The governor on Tuesday approved roughly $14 million to go towards child care solutions across Iowa through the Child Care Business Incentive Grant (CCBI). This money is supported by federal COVID relief funds, and is directed at 13 businesses that plan to build or renovate child care infrastructure in their communities.
The businesses were chosen after a competitive application process, which was decided based on factors like whether their projects are in areas of high demand or will serve children of different ages, according to Iowa Workforce Development Director Beth Townsend.
“The governor believes firmly that employers and communities are in the best position to make decisions about how to best address their child care needs,” Townsend said. “Often it’s just a matter of getting some additional resources so that employers and communities can implement those ideas.”
She added that getting employers to invest in these solutions by working with child care centers in their communities is more likely to be sustainable in the long term, which will be necessary after the funding runs out.
“One of the factors in the evaluation of the awards is: are you going to be able to keep this project going once the original money runs out?” Townsend said. “Getting employers and communities involved together, I think, helps make sure that that’s going to happen, because it doesn’t do us any good to invest in a child care solution that’s going to close their doors inside of 18 to 24 months.”
The new grants are expected to create 875 new child care slots.
An initial round of CCBI Grants was administered in 2022, and a portion of the new funds are going to businesses that received funding three years ago. Townsend said that because of inflation in 2021 and 2022 and unforeseen costs, the governor wanted to make new funding available to finish or increase the scale of those projects.
One recipient is Reach For Your Potential in Iowa City, a new child care center for low- and middle-income families that bought its property in December. Executive Director Staci Humiston said the organization plans to use the nearly $1 million of new funding for a handful of renovations and additions.
Some of these include updating the property’s HVAC, adding an ADA compliant restroom and purchasing playground equipment. Humiston said that after the grant funds run out, the center will be financed by Hills Bank.
Separately, Johnson County is expanding a program that provides additional help for families that receive child care assistance from the state.
First approved in 2023, the county’s program is designed to make child care more accessible for low-income families by paying participating centers the difference between their tuition and the amount provided from the state, up to a certain amount.
Last year, the maximum payment to providers was $200. This year, it’s $300.
“Families who have child care assistance can often have a hard time finding a child care center that will take their child,” said Youth and Family Services Manager Laurie Nash. “And one of the reasons is because those centers don’t have the ability to lose money like they do on child care assistance.”
The county’s program is also now allowing three-year-olds to participate. Previously, only one- and two-year-olds were eligible. The age restrictions were changed after the county realized centers were struggling to support three-year-olds.
Because the program is supported by federal COVID relief money, funds will expire in December 2026. After that, Nash said, the county is working to support the program by expanding its child care solutions fund and engaging in legislative advocacy to raise the money administered by the state through child care assistance.
