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Optimizing Federal COVID Relief Funds: State Perspectives on Bolstering Child Care and Early Childhood Systems

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States have proven they can build the necessary infrastructure and operations that fully appreciate the business model of the early childhood sector with consistent investments in resources, necessary flexibilities, and integrated systems.


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The COVID-19 pandemic placed an unprecedented strain on the early childhood sector, compounding serious pre-pandemic problems that threatened to wreak havoc on what is arguably the backbone of the U.S. economy, working parents. Multiple studies showed that many providers shuttered at the pandemic’s start. One report found that close to 16,000 licensed providers nationwide permanently closed between December 2019 and March 2021. Further, employment in the sector dropped 35% in April 2020, worsening the early care and education (ECE) workforce shortage that existed before the pandemic.

In response, Congress passed a series of COVID-19 pandemic relief packages: the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020; the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act in December 2020; and the American Rescue Plan (ARP) Act in March 2021. The three relief packages contained $52.5 billion in emergency supplemental Child Care and Development Fund (CCDF) funds and provided states with historic funding levels to address the challenges…



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