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‘Disrespected’: Maryland’s struggling child care providers see delay in state rollout of COVID relief funds

The emails kept pouring in, fraught with anxiety.

With little notice, the Maryland State Department of Education dropped its Sept. 30 target for processing $155 million in federal grants to prop up 5,180 child care providers reeling under the pandemic-induced weight of lost business and added costs.

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“This is absolutely ridiculous,” wrote one provider to the state comptroller’s office, which was waiting on the department so it could disburse the funds.

“Unfortunately, it seems like the child care industry is always at the bottom of the totem pole,” wrote another, according to online documents obtained by The Baltimore Sun in a public records request.

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Maryland’s child care industry has endured hundreds of closures and huge financial losses since the coronavirus pandemic began in March 2020, keeping many families in their homes. When providers were notified two days before the Sept. 30 date that they wouldn’t receive the federally approved “stabilization grants” then, as expected, there was an outcry of angst and exasperation.

Fretful Maryland providers sent pointed emails to the department, which defends how the grants are rolling out and calls the Sept. 30 date part of “an initial draft timeline.”

The providers also reached out to the state comptroller and state and federal lawmakers with accounts of missed rent, mortgage, tax or insurance payments. A theme among providers, including licensed child care centers and home-based providers, was that they felt “disrespected,” said Christina Peusch, executive director of the Maryland State Childcare Association, which advocates for the industry.

Imani-Angela Rose, director of Joshua's Place in Northwest Baltimore, is among many providers who have struggled with low numbers of day care children during the pandemic. She is frustrated that she had to wait for a federal grant that the state said would be available by the end of September. “It seems like there was no urgency to get money to providers who were desperate,” she says.
Imani-Angela Rose, director of Joshua's Place in Northwest Baltimore, is among many providers who have struggled with low numbers of day care children during the pandemic. She is frustrated that she had to wait for a federal grant that the state said would be available by the end of September. “It seems like there was no urgency to get money to providers who were desperate,” she says. (Jerry Jackson/Baltimore Sun)

“It seems like there was no urgency to get money to providers who were desperate,” said Imani-Angela Rose, 50, who oversees 15 kids, including some with special needs, at her Joshua’s Place center in Northwest Baltimore.

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States are permitted to handle the rollouts in varying ways, and many have not yet begun to distribute funds. Some large states, such as Pennsylvania and New York, have monthslong application periods and are still accepting applications. Maryland’s application window was July 14 to Aug. 6.

Rose said she got her grant — she declined to say how much — on Oct. 12. The grants begin at $15,000, then add $500 for every enrolled child or vacant slot they are licensed for.

“I would say it is welcome,” she said, “but I don’t consider myself fortunate, because we could have used it way back when it was expected to come out.”

The grants were included in the American Rescue Plan, signed by Democratic President Joe Biden in March. The state education department touted the program in a July 14 news release, saying the grants ― which can be spent on wages, overhead, COVID-19 prevention and other needs — “will help address the financial burdens and operational challenges faced by child care providers during and after the COVID-19 public health emergency.”

Later in July, the department said in an online, explanatory memo for applicants: “We expect to make all grant payments by September 30.”

But on Sept. 28, the agency said on its child care web page that the money would not be disbursed until sometime in October. It did not specify a reason for the change.

Imani-Angela Rose, director of Joshua's Place in Northwest Baltimore, is among many providers who have struggled with low enrollment during the coronavirus pandemic.
Imani-Angela Rose, director of Joshua's Place in Northwest Baltimore, is among many providers who have struggled with low enrollment during the coronavirus pandemic. (Jerry Jackson/Baltimore Sun)

Peusch, the association director, said the state didn’t level with providers.

“All I can say is people felt disrespected,” she said. “You cannot run a business if you have no idea when the money is coming.”

Six days later, on Oct. 4, eight state contractual employees newly hired by the education department began working on the grants “and the first grants were processed that day,” according to unsigned, written responses the agency gave to The Sun’s questions. The department declined to make officials available for interviews.

The department said it “adhered to an aggressive schedule” with the understanding that “these funds could not be released into the hands of our providers fast enough.”

It said it was not permitted to hire the eight needed workers until the chairpersons of the General Assembly’s budget committees approved an amendment in September to account for the influx of new federal child care dollars.

“The moment MSDE had authorization to allocate the funds, it began the hiring process,” it said.

The agency’s plan included using a small portion of those federal funds to hire the workers, according to the state Department of Budget and Management. But that agency said the education department didn’t need to wait to bring the workers aboard because money already was available elsewhere to hire them.

Joshua’s Place center is pictured in Northwest Baltimore.
Joshua’s Place center is pictured in Northwest Baltimore. (Jerry Jackson/Baltimore Sun)

“The budget amendment was not needed to hire the contractual employees, but MSDE plans to use some of the funds realized by the budget amendment to ultimately pay for them (as allowed by the feds),” said Nick Pepersack, the budget department’s deputy chief of staff, in an email to The Sun.

The education department called the Sept. 30 date “an initial draft timeline on our web site” in its response. It said Oct. 8 that it had processed “nearly $100 million of the $155 million in grant funding this week, and payments are making their way to providers. We anticipate that payments will be completed by the end of this month.”

Renee Locker, a family child care provider in Waldorf, said she was behind on electricity and water bills and tax payments, and recently sold her car to try to keep up.

“I have had a car since I was 16 years old,” she said. “I am now 64. This has been a very humbling experience.”

She said in a text Oct. 18 that she had just received a $19,000 grant.

“I will be catching up on bills and money borrowed,” she said.

The department updated its child care grant web page that day, saying grants “will continue on a rolling basis throughout the month.”

As of Oct. 20, about $143 million of the $155 million had been distributed, according to the comptroller’s office.

In a letter earlier this month, U.S. Sen. Chris Van Hollen, joined by other Democratic members of Maryland’s congressional delegation, told State Superintendent of Schools Mohammed Choudhury that child care providers were “operating on thin margins before the pandemic” and their situations have sharply worsened.

“The state completely fumbled the ball on this very important issue,” Van Hollen said in an interview.

Democratic State Comptroller Peter Franchot called the delays “unacceptable,” saying day care providers helped front-line workers during the height of the pandemic and “play a crucial role” in enabling parents to return to work.

Since January, the education department has been overseeing the creation of a new payment processing system under a contract with the Deloitte consulting firm. It said the system wasn’t ready for the current round of grants, but “will expedite future grant payments to child care providers.”

The child care industry has been slow to recover from the pandemic’s economic effects. At the outset in 2020, the state limited day care to children of essential personnel and imposed capacity limits.

Meanwhile, more Marylanders working from home meant reduced demand for day care. More than 600 child care businesses closed statewide since the pandemic began. Some 7,200 remain, many of them struggling.

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The pandemic also increased costs. Rose, the Baltimore provider, said kids at her center — in a brick home with colorful play equipment outside — previously took turns using scissors, glue and crayons.

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But because of the contagious coronavirus, Rose now must “have enough to make sure kids aren’t sharing. We work with a population that can’t be vaccinated,” she said, referring to young children.

The grant, she said, “could help us get enough supplies. That could ease one of the things we have to deal with.”

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