State child care costs among nation’s highest

02/14/2006

National report recommends more government aid, tax breaks for parents

BY RACHEL E. STASSEN-BERGER
Pioneer Press

Minnesota offers parents some of the least affordable child care in the nation, according to a new report.

The National Association of Child Care Resource and Referral Agencies found that infant care in Minnesota costs almost $12,000 per year. That’s more than 15 percent of the annual income of a median, two-income family, ranking this state as the worst in affordability for infant care.

At just more than $8,832 per year, center-based child care for 4-year-olds is less expensive, but it’s still the second most expensive in the nation.

The report is the first of its kind, but its finding that Minnesota child care is pricey will come as little surprise to parents in the state.

“It is by far our largest expense …. It is a huge issue. It really impacts our life in such a big way,” said Elizabeth Carpenter, who has two children — a 2-year-old and a 6-month-old — in child care in Minneapolis.

She and her husband pay $2,300 a month, about $27,000 a year, for their Montessori school. The care her two girls receive is worth the expense, she said, but paying for it has forced the Carpenters to make big changes in their lifestyle.

That the Carpenters pay more for child care than housing is typical, according to the association’s report. It found that having two kids in child care costs, on average, $20,628 — more than twice the median rent in Minnesota and about $5,000 more than the median mortgage payment.

Want another comparison? Even with University of Minnesota’s steadily rising tuition the yearly cost of infant care ($11,796) is costlier than a year at the U ($8,822).

One of the reasons for the high cost of child care in Minnesota might not be such a bad thing, said Ann McCully, executive director of the nonprofit Minnesota Child Care Resource and Referral Network. The high cost reflects the state’s stringent licensing and staffing requirements, which help keep Minnesota’s quality of child care high.

Still, she said, “We are at a virtual breaking point in what parents can pay.”

For single-parent families in Minnesota, child care fees can be staggering. The report found that paying for an average year of infant care could suck up 41 percent of a single parent earning the median income. Paying for a 4-year-old’s care could absorb 30 percent of the parent’s paycheck.

There are some high-quality, lower-cost options. Center care generally costs more than home-based care. In Minnesota, the average yearly cost of family child care is almost $1,600 less than center care for a preschool child.

The report recommends more government help and tax breaks for parents in paying for child care. For McCully, that’s the meat of the report.

But that’s a contentious issue. In 2003, the state froze child-care reimbursement rates and reworked its child care subsidy system.

Some child care advocates say those actions cut some needy families off from subsidies. To others, the changes were needed to reform the system and produced a subsidy system that is still more generous than most states.
McCully said the system-wide changes mean there are fewer good child care choices for parents.

For Shana Wenger, a St. Paul mother of a 9-year-old and a 20-month-old, the costs of child care mean a very different choice.

“I would love to have another child, but there is no way we could have two in day care at the same time. Definitely, day care cost has been a major consideration for how many kids we could have,” Wenger said.

She loves the family child care her 20-month-old attends. It’s a bonus, she said, that at nearly $6,000 a year it’s not as costly as some center-based child care.

“We are really fortunate,” Wenger said.