Lack of Approved Child Care Providers May Slow Rollout of San Francisco’s Expanded Subsidies

When Daniel Zimmerman heard that San Francisco would offer free or low-cost child care to more families, he went online to make sure he and his wife qualify for a discount and started dreaming about having another baby.

For the last few years, the couple has been paying about $3,500 per month to send their children, ages 2 and 5, to a Spanish immersion preschool. Zimmerman said even though they earn six figures — he’s a nurse, and she’s a dietician — keeping up with the high cost of child care leaves them “basically in the red every month.”

“We’re not saving money, but we figured, especially when they’re young, we’ll just weather the storm until they get into public school,” he said.

The prospect of getting financial aid made him think they could raise three kids in the city. But he may need to brace for some snags when he starts looking for child care.

Under guidelines set by the city Department of Early Childhood, income-eligible families can only select from nearly 600 child care programs within a pre-approved network. That might limit parents’ choices at a time when San Francisco is expanding child care subsidies to middle-income earners as part of a broader push to make the city affordable for families.

Last month, Mayor Daniel Lurie announced that a family of four making less than $234,000 a year can get free child care, and starting in July, those earning up to $312,000 annually will qualify for a 50% discount. The changes put San Francisco ahead of other major cities in offering nearly universal access to child care.

Up to 12,000 kids under age 5 will be eligible for the newly expanded subsidies — though fewer than half are expected to enroll — paid by funds from Baby Prop C, a 3.5% tax on commercial property leases.

“A lot of people are excited and have a lot of questions,” said Mark Ryle, CEO of Wu Yee Children’s Services, an agency contracted by the city to refer families who qualify for subsidies to child care providers with available spaces. “We’ve seen a pretty significant uptick in inquiries around the tuition credit program.”

Some families are discovering, though, that getting public funding for child care comes with a catch.

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When Danielle Eichenbaum learned she qualified for the city’s subsidized child care, her toddler was already enrolled in Daycare Bumblebee in the West Portal neighborhood. She wanted him to stay — not only with the caregivers he already bonded with, but because they were teaching him Russian and exposing him to music, karate and other enriching activities.

But the day care wasn’t part of the city-funded network, called Early Learning for All, or ELFA.

“I cried when we left. It was such a wonderful program,” she said. “His program now is great, too, but I miss the other one.”

Bumblebee’s owner, Lyuba Schkolnik, decided to join ELFA to help Eichenbaum. But she soon discovered the process could take more than a year, requiring her to complete several early childhood education classes and undergo evaluations to determine if her program meets the city’s quality standards.

Schkolnik, who left a marketing career to open her day care, didn’t mind taking the classes and hopes to get in. Joining the network comes with perks: Last year, in-home day care owners like her got $16,000 stipends to help them earn a living wage, and $12,000 to boost their assistants’ pay.

“But the fact it takes so long for someone to become a provider within the system is a little bit disheartening because the [expanded subsidies] are supposed to launch shortly, and we want to help families,” she said.

Other parents expressed frustration over a policy that prohibits placing a deposit to hold space at their preferred day care, which is a standard practice in private-pay programs, where families often compete for scarce infant-care slots. Ryle said this assures fair access for everyone.

Eichenbaum said that while she understood the system’s equitable goals, she worries the high standards to join ELFA are making it too hard for providers like Schkolnik to participate in the system and for parents like her to get the child care that works for them.

“Their goals are so lofty that they don’t look at the real-world impact,” she said. “They are letting the perfect be the enemy of the good.”

Inside City Hall, two members of the Board of Supervisors want the early childhood department to speed things up for providers who want to join ELFA. They worry that when the subsidies expand, the waitlist for child care will grow.

“Do I want to go faster than they probably feel comfortable with? Of course I do,” Supervisor Stephen Sherrill said. “I think we can expand the system without sacrificing quality.”

Supervisor Myrna Melgar said she’d like to see a simpler and more accessible system.

“There are multiple things that go into the decision to pick a provider. It’s how you feel. Sometimes it’s cultural and language competence, sometimes it is proximity to your home or work. And so on top of it, to layer a bunch of other things for eligibility, it makes it difficult and complicated,” she said.

Ingrid Mezquita, director of the Department of Early Childhood, said the city is carefully building out the system, adding more ELFA sites and infant and toddler care slots in neighborhoods that need them most. Depending on their qualifications, she said, some providers can “easily whisk through in less than three months and some programs may take a little longer.”

“We need to have those kinds of quality assurances because, at the end of the day, our accountability and our responsibility is to that child and to that family and the programs that do come on board and do enroll in this public funding support also prescribe to that and have that shared accountability with us,” she said.

Over the past three years, the city used unspent funds that accrued when it was fighting a taxpayer group’s lawsuit over Baby Prop C to clear the waitlist for lower-income families who needed child care, boost wages for more than 3,000 early educators, who have historically been underpaid, and support their professional development. Those funds are expected to run out in six years.

As a result, the city-funded child care programs are serving more than 9,000 kids, have a lower staff turnover rate than the state average, and children’s kindergarten readiness has gone up, Mezquita said.

About 700 children are currently on the wait list for care, though there are about 1,000 available spaces. One reason for the discrepancy is that there aren’t enough infant- and toddler-care slots to meet demand, or the open slots don’t match families’ preferred schedule, location or language, she said.

“We have expanded access, but the only thing that is a little bit of an art and a science — mostly art — to pinpoint is the preferences of families,” she said at a recent Board of Supervisors hearing.

The Department of Early Childhood estimates that ongoing revenue from the commercial rent tax can pay for the expanded subsidies. But the department cautions that it may not cover the program’s full cost down the road if the commercial real estate market softens.

Mezquita said she’s hopeful San Francisco’s experiment will demonstrate that it can be scaled up and funded with state dollars. The city was first to offer free preschool for 4-year-olds in 2005, and this year, California expanded transitional kindergarten for all children who turn 4 by Sept. 1.

“We are building a universal system. How we’re designing it is also taking into account that eventually, yes, we also need the partnership with the state to be able to not only expand it, but also make it widely available,” she said.