Child care is a major workforce concern. Why wasn’t it in Gov. Noem’s budget address?

Child care is one of South Dakota’s most pressing workforce issues, with cities, businesses and organizations searching for solutions to keep child care accessible and affordable across the state.

Gov. Kristi Noem addressed it as such on the campaign trail, but it did not appear in her Dec. 6 budget address to the Legislature, in which she outlined proposals she’d like to see lawmakers consider during the annual legislative session in Pierre starting next month.

Noem proposed South Dakota’s largest-ever budget and what she has described as the state’s biggest-ever tax cut, along with improved pay and benefits for state employees, money for new and improved prisons, and free college tuition for National Guard soldiers as some of the biggest headlines.

She also proposed extending paid family leave to cover 100% of pay for state employees — up from 60% — and establishing $20 million in one-time incentives to help private businesses offer family leave plans, spread out over four years.

While it doesn’t address the child care issue directly — such as the declining number of in-home day care providers, long wait lists, labor shortages and the struggle to break even for many child care providers — it is a “worthy start,” said Michelle Erpenbach, president of Sioux Falls Thrive, the community’s cradle to career workforce development initiative.

How South Dakotans are making child care affordable and available

“Offering paid family leave to state employees does a couple things: it provides critical time for families to bond with new children, whether newborns or newly adopted,” Erpenbach said in an emailed statement. “It sets a standard for private employers. Essentially, if the state can provide this for its employees then we should all be able to support young families in this important way.”

Kayla Klein, executive director of Early Learners South Dakota, said she would like to see child care providers prioritized as businesses participating in the family leader initiative program, since the industry is critical to the state economy and would help address recruitment and retention within the industry.

The budget speech failed to address the “workforce behind the workforce” and just how “desperate” employers and parents are to find child care, Erpenbach added. 

South Dakota has one of the highest percentages of working parents in the county. In Sioux Falls, that rate is 84%, which is 19 percentage points above the national average.

“As a community and a state, we need to collaborate around creative solutions that provide appropriate education and compensation – including full job benefits – for child care, early childhood education and after-school care providers,” Erpenbach said. “… Without affordable, accessible care for children of all ages, our economic vitality is at stake.”

Noem also didn’t mention the work already done by her office and state legislators to alleviate costs for child care providers across the state.

Over $62 million in stabilization grants were awarded to more than 600 child care providers across the state through the American Rescue Plan Act, part of $100 million allocated to the state from the federal government for child care needs in 2020. The remaining $38 million in funding has not reached South Dakota providers yet.

That money was already handled by the Legislature last session, so there wasn’t a reason to touch on it in Noem’s address. The South Dakota Department of Social Services is planning how to use the $38 million in remaining funds to improve the state’s child care system based on feedback provided in public listening sessions over the summer.

Klein said she’s excited to see what comes from that funding and in the upcoming legislative session.

“Even though the ARPA discretionary dollars were not specifically mentioned in the budget address, we know that there are some wonderful plans for those dollars to help strengthen and expand the field,” Klein said. “We’re looking forward to the roll out of those dollars.”

Klein added that in her discussions with DSS, the top priorities on how to use those funds will be geared toward the workforce, affordability and accessibility of child care, and easing the process of providers becoming registered and licensed in the state.

Noem also committed to helping child care providers access health care benefits during her reelection campaign, which advocates believe will be a step forward in addressing the industry’s labor shortage. That initiative will have to be tackled during the legislative session.

Noem announced in her budget address that she plans to talk about other family related issues at her State of the State address in January, including funding for adoption, pregnancy and postpartum care for Medicaid patients and funding scholarships for foster care.