Updated June 22, 2020

Where we are:

At the state level, Gov. Gretchen Whitmer has issued a number of executive orders and directives in response to the COVID-19 crisis. On March 19, 2020, Gov. Whitmer issued Executive Order 2020-16 (COVID-19) to address the short-term critical need for child care for essential health and other workers by authorizing regulatory changes that would allow employers and school districts to quickly establish temporary disaster relief child care centers. Provisions for disaster relief child care centers were extended in Executive Order 2020-51 until May 13, 2020The Michigan Department of Education informed current licensed and license-exempt child care providers that for the period of March 16, 2020 to April 30, 2020, they can bill for currently enrolled children whether or not those children are still attending, are absent or the facility is closed. In addition, the number of hours that providers can bill for school-age children was increased, and redeterminations for child care subsidies were extended. On April 29, the governor launched a new Child Care Relief Fund to help child care providers stay afloat during the COVID-19 crisis, and ensure that child care is available when it is time for Michiganders to go back to work. Approximately $130 million is available for noncompetitive grants to cover providers’ basic operating costs during the public health crisis, and is available to child care centers, family and group homes, and license exempt providers. As part of the 2020 budget agreement between the governor and legislative leaders, an additional $125 million in federal CARES funding was provided for rate relief for parents, with up to a 30% reimbursement to providers who reduce rates during June, July and August.

At the federal level, an additional $3.5 billion in federal Child Care Development Block Grant (CCDBG) funding was approved as part of a COVID-19 stimulus package—short of the $50 billion proposed by Senate Democrats and many child care advocates. Michigan will receive $100.8 million from the stimulus package, with funds to be used to provide child care assistance to healthcare sector employees, emergency responders, sanitation workers and other workers deemed essential during the response to the coronavirus. Child care providers are also eligible to receive newly- expanded unemployment benefits, and can apply for the federal Payroll Protection Program. Michigan relies primarily on the federal CCDBG for its child care subsidy program. Unlike many other states, Michigan currently does not use Temporary Assistance for Needy Families (TANF) funding for child subsidy payments, and invests only the state funding required to draw down federal dollars.


Our recommendations:

Provide sufficient funding to allow parents to retain their child care slots and compensate child care providers for their lost income as a result of the coronavirus crisis, including continued payments based on the number of children enrolled, not attending. 

Provide contracts or incentive payments for providers who offer to care for children during the emergency, including adequate payments for staff caring for children of essential workers who are at a higher risk of being exposed to COVID-19, costs related to finding substitute teachers, and additional costs associated with creating slots for parents needing care for infants and toddlers, or those needing evening and weekend care. 

Provide emergency grants to cover expenses child care providers incur by staying open during the emergency, including added costs for sanitation and cleaning supplies, higher costs related to procuring food, and other needed equipment or supplies.

Temporarily expand the child care subsidy income eligibility entry guideline to 85% of state median income (approximately 250% of poverty) to help more essential workers access child care during the coronavirus emergency.


Why Michigan must act now: 

Michigan businesses and the state’s overall economy hinge on the ability of parents to find reliable child care that allows them to work, and the role of child care has become even more critical in the wake of the coronavirus pandemic. As parents have been asked to remain at home, and schools and businesses have closed, child care providers are facing the hard decision of closing themselves, or remaining open for the parents who are considered essential employees and still need child care. Now they face substantial hurdles to reopening their businesses in a time of uncertainty, and parent and provider concerns about safety.

Even before the coronavirus at least temporarily changed the way we work and live, Michigan’s child care market was struggling. The cost of child care was out of reach for too many parents—exceeding the cost of rent or a mortgage. Plus, a legacy of systemic racism has created significant racial inequities when it comes to child care access and affordability. Adding to Michigan’s child care problems, the state’s child care subsidy program has been one of the most restrictive in the country. 

Michigan child care providers, who are some of the lowest-paid workers in the state, have also struggled. Child care businesses operate on a razor-thin margin, and the disruption of payments can result in the closure of child care centers and homes in a state that already has significant child care shortages. In fact, an estimated 4 out of every 10 people in Michigan live in child care “deserts,” and 10 Michigan counties do not have any licensed slots at child care centers for infants and toddlers. Very few child care providers care for children whose parents work evenings and weekends—as many essential employees do.  

Michigan needs to support and redeploy current child care providers by providing adequate funding to allow them to serve essential employees during this public health crisis. A national survey of child care providers shows that nearly one-third would not survive a closure of more than two weeks without help to compensate and retain staff, pay rent or mortgages, and cover other fixed costs. Many Michigan child care providers have indicated that they are willing to step up in this crisis—at some risk to themselves and their families—to care for the children of essential workers if they have the means to do so. If Michigan does not provide emergency support to these providers, when the coronavirus crisis passes the state could face a secondary crisis caused by the closure of current child care centers and family child care homes, and many Michigan workers would not be able to get back to work.

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