A coalition of local leaders is sounding the alarm over recent state funding cuts to child care and early learning, warning that the reductions could strip hundreds of Bartholomew County families of financial assistance, disrupt the local workforce, force child care providers to reduce staff and limit access to programs critical for school readiness.
The cuts include what the coalition described as “significant reductions” to Child Care Development Fund (CCDF) vouchers and the On My Way Pre-K program, which provide child-care assistance to low-income families, according to a joint statement released this week.
The coalition includes leaders from Heritage Fund – The Community Foundation of Bartholomew County, the Community Education Coalition, Bartholomew Consolidated School Corp., Flat Rock-Hawcreek School Corp., United Way of Bartholomew County, the city of Columbus, Cummins Inc., Toyota Material Handling, Columbus Regional Health, Greater Columbus Indiana Economic Development Corp. and the Columbus Area Chamber of Commerce.
“Locally, these cuts will leave many families without access to affordable child care and high-quality early education, undermining both family stability and workforce participation,” the coalition said in its statement.
The joint statement comes after the Indiana Family and Social Services Administration announced cuts by as much as 35% to CCDF reimbursement rates for providers, citing a $225 million funding gap it claims was caused by “the prior administration’s unsustainable use” of temporary COVID-19 relief funding without a “sustainable” plan to maintain the program once that money ran out.
“We’ve regrettably had to make a tough, but necessary decision to prioritize children over child care providers,” Adam Alson, FSSA’s Office of Early Childhood and Out-of-School Learning, said in a press release last month.
CCDF is a federally-funded program that helps low-income families pay for child care so parents can work, attend school or complete training, according to the Indiana Family and Social Services Administration. However, states manage and set the reimbursement rates paid to providers.
As of July, 316 Bartholomew County children were receiving vouchers, down from 483 in July 2024, according to figures provided by local officials. Currently, there are more than 29,000 children on the waitlist for vouchers.
Local officials estimate that the local providers will collectively see a $31,836 weekly reduction in revenue — about $1.66 million annually — due to the lower reimbursement rates, which took effect this month.
Due to the new rates and declining enrollment because no new vouchers are being awarded, Children Inc. will be laying off 15 teaching staff and close six classrooms by end of the next week, said Children Inc. Executive Director Jill Harden. Additionally, local officials said another child care site that they declined to name will be closing altogether due to the cuts.
“When the parents found out about the reimbursement rates, we immediately lost about 15 kids from that,” Harden said. “…The state really only gave us two or three weeks warning that this was going to happen. We had no planning time for reimbursement rates being dropped to try and plan for that and give families a far-out warning. Their notice was even less than ours.”
Additionally, the state tightened income requirements to qualify for the vouchers, resulting in families that were well below the threshold “are now at the top of the new threshold, and so their co-pays are higher,” Harden said.
“My fear is that the state had loosened up regulations for home providers, unlicensed providers,” Harden said. “That’s where families are going to end up having to put their children, which means less regulations, less monitoring. Or they’ll be with relatives or friends, which isn’t reliable (and) isn’t necessarily high quality.”
“You’re going to see more children entering the school system unprepared,” Harden added. “And it’s also going to affect the economy, because if families can’t work, then there’s going to be an issue with keeping people employed because they can’t find care, or they’ll miss a lot of days because of the unreliable child care that they have.”
Christine Waters, early learning manager at the Community Education Coalition, said the community has not yet seen the “full impact” of the cuts yet, with reimbursement rates unexpectedly changing mid-contract.
“We already know within just one month of some of these cuts, we’ve already had six classrooms closed,” Waters said. “We’re already hearing of teachers being laid off. …If there are children that maybe are 100% private pay, for instance, and then a couple of those children may be in the same classroom that are lower income and do have a subsidized tuition, the whole classroom could still close because those two or three children are no longer able to be there because it takes a fully enrolled classroom to fund the amount of teachers that they need.”
For many Indiana families, access to high-quality child care is too expensive. Hoosier families spend on average about $1,145 per month — about $13,736 per year — on child care, according to figures provided by the Heritage Fund.
Experts say the lack of affordable and accessible childcare has a negative impact on children, families and the economy. Quality child care promotes healthy development in children, enables parents to maintain employment and support their families and bolsters the economy —both by returning parents to the workforce now and by laying the foundation for children’s future success.
A recent U.S. Chamber of Commerce Foundation report found that Indiana’s insufficient child care capacity costs the state’s economy $4.22 billion each year by driving parents out of the workforce, reducing tax revenue and straining households.
“Our biggest concern is that going into these funding cuts, we already were not able to serve all of the children and families that need access to quality child care and early learning,” said Kristen Munn, vice president of operations and development at the Heritage Fund. “It’s a precarious business model, kind of like public education. …Ultimately our fear is that more providers will close, more classrooms will close, and that local families that need to get to work will not have access to safe quality care.”
To help lessen the impact of recent budget cuts, fundraising is underway to provide local child-care and Pre-K scholarships. Cummins, Heritage Fund, Toyota, CRH, Bartholomew Consolidated School Foundation and German American Bank already have pledged support, ensuring families have immediate relief while local and state advocates work toward restoring funding at the state level, the coalition said.
However, local leaders emphasized that only strong state-level investment can solve the issue. In the meantime, officials expect to see more programs close and fewer classrooms unless funding is restored.
“We’re going to see entire programs likely shut down, and then we’re going to see classrooms shut down, and so it begs the question of when families want to come to Columbus to work, where are they putting their children?” Waters said.