California childcare centers close after banks refused to lend money during budget impasse

CrystalStairs.org homepage; Crystal Stairs matches parents with childcare services.
CrystalStairs.org homepage; Crystal Stairs matches parents with childcare services. CrystalStairs.org

California’s legislative leaders say they’ve agreed on a blueprint for a budget deal and plan to spend this weekend penciling in the details. The state’s longest budget impasse could end as soon as Monday. But that’ll be too late for some childcare providers. This year's budget impasse blindsided California’s childcare system in unprecedented ways.

Whenever California lawmakers fail to pass the budget on time, childcare providers that administer state-funded programs must float the payroll and other costs by themselves.

The nonprofits used to be able to borrow lines of credit. But this year banks turned a lot of them down.

"Their concern was really California and whether fronting a state contractor was really a safe business move for them," said Holly Mitchell, who runs Crystal Stairs. The Los Angeles nonprofit matches parents with childcare services.

Mitchell says a lot of smaller childcare centers she works with have had to close. Even the Center for Community and Family Services, one of the larger providers in Los Angeles County, closed nine of its centers this year.

Mitchell says she fields dozens of phone calls every day, "From parents who call me out of sheer desperation when they've gone to pick up their children and their childcare provider tells them don't bring them back tomorrow, or don't bring them back Monday."

Mitchell doubts these childcare centers will be able to reopen after lawmakers pass a budget. By then parents will have moved children to other facilities and staff will have begun to look for new jobs.

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