Throwing money at Maine’s childcare system won’t solve its underlying problems


Gov. Janet Mills announced in July that $10 million in federal relief funds were being allocated to “help child care businesses start or expand.” Given that vast swaths of Maine are considered to be in a “child care desert,” this may sound like a great idea, but is the best solution really to throw money at the problem?

The press release published on the governor’s website claims that the $10 million in grants have the potential to create 3,500 new child care slots statewide, primarily in home-based, or family, child care businesses. According to Maine State Law, a “family child care provider” is a person who provides child care out of their home to anywhere between 3 and 12 children under the age of 13 on a regular basis. Those looking to start such a business are eligible to receive up to $8,500, which is expected to cover approximately 75% of their startup costs. New family child care businesses are also eligible to receive an additional one-time payment of $2,000.

The $8,500 grant “may be used to renovate a home to accommodate high quality child care,” in addition to purchasing “educational materials” and furniture, “creating an outdoor learning environment,” obtaining “health and safety supplies and other materials required to be licensed,” as well as “having sufficient working capital on hand for the first few months.” Grants as much as $25,000 are available for owners of both new and existing family child care businesses who are adding a room onto their home exclusively for their child care business. Grants up to $4,000 are also available for existing family child care businesses that are interested in expanding. Due to the acute lack of child care in rural Maine, priority is being given to applicants located in Aroostook, Franklin, Penobscot, Piscataquis, Somerset and Washington counties.  

In her press release, Gov. Mills explicitly calls out the desperate need for greater access to child care in Maine, especially in the more rural parts of the state. “Maine’s current and future workforce depends on accessible, affordable child care,” she said. 

Health and Human Services Commissioner Jeanne Lambrew and Office of Child and Family Services (OCFS) Director Todd Landry also weighed in on the immense importance of child care. “Jumpstarting new child care businesses and creating new child care slots will enable parents to take new jobs or pursue their education knowing that their children are safe and well cared for,” they said.

The governor’s statement also quotes the President of Coastal Enterprises, Inc., Kieth Bisson, who explained just how integral accessible child care is for the economy, both on a personal and public scale. “Finding child care is a challenge for most working parents,” he said. “Lack of child care keeps parents out of work, affecting a family’s economic well-being and causing a ripple effect of lower participation in Maine’s workforce.”

From 2008 to 2021, Maine saw a sharp decline in the number of licensed child care providers operating in the state. In some parts of Maine, the number of licensed family care providers dropped by more than 50%, with Lincoln County seeing a staggering 61% decrease during this period. 

In addition to an acute shortage of openings, those slots that are available are oftentimes unaffordable. According to the 2021 Market Rate Survey released by the Maine Department of Health and Human Services, family care costs, on average, $12,480 per year to care for an infant or toddler, $7,140 for a preschooler, and $5,360 for a school-aged child. Facility-based care is even more expensive: $18,750, $13,117, and $11,205, respectively. For comparison, the annual in-state tuition cost at the University of Southern Maine for the 2022-23 academic year is $11,940. In the State of Maine, sending an infant or toddler to a family care provider is more expensive than sending a high school graduate to college.

While grants may potentially make it more appealing to start a child care business in the state, it is unlikely this is going to provide a long-term, sustainable solution to the lack of child care, let alone affordable child care. Rather, it would be more beneficial for the state to take a critical look at the tangled regulatory environment it has created for child care providers. 

All told, there are roughly 200 pages of regulations that apply to child care facilities, nursery schools, and family child care providers. Although it may be intuitive to think that strict regulations on child care providers are necessary to ensure safety and promote cognitive, emotional, and social development, this is not the case. According to a report by the National Center for Policy Analysis, “state and local regulations significantly affect the price of care without improving quality.” 

The effect of overregulation on the price of child care is felt especially hard by “the poor and working class” as “it makes daycare rarer and more expensive.” A paper by the RAND Corporation found, unsurprisingly, that “regulations have an economically significant effect on the price of childcare, which in turn affects both the demand of regulated care and the labor force participation choices of the mothers.”

Even if Gov. Mills’ grant program leads to more child care providers in the state, current regulatory costs could mean that the resulting growth in providers still may not translate to affordable services for working families. Worse yet, the providers may end up having to close their doors not long after opening them if the state continues down its current regulatory path.

Therefore, it would likely be far more effective for Maine to focus on solving the problems it has created for parents and providers. Rolling back excessive and unnecessary requirements would reduce barriers to entry, lower costs for working parents, and allow for more providers to open their doors in underserved areas of the state. 

