By Ryan McKinnon

Low barriers to entry means there are plenty of providers, but quality suffers and money is scarce.

It is 6:45 on a Friday morning, and Carina Piovera is trying to enjoy a cup of Cafe Bustelo coffee in the kitchen of her Bradenton day care, 14 minutes before the first kid will arrive.

The owner and director of My First Steps child care center has reams of paperwork due to the Early Learning Coalition of Manatee later in the day. Nap time will be filled with administrative tasks, and she needs to pay her staff.

As the first kids arrive at 6:59, Piovera receives hugs and updates on what took place in the 13 hours since she last saw them.

“I coughed last night,” says one.

“This morning I had a tummyache,” says another.

It’s toddler small-talk—the equivalent of commenting on the traffic or weather.

“I’ll see you at 6,” parents say as they leave, headed to work at restaurants and construction sites.

Payment for the week is due at the end of the day, so in 11 hours those parents will return with envelopes of cash. For some, the fee will be close to half their pay for the week.

The high cost of child care in Florida is well-documented—a year at My First Steps could easily cost upward of $8,000, more than the base tuition at University of Florida. Though the retail workers, security guards and waitresses who rely on My First Steps struggle to afford that, Piovera can’t charge any less.

But thousands in tuition doesn’t mean child care workers are getting rich.

A parent whose 3 or 4-year old child stays with Piovera from 7 a.m. to 6 p.m. Monday through Friday will owe her $165 for the week. That comes to $3 an hour for Piovera and her staff of four.

Florida’s child care industry is a case study in market failure—providers are selling their services at fire-sale prices, but it is still too expensive for the consumers.

Providers are just scraping by while parents are breaking the bank to pay for child care. Although the issue isn’t isolated to the Sunshine State, child care experts point to a multitude of Florida-specific factors.

Low barriers to entry means more centers open, creating more vacancy at existing providers. State funding remains flat. And too many providers aren’t demanding to be paid what their services are worth.

Meanwhile, research is proving that high-quality early learning is increasingly valuable. Providers are shedding the “day care” label as academic studies prove the difference a high-quality learning environment makes for a child from birth to age 5.

Broken state funding

There are two main government funding streams for early learning in Florida: voluntary prekindergarten dollars and school readiness funding, and both have shrunk substantially in the past decade.

The state has decreased funding for VPK by 19 percent per child since 2007, once adjusted for inflation, while the number of participants has increased by roughly 40 percent. In 2007, 124,390 of the state’s 4-year olds participated, and, in 2017, 174,252 children were enrolled.

School-year VPK providers get paid $4.23 hourly for providing three hours of education-focused prekindergarten. Summer instructors receive $7.61 hourly during the summer, but the summer instructors must have bachelor’s degrees, rather than the associate degree that teachers must have the rest of the year.

Several Manatee and Sarasota child care providers said that providing VPK costs them a few thousand dollars every year, but they continue to do it because it gets families in the door. Since the program only funds three hours daily, very few working parents can simply rely on VPK. Most will pay for what providers call “wraparound care”—the hours before and after VPK.

School readiness funding is used to reimburse child care providers for caring for low-income children. When a waitress or migrant worker is looking for child care, school readiness dollars can help to offset the cost so that low-income families can have both parents working.

The state distributes the money to the 30 early learning coalitions across the state, and the coalitions set reimbursement rates based on the specific needs of their community.

Manatee’s rates have not changed in eight years. Ever since 2010, Manatee has paid $101.15 per week for 3- and 4-year-olds at centers like Piovera’s. The story is much the same in Sarasota.

In 2001, lawmakers allocated $681 million in state and federal funding to the program. Last year, the total allocation was $610 million. That $70 million decrease is a 40 percent reduction once adjusted for inflation.

But to simply attribute the static rates on Piovera’s reimbursement sheet to a lack of money is to ignore two major problems within the Office of Early Learning and the state Legislature: The OEL can’t answer basic questions about why each county receives the amount they do, and South Florida lawmakers are fighting to keep it that way.

In 1999, when the Office of Early learning first distributed school readiness funds, it gave each county a set percentage of the total pot of funds.

Those allocations have remained the same for nearly 20 years, despite shifting demographics. Some, like Manatee and Osceola, have had large increases in the number of low-income children living there, and others have far fewer poor children than they did in the late ’90s, but the allocations remain the same.

A 2012 attempt to establish a formula based on current demographics would have cost Miami-Dade $22.3 million over five years, with that money shifting to coalitions with greater need.

As the most powerful legislative delegation in the state, Miami-Dade was able to block the attempt to create an equity-based funding formula.

Sen. Greg Steube, R-Sarasota, said the system made no sense to him, and last year filed legislation that would require the state to distribute school readiness funding to counties based on need, rather than an unexplained and unchanging list of percentages. The bill went nowhere.

“Basically, the response I got was that this was going to be very controversial,” he told the Herald-Tribune in February.

