United Way’s Success by 6 warns Austin-area childcare system is in crisis; leaders ask for asset map and cost modeling

AUSTIN — Kathy McHorse, vice president of Success by 6 at United Way for Greater Austin, told the joint subcommittee meeting in the Austin ISD boardroom that the local early-childhood system is underfunded, understaffed and at risk of long-term damage without new investments.

McHorse summarized the coalition’s findings and the community’s early-childhood strategic plan and said “the childcare system has been deemed a market failure,” explaining that high-quality infant care can cost more than $20,000 a year, most programs operate on very thin margins and early-education staff earn average wages of roughly $12 to $13 an hour in the Austin area.

Key data presented to the subcommittee:

- An estimated 28% of children under age 6 in Travis County (about 25,000 children) live in households experiencing low income; roughly 90% of those children are children of color. - Pre-K for 4-year-olds enrolls about 80% of eligible students; by contrast, only about 22% of eligible 3-year-olds are enrolled in pre-K‑3 programs. - Workforce Solutions manages a childcare-subsidy target that covers roughly 3,057 children per day; fewer than 1,000 infants and toddlers are enrolled on an average day in the subsidized program. - At the time of the presentation there were approximately 1,345 children on the subsidy waiting list, including about 930 children under age 3. - Head Start seats in the region total roughly 1,400 combined (AISD receives about 200 Head Start seats; other providers account for the remainder) but programs reported under-enrollment because they cannot hire sufficient staff for some seats.

McHorse framed the shortage of infant/toddler slots and the low subsidy reimbursement rates as a structural business problem for childcare providers: smaller infant classrooms cost more per child and are more expensive to staff, so some providers decline to accept subsidized infants. She said the system’s workforce shortfall has pushed programs to shrink hours or close infant classrooms.

Representatives on the subcommittee stressed cross-agency coordination. Council Member Allison Alter said pre-K‑3 expansion is a clear area where the city, county and AISD could combine resources but noted it must be balanced so that investments in pre-K do not destabilize infant‑toddler care. Alter also offered to circulate the county’s ARPA allocation spreadsheet (the county’s second ARPA tranche was cited in the meeting at $52,000,000) so staff and partners could identify funding opportunities.

McHorse described local strategies that have increased full‑day pre-K access, including AISD’s pre-K partnerships that blend district pre-K funds with childcare provider capacity; she said 18 childcare centers in the region currently provide full-day wraparound pre-K in coordination with AISD. The coalition is also working on cost modeling and fiscal mapping to quantify the annual cost of providing high-quality early care for all young children in the Austin area; McHorse said that figure would be large and is under study.

Several members of the subcommittee raised potential policy and financing options: local stabilization grants, higher subsidy reimbursement rates, workforce-focused incentives such as loan forgiveness or hiring bonuses, site co-location in public facilities and stronger alignment between K–12 institutions and workforce pipelines. Trustee Tracy Zapata described existing youth-employment and internship programs the district runs and urged deeper integration with city and county workforce efforts.

The subcommittee asked staff to add childcare to the asset map and to return with cost and funding options. McHorse and others said local investments — including ARPA funds already allocated by city and county governments — had helped expand capacity but that pandemic-era stabilization tools are ending and longer-term revenue and policy changes will be needed to sustain supply.

The subcommittee agreed to pursue the asset-mapping exercise, requested the county’s ARPA allocation spreadsheet be circulated, and discussed forming a childcare subcommittee to develop specific proposals.