Among the top priorities for the Maine Legislature when it comes to solving Maine’s childcare crisis ought to be loosening restrictions on the minimum child-to-staff ratios, especially for family care providers, eliminating minimum education requirements, and increasing the number of children that may be watched by unlicensed providers, particularly if they are siblings.

In Maine, minimum required child-to-staff ratios are far more stringent than in the majority of states nationwide. There are currently 28 states that allow staff members at child care facilities to supervise more 5-to-13 year olds than Maine does. While regulations such as this are targeted fundamentally at controlling the quantifiable and easily-observable aspects of child care, a 2015 study by the Mercatus Center found that the nature of interactions between children and providers is a far better indicator of a facility’s quality and is more closely related to positive childhood outcomes.

Furthermore, in Maine, a family child care provider, as well as all members of their staff, must have, or be in the process of obtaining, a high school degree or an accepted equivalent. According to the 2015 Mercatus report, this type of education requirement increases the cost of childcare anywhere from 22% to 44%. Since higher compliance costs may lead to lower wages for child care workers, this could be a driver of “high staff turnover and a low commitment level, which can negatively affect the quality of child care.” Therefore, Maine parents are being saddled with a significant price tag for a qualification that has no tangible impact on the quality of care their children receive.

Additionally, in nearly all of the counties targeted by the governor’s grant program, the percentage of the population aged 25 and older who have obtained a high school diploma is below the state’s average. Consequently, the places in Maine that are facing the most serious childcare shortage are largely the same places where fewer people are legally qualified to work in the industry.

Furthermore, the Maine Legislature should eliminate regulations which do not directly impact children’s health and safety but are instead aimed at controlling the “quality” of the care. Although quality should certainly be a consideration for parents when they are deciding where to send their children, strict government regulation is not an appropriate intervention. 

Meeting quality requirements can be expensive, and in order to stay in business, providers must pass those costs along to parents. By requiring that all facilities provide certain subjective measures of “quality,” parents who cannot afford to pay top-dollar for child care are effectively priced out of the market. This is not to say that providers should be allowed to operate substandard facilities, but rather that licensing requirements should not prevent the development of a reasonable price gradient so that parents of all income levels can afford care for their children.

While in a perfect world, all children would have the opportunity to receive the highest quality care available, in reality, this is simply not feasible. It would be better for parents to have a licensed, budget-friendly child care facility available to them than to force them to make difficult decisions of prioritizing their child’s well-being over their personal employment.

Instead of taking action to address this overregulation, however, the 130th Maine State Legislature did the exact opposite. They passed into law a bill which re-emphasized that all child care providers must be licensed and, notably, significantly increased the industry regulatory board’s power to manage the “quality of the program of child care.” 

The Governor’s Office for Policy Innovation and the Future (GOPIF) has also taken steps to further codify the government’s role in determining quality standards for child care providers. One of the goals announced by the Office’s Children’s Cabinet was to “bring all licensed child care programs into the state’s quality rating system,” known as the Quality Rating and Improvement System, or QRIS. While encouraging greater participation in the program is not necessarily as restrictive as regulations and licensing requirements, the move signals that Maine’s current administration likely has no intention of reducing their footprint in Maine’s child care industry. 

Not only has the state failed to make progress toward opening the door for affordable child care, but it doubled down on the maintenance and perpetuation of an excessive and expensive regulatory regime. 

In addition to reforming the conditions under which Maine’s licensed child care providers operate, the state could also greatly help parents seeking affordable child care by loosening the restrictions on unlicensed providers, specifically by raising the cap on the number of children they may watch at one time. Once again, children’s safety should never be put in jeopardy, but regulations must also be realistic. Currently, unlicensed providers may only watch two children who do not reside in the home before licensure is required.  Moving to raise this ceiling would, by no means, be unprecedented.

In 2021, the Legislature had the opportunity to move in the right direction on this issue as they faced a bill that would have codified an executive order issued by Gov. Mills during the COVID-19 pandemic that allowed unlicensed providers to care for up to three children, four if two of them are siblings. If passed, this bill would have brought Maine into alignment with national norms. Thirty-six states, including Washington DC, allow providers to watch a greater number of children than Maine does before being required to obtain a license. Unfortunately, the Legislature ultimately struck down the bill by nearly-party-line votes in the House and Senate.

When looking to address the child care crisis in Maine, the  state must consider the big picture. In the face of excessive, burdensome, unnecessary, and expensive regulations, it is highly unlikely that providing a grant to cover a portion of the cost to open or expand a family care establishment is going to solve the problem. 

Regardless of how much money providers receive upfront, they are still going to face the same harsh regulatory environment for as long as they continue to operate. If the state truly wants to provide a solution for Maine parents who are unable to find or afford child care, they have to start confronting the problem of overregulation head on.