Reynolds puts $25M of ARPA funds toward employer child care incentives

$20 million for infrastructure and $5 million to support partnerships

DES MOINES – Gov. Reynolds announced today a new Child Care Business Incentive Grant Program to encourage employers to offer child care as a benefit to their employees.  
The Child Care Business Incentive Grant Program will provide a total of $25 million to support child care projects across the state. $20 million will be utilized to support local infrastructure investments to build or expand child care capacity, and $5 million will be used to support arrangements between employers and child care facilities to expand and reserve child care slots. Potential projects could include the creation and development of an on-site child care center or a partnership with an existing child care center to create new child care slots paid for by a local employer. 
“I’ve heard from both parents and employers that child care is a barrier to work in our state,” said Gov. Reynolds. “One of the top recommendations from my Child Care Task Force was to incentivize employer investment in child care. This program will do just that by encouraging employers to help deliver child care solutions to their employees, thereby bolstering opportunities for recruitment and retention of workers.” 
“Creating flexible options for child care at work not only helps families, but it also makes it easier for employers to recruit and retain the skilled workforce they need,” said Beth Townsend, Director of Iowa Workforce Development. “It is vital to our economic growth that we provide parents with reliable and affordable child care options, especially those who are looking to reenter the workforce.” 
 “Access to quality child care is critical to the success of working families,” said Kelly Garcia, Director of Iowa’s Department of Human Services. “This program underscores Iowa’s commitment to working families by putting child care where it’s convenient for parents, children, and employers.” 
In March 2021, Gov. Reynolds launched the Child Care Task Force to address the child care shortage in Iowa. While Iowa is a national leader in the share of households with all parents working, 23 percent of Iowans live in a “child care desert,” and Iowa has lost 33 percent of its child care businesses over the past five years. It’s estimated that Iowa’s child care shortage costs the State’s economy roughly $935 million annually in lost tax revenue, worker absences, and employee turnover.
Gov. Reynolds has directed state agencies to implement many of the report’s recommendations, investing more than $500 million of state and federal funds to address the crisis. Investments include the Child Care Challenge Fund grants, which will help to create an estimated more than 9,000 new child care slots across the state, as well as the Child Care Stabilization Grants and Recruitment and Retention Bonuses for Child Care Workers.  
Information on the Child Care Business Incentive Grant Program is now available here. The state will begin accepting applications on IowaGrants.gov starting on Friday, June 17th. Applications must be submitted by Monday, July 18th
To read the full Child Care Task Force Report, click here
Federal ARPA funds are being allocated for this grant program. 

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