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Why child care in MN is so expensive ... if you can find it

Minnesota ranks fourth in the country for most expensive childcare, behind only California, Massachusetts, and Washington, D.C.

MINNEAPOLIS — Courtney Rowe hadn't planned to leave her job as a licensed hair stylist once she became a mom. But when she and her husband started looking into daycare options, she felt she didn't have a choice. 

"When we sat down and did the math, most of the time I would be breaking even. But if I had a slow week, if it was a slow time of the year, I would actually be losing money going to work," she said.

According to a report from the Economic Policy Institute, Minnesota ranks fourth in the country for most expensive childcare, behind only California, Massachusetts, and Washington, D.C.  The report says infant care at child care centers in the state averages $1,341 per month. While information from Child Care Aware of Minnesota says home child care centers average around $706 a month. 

So why is Minnesota so expensive?

"Minnesota is an outlier, in big part, because we have higher standards than most states," said Chad Dunkley.

Dunkley is the CEO of New Horizon Academy and the president of the Minnesota Child Care Association. 

Credit: KARE
A New Horizon Academy location in Plymouth. New Horizon Academy, headquartered in Minnesota, also has centers in Iowa, Idaho, and Colorado.

The standards he's referring to include a ratio requiring centers in Minnesota to have one teacher for every four infants. It's meant to keep kids safe, but it also keeps costs high. 

"You can't get around it. With the small ratios, if you have a fifth baby start in your program, you need a second teacher," Dunkley said. "Because it's so labor intensive, there aren't cost savings you can find ... there's no way to outsource it. There's no way to make that cheaper."

Cutting costs would mean cutting pay for teachers. Dunkley estimates their salaries and benefits amount to more than 60 percent of New Horizon's budget. Not an option, he said, adding that, if he could, he would like to raise teacher pay. 

The low pay in a tight job market is a reason it's hard to find daycare teachers, for both centers and home facilities. 

Home daycares are closing around the state, creating shortages felt hardest by people in greater Minnesota. 

"We actually had secured a spot multiple times, but then through circumstances we lost those spots multiple times," said Arik Forsman, a father of two in Duluth. "[We said] if we don't figure this out, who's quitting their job? Because at the end of the day, that's really all you can do."

Forsman is also a Duluth city councilor and decided to do something about the problem he was experiencing firsthand. 

"The city of Duluth, in partnership with an organization called the 1200 Fund, has dedicated $500,000 of financing," he said. "It's $500,000 of new money dedicated specifically to just child care in the city of Duluth to try to incentivize more spots to be opened up for residents."

As for the staggering costs for parents? Dunkley has an idea. 

"The government needs to intervene. [It's] a broken economic model," he said. "We need to give families more childcare tax credits. Our flex spending accounts have been frozen at $5,000 for decades. Why would you do that when it costs more than $10,000 per child for childcare?"

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