Quality versus cost

During story time at My First Steps, Marlo Porter, a Head Start teacher who works for Piovera a few weeks each summer, is teaching the children how to say words like “octopus” in Spanish when two little boys begin arguing. Porter tries twice to get their attention, each time unsuccessfully, so she begins singing her ABCs, expressively nodding as the children begin to join in.

Soon the two squabblers have forgotten their dispute and are singing along.

Porter uses several opportunities to work on other skills that the kids will need when they enter kindergarten. She dismisses the children one at a time, asking them to name the number of fingers she is holding, roll their hands over one another or repeat a multi-syllabic word. She sings constantly, in Spanish and English, inviting the kids to sing with her.

Teachers like Porter—who have a Mary Poppins-like ability to turn every moment into a lesson—are not easy to find.

Piovera pays Porter substantially more than most teachers because of her credentials and experience, but the average teacher working at My First Steps earns $9 to $12 per hour. The average annual wage for child care providers in Florida is $23,760, according to the U.S. Bureau of Labor.

During nap time, with a room full of snoring 4-year-olds on mats behind her, Porter says she was originally ashamed to be going into child care, thinking it was a sign she couldn’t do much else. But the more she learned about childhood development, the more she respected her own field.

“You might be able to get those kids quiet, but if you don’t understand theory or what you are looking for, all you are doing is just being a body,” Porter says. “The children won’t be growing.”

Finding care is tough

One thing researchers, parents and providers all agree on is this: Finding high-quality child care in Florida is tough.

School readiness dollars don’t come with many strings attached. Other states require providers who accept state funding to meet tougher education standards, like lowering the number of children per teacher or requiring more rigorous teaching certifications.

But Florida has not required providers to meet standards beyond basic health and safety requirements in order to receive state funding.

A 2014 study by UF’s Lastinger Center found that state funding “is not having the impact that they could because there are few requirements on programs that provide school readiness services.”

Florida’s voluntary prekindergarten program has the most lax requirements in the nation, according to the 2017 National Institute for Early Education Research’s State of Pre-K report. The report lists 10 benchmarks that states should meet to ensure children receive quality care, such as lower teacher-to-child ratios or tougher credentials for teachers. Florida meets only two of the institute’s 10 recommended benchmarks.

Steven Barnett, the co-founder of the institute, said Florida’s system of minimal regulations created a marketplace where there is an incentive for low-quality child care centers to open.

“What we do now is offer families subsidies for low-quality care,” he said.

Barnett said competition is typically good for the consumer, but in an industry like child care, too much competition simply drives down quality as providers battle it out to offer their services for the cheapest price. The consumers of child care often have no idea whether the product they are getting is high-quality or not.

“If your older kid is in school and their teacher is not doing well, you have a much easier time figuring that out,” Barnett said. “With a 3- or 4-year-old, that’s very difficult. They are almost all going to say to that they love their teacher.”

Too many providers

During nap time Piovera sits at her desk and completes the work a secretary would do if she could afford one.

She files paperwork to get reimbursed for food costs. She has to fax in the attendance sheets to the Early Learning Coalition.

She’s a multitasker, chatting with her employees in Spanish and English while she tallies up numbers. The kids are heavy sleepers and the laughter of the women in the room doesn’t seem to bother them.

The dim lighting, lullaby music and small plastic cups of coffee are a welcome shift in ambiance after a morning of nonstop interaction.

When the day started at 7 a.m., a silent two-hour nap session seemed ambitious. But after five hours of Lincoln Logs, stories, Play-Doh, how-many-fingers-am-I-holding-up pop-quizzes, dancing and etiquette lessons, the kids are wiped.

One boy just a few feet from Piovera snores while she describes the plight of many providers who serve a majority of low-income children: their parents can’t afford to pay what it costs.

Piovera says earning more money as a provider is simple — just serve families who can actually afford to pay.

“Let’s say I want to attract rich people. I would have to open a new center, call it My First Steps ‘Academy’ and move to Lakewood Ranch” she says, referring to the affluent master-planned community that straddles the Manatee-Sarasota county line.

Easy access to state cash

Although many child care providers worry about the cost of increased regulations, several experts say Florida’s lack of regulations may have made it tougher for these businesses to turn a profit.

Easy access to state cash leads to an excess of providers, said Brittany Birken, the CEO of Florida Children’s Council. More providers means tougher competition and higher vacancies.

The 2014 Lastinger Center study found that Florida’s child care providers had a 41 percent vacancy rate.

That means many were paying for space, staff and supplies for students they weren’t serving, and it means many providers were leaving money on the table.

That rate is likely lower now because the report is based on 2012 data when higher unemployment meant fewer parents needed child care. But Abby Thorman, manager of early learning innovations with UF’s Family Data Center and a major contributor to the study, has continued to track the issue, and she said vacancies are still a major problem in Florida.

“When the market is saturated, it’s very difficult to find high-quality care,” she said.

