North Carolina child care task force warns of ‘early education crisis’

A panel appointed by North Carolina Gov. Josh Stein calls for raising child care subsidies to head off an ‘early education crisis.’

by Brandon Kingdollar, NC Newsline
July 8, 2025

An early education task force appointed by Gov. Josh Stein earlier this year called for raising minimum child care subsidies in its initial report issued last month.

The panel, announced in March as the state seeks to rejuvenate a child care industry battered by COVID-19 and the rising cost of living, released its first report on June 30 after three discussions on potential solutions.

North Carolina news, culture, and events in one free, award-winning newsletter. Sign up for Cardinal & Pine’s newsletter here. 

Members recommended a statewide child care subsidy reimbursement rate floor and also outlined additional avenues for officials to explore, including greater benefits for child care workers — including free or subsidized child care — as well as partnerships with North Carolina public schools and universities and the establishment of a state child care endowment.

“Our state’s child care system faces significant challenges associated with access, early childhood education workforce recruitment and retention, and affordability,” the report reads. “Many of North Carolina’s child care programs struggle to stay in business due to difficulty retaining teachers and staff. With the average cost of infant care for just one child reaching $11,720 and surpassing the cost of in-state tuition at the University of North Carolina at Chapel Hill, high-quality child care is financially out of reach for many families.”

Task force members, led by co-chairs Lt. Gov. Rachel Hunt and Sen. Jim Burgin (R-Harnett), noted that despite these high costs, many child care facilities in the state operate on razor-thin margins, with some like a family child care home in Cleveland County running at a loss.

Tuition, the task force found, is both inadequate to cover staff wages, supplies, and operating costs and also too expensive for a large portion of families in the state. And that is while pay for child care professionals is too low to maintain a stable work force, with the report placing the average starting salary for early education professionals at just $14 per hour.

These shortfalls translate to a major economic detriment for North Carolina, according to the report.

According to an analysis by the U.S. Chamber of Commerce, the lack of adequate child care in North Carolina costs the state’s economy $5.65 billion per year, in large part due to parents leaving the work force to take on full-time child care responsibilities.

To address these issues, the task force recommended standardizing the minimum amount that child care providers are reimbursed for their care by the state. Currently, state law sets the child care subsidy reimbursement rate at the 75th percentile of a county’s market rate, calculated based on age of the child, star rating of the program, and care setting, yielding more than 3,000 different rates across the state — a formulation that the report finds underfunds care programs in rural counties, providing them thousands less than nearby urban counties.

“All counties that currently receive reimbursement at rates below the floor amount would receive the floor amount instead, while counties that currently receive a rate above the floor would continue to receive child care subsidy reimbursement at their current rates,” the report recommends. “Without an increase in subsidy reimbursement rates for child care centers in rural communities, many are at risk of closing.”

The remainder of the recommendations issued were primarily exploratory in nature, in essence setting an agenda for the task force’s upcoming work. They include researching non-salary benefits that could aid in child care worker retention, looking at partnerships with the University of North Carolina system and other public education institutions in the state, and considering the creation of a public-private child care endowment to help families across the state afford child care, such as those instituted in Nebraska and Connecticut.

Greater support for child care has been a bipartisan priority in North Carolina even amid rising political polarization. House Bill 412, an early education regulatory reform bill that allows for larger class sizes among other measures, passed the Senate unanimously and received opposition from just one House member in June. It was signed into law by Stein on July 1.

NC Newsline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. NC Newsline maintains editorial independence. Contact Editor Rob Schofield for questions: [email protected].