2021-2023 State Budget
Legislators Reveal Compromise State Budget – No Surprises for Child Care
On Monday, Nov. 15, after months of negotiations, Republican legislative leaders in the NC General Assembly finally unveiled their state budget “conference report,” a compromise budget for the two-year period that began on July 1, and ends on June 30, 2023. With the exception of some local grants using federal one-time COVID-relief funding, there were no surprises in the budget related to child care funding or policies. The two-year spending plan unveiled this week contains the same child care provisions that were included in earlier proposals from the state House and Senate. (Details are provided below in this report.)
As of Thursday, Nov. 18, the compromise budget has passed both the State House and Senate chambers and is headed to Governor Roy Cooper who has stated he will sign the budget into law. While Medicaid expansion is not in the budget like the governor wanted, it will be studied in a committee between legislative sessions. The budget does contain some policy provisions that the governor does not like, including one that would limit emergency powers (like those used for the COVID-19 pandemic) without approval from elected Council of State members and legislators.
The state budget would spend $25.9 billion in the current fiscal year and $27 billion in the 2022-2023 fiscal year. It would transfer $2.3 billion to the state’s “Rainy Day Fund” (Savings Reserve Account), which will bring the total balance to $4.25 billion in 2022-23.
The complete state budget compromise for 2021-2023, totaling nearly 1,400 pages, can be reviewed online by accessing two documents via the following links:
Special Provisions (627 pages)
Money Report (761 pages)
Child Care Provisions in the State Budget Conference Report, 11/15/21
NC Pre-K Rate Increase (NCLCCA Agenda Item) – 2% rate increase in 2021-22 ($1.7 million recurring) and an additional 2% rate increase in 2022-23 ($3.5 million recurring) “to increase the salaries of teachers working in child care centers as a means to address disparities in teacher salaries among teachers working in child care centers versus those working in public schools or Head Start centers.”
Start-up & Capital Grants for Child Care Facilities & NC Pre-K Classrooms (NCLCCA Agenda Item) – $20 million nonrecurring (federal) funding over the two-year budget “to provide grants for child care facilities and North Carolina prekindergarten (NC Pre-K) classrooms in response to the COVID-19 pandemic, particularly those located in child care deserts and low-performing and high-poverty districts.” The Division will award the grants after establishing criteria “in accordance with federal law and guidance.” The grants shall be one-time awards to assist with new or expanded high-quality child care initiatives, as follows:
American Rescue Plan Act (ARPA) Funding – Budgets $502.7 million in nonrecurring supplemental discretionary CCDBG/CCDF funds, as follows:1) Up to $274 million of the funds shall be used for the following:
2) Up to $30 million shall be used to continue to cover all copays for families eligible for subsidized child care through the end of the 2021 calendar year (Dec. 31, 2021).
3) Up to $207.7 million shall be used to build the supply of qualified child care teachers with staff bonuses and other teacher pipeline programs, including apprenticeships, stackable courses, and fast-track programs. (Staff bonuses from DCDEE shall be provided based on the number of months the teacher or staff person has worked at the child care facility with the maximum bonus being provided to a teacher or staff person who has worked at least 12 months at the teacher or staff person's current child care facility.)
NOTE: While NCLCCA pushed for subsidy program rate increases that were not included in the budget, we also pressed legislators for funding to help increase the workforce pipeline and to be sure that child care employee bonuses target retention.
Lead and Asbestos Remediation in School and Child Care Facilities – $150 million nonrecurring (federal) funding from the State Fiscal Recovery Fund to support lead and asbestos remediation in public schools and child care facilities
Smart Start Funding – $10 million/year in each of the two years (2021-2023) for a total of $20 million for Smart Start. The budget give Smart Start flexibility for each year of the biennium for how to use additional recurring funding.
NOTE: NCLCCA joined with the NC Early Education Coalition and Smart Start to push legislators to include $35 million in the budget to expand the WAGE$ salary supplement program statewide, which they did NOT do. There is no designation in the budget for how the $20 million in additional Smart Start funding is to be used.
Child Tax Deduction – Increases the child tax deduction by $500 per child.
Local Grants –
Subsidy (CCDF) Funding – $1.5 million recurring Child Care Development Funds (CCDF) in 2021-22, and $1.4 million recurring CCDF in 2022-23, due to increased availability.
More Budget Highlights/Indirect Impacts on Child Care:
Public & Private Schools –
Tax Cuts & Business Relief –