundation that has enabled Florida TaxWatch to bring about a more effective, responsive government that is more accountable to, and productive for, the taxpayers it serves since 1979. For more information, please visit www.floridataxwatch.org.