Before 2020, no public funds were available for the development of child care facilities in Colorado. At the time, only a handful of private funders supported the expansion of family child care homes. In 2020, microgrants were introduced and funded through a federal Preschool Development Grant (PDG). The response from providers was overwhelming. With microgrants, entrepreneurs could purchase materials and access coaching. However, the funding could not be used for facility capital improvements. Funding to purchase, renovate, or construct facilities remained an outstanding need for new and expanding programs.

Shortly after the PDG-funded micro-grant opportunity was launched, the Colorado legislature was able to mobilize during a special session to invest state general funds to create the Emerging and Expanding Capital Grant program ($16 million) for child care programs and the Employer-Based Child Care Programs ($50 million) for businesses interested in offering child care to their employees. The state is also planning to conduct a Facilities Needs Assessment to better understand barriers to opening new programs, maintaining existing programs, and expanding existing licensed programs. The solution involved these steps:

• Conduct a Facilities Needs Assessment to better understand barriers to opening new programs, maintaining existing programs, and expanding existing licensed programs.

• Identify capital funding to support emerging and expanding programs to meet licensing regulations.

The state has identified additional needs and costs because of this work. Ongoing maintenance of licensed child care facilities is a continued need outside of the scope of this funding. Many child care programs cannot keep up with these costs under existing revenue structures. This puts programs at risk of closing if they cannot maintain their buildings.

• Facility innovation and expansions come with unintended costs and opportunities. The expansion of facilities increases property taxes. The team hasn’t been able to change property tax policy, but some advocacy groups are studying this issue. Additionally, nonprofit child care programs are able to participate in tax breaks and for-profit child care programs cannot. Making tax breaks universal is an important opportunity to address through legislation.

• Public-private partnerships can build the capacity of employers to offer child care. The state partnered with an external entity, Executives Partnering to Invest in Children (EPIC), to provide technical assistance for employer-based child care. This expanded the capacity of the state to develop employer-based child care.

• Hiring a full-time employee to support the facilities and capital grant work proved to be more efficient. Prior to this, the facilities and capital grant work was spread across multiple employees. With a dedicated person focused on these projects, the CDEC has better-captured lessons learned that will be included in the Facilities Needs Assessment.

• Ensuring sufficient capacity with vendor support is a final consideration. Technical assistance from EPIC has supported connections with a licensing specialist to ensure that expansion plans will meet licensing needs. The Early Childhood Council and child care licensing met with partners throughout the two new capital grant program processes to ensure that the project was aligned with licensing standards as it progressed.

This strategy has generated over 5,000 child care slots.