Janet Kahn, executive director of the Early Learning Coalition of Sarasota, said she believes Sarasota has avoided statewide trends of market over-saturation, but she said that is based on anecdotal evidence and the fact that the community has gone from 260 providers a decade ago to 185 today. Kahn said the coalition was looking into collecting vacancy data beginning next school year.

An informal survey of 14 child care providers in Manatee and Sarasota showed an average vacancy rate of 29 percent. Some were happy operating under capacity, while others are trying to max out. One said operating at full capacity was the “uncomfortable, after-Thanksgiving kinda full.” Another, with a 40 percent vacancy rate, has a waitlist because she doesn’t have enough staff to meet the demand. Others said they could afford to not be fully enrolled because they were sponsored by a church or other organization.

For some, underenrollment is a choice. The Circle of Friends preschool in Sarasota has capacity for 70 children, but currently only has 40 enrolled. Director Claudia Drimmer said being under capacity allows her more space to offer higher-quality programs, and she is able to charge more to make up the difference.

Providers serving low-income families, however, are under greater pressure to make sure every spot is filled.

“If you are not full, you are in trouble,” said Louise Stoney, an early learning fiscal expert who co-founded Opportunities Exchange, an organization that advocates for providers to pool their resources in order to be more profitable.

Julissa Caballero, the director of Tiny Tots University in Palmetto, serves mostly low-income families. She said she has space for 140 kids, currently has 114 enrolled and has a clear goal: Fill those open spots.

“We want to be at 100 percent,” she said.

Piovera has a maximum occupancy of 35, and she always wants to be at 100 percent. That is not easy when competitors just up the street offer services for $20 less weekly per child.

Piovera raised her rates last month by $4 per day for the first time in 5 years, and twelve families pulled their children out for a cheaper provider.

To parents like Riley Clarkson, 25, a security guard with two children under the age of four, quality is great. But cost is the top consideration.

“I had to find something I could afford,” she said.

Legislative answers

Lawmakers think they have a solution.

In March, Gov. Rick Scott signed HB 1091 into law, establishing minimum standards for providers to receive school readiness funds and giving high-quality providers a chance to receive more state money.

Beginning this fall, trained evaluators will assess providers on how well teachers interact with children and how engaged children are. High-quality centers could receive up to 15 percent more in school readiness funding, and providers who do not meet the minimal threshold could be suspended from funding.

A decrease in low-quality providers can increase demand and profitability for better centers, said Birken, the Florida Children’s Council CEO who helped develop the legislation.

Centers that don’t make the cut could continue receiving school readiness funds if they are necessary to meet the need of the community.

Florida lawmakers passed HB 1091 just a week after Congress’s omnibus budget deal that included $5.2 billion for child care and development block grants. That nearly doubled the federal contribution. As a result, Florida will — unexpectedly — be getting roughly $137 million in new funding, according to Christine Johnson-Staub, a senior policy analyst with the Center for Law and Social Policy in Washington D.C.

“It ended up being incredible timing,” Birken said.

While a massive influx of funding to early learning is nothing she opposes, Louise Stoney, the early education finance expert, said providers need to realize that more government funds won’t fix the problem.

“Just increasing rates will not make child care centers profitable,” Stoney said. “The problem is much bigger than just rates.”

The collision of market forces and government inaction has turned running a profitable child care center into a challenge worthy of the savviest, most cutthroat entrepreneur. But those aren’t the people who typically get into the child care business, Stoney said.

“The biggest problem is lack of very skilled fiscal management. That’s not meant to be a criticism,” Stoney said. “Most people who lead these programs are professionals in child development. They are not accountants or bookkeepers.”

Stoney said many providers don’t know the exact unit cost per child, so they don’t charge enough, and she said they too often leave fees on the table.

It’s a mindset that the prosecutor in Piovera, who once had her sights set on law school, loves. Be tough. Make the parents pay up. Turn a profit.

“You’ve got to be able to smile at the kid, and then tell the parent, ‘You need to pay me,’” Piovera says.

But Piovera also admits that she only charges parents for 9 hours of care, even when the child stays for 11. She said she has no other option.

Piovera was doubtful when she heard about the new money coming into the system through HB 1091.

“They always say that,” she says.

‘Like a second mother’

At 5:54 p.m., the last kid is picked up from My First Steps. It has been 10 hours and 53 minutes since the day began.

Robert Haynes, 32, came to drop off his payment even though his daughter had gone home early that day. He wanted to avoid the $35 late fee that Piovera sticks to. Haynes, who is a supervisor at a cabinet shop, said he had been bringing his daughter to a cheaper nearby center, but she came home several days saying she was hungry. He said the place had a bad smell to it, and he wondered what was going on when he wasn’t there.

My First Steps, even though it was more expensive, was worth it to him. Piovera is “like a second mother,” he said.

Sitting at her desk, Piovera opens the envelopes and counts the cash as the center slowly empties. Earlier in the day, she had talked about her regret of never becoming a prosecutor.

“Money-wise? Yes, I regret it,” she says. “But I love this.”