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Bill could create revolving loan fund for Maryland child-care providers

A revolving loan fund benefiting Maryland child-care providers could be created within the state budget if legislation moves forward.

As drafted, Senate Bill 0919 would establish the interest-free loan fund with an initial state investment of $30 million, paid to the account in the span of the next three years.

State Sen. Mary Washington, D-Baltimore, introduced the legislation to members sitting on the Senate Budget and Taxation Committee. The panel held a hearing on the bill on March 15.

While numerous child-care providers across Maryland were the recipients of assorted state and federal loans and grants related to the pandemic, Washington said the industry is still struggling and in need of a lifeline.

“We are looking at different ways of helping those child-care providers who have survived, while also working to encourage new providers to enter the industry,” Washington said.

The goal of the bill, Washington said, is to bring stability to the childcare industry.

“We need to invest in child-care businesses to ensure Maryland families have access to safe, quality care,” she said. “This legislation will allow providers to grow.”

At the bill hearing, Christina Peusch, executive director of the Maryland State Childcare Association, provided the Senate panel with the pandemic’s impact on the industry the past two years.

Since March 2020, Peusch said Maryland shed 855 licensed child-care operations, representing a 10% decline. At the time of the onset of COVID-19, Peusch said Maryland had on record 7,933 child-care businesses; two years later, she said the figure is down to 7,078 operations.

In her testimony to the state Senators, Peusch said the struggles within the industry have impacts across Maryland’s economy.

“Prioritizing child-care for no-interest loans for recovery efforts aligns with the understanding that child-care is essential and an economic driver,” Peusch said.

While the state and federal loans and grants have brought a degree of stability within the industry, Peusch and other speakers said child-care businesses continue to struggle coming out of the pandemic for a variety of reasons.

The industry, in general, is run on thin margins, Peusch said, and businesses contend with tuition dependency and high government regulations.

“Facilities are a huge obstacle to operating childcare,” said Laura Weeldreyer, executive director of the Maryland Family Network. “Licensure has, as you would expect, exacting requirements to the health and safety of our young children.”

From her vantage point, Weeldreyer said she viewed SB 0919 as a means of helping ensure Maryland’s most vulnerable families in lower-income areas receive services.

“Accessible, high-quality child-care is a public good,” Weeldreyer said.

Carolina Reyes, owner and director of Laurel-based Arco Iris Bilingual Children’s Center, said each child-care business within the state faces its own unique sets of circumstances, based on location and business model.

“We would like to remain viable,” Reyes said in her testimony to lawmakers. “We would like to provide uniqueness in what we can offer in our centers.”

This article was originally posted on Bill could create revolving loan fund for Maryland child-care providers

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