House committee hears bills to extend childcare facility repair grants and DEED childcare economic development funding

The House Workforce, Labor and Economic Development Finance and Policy Committee on March 28 considered House File 2582, a bill to continue and expand state grants intended to increase childcare capacity across Minnesota.

Supporters told the committee that two existing grant programs have helped create childcare slots and kept small providers open, and they urged continued funding. Suzanne Pearl, Minnesota director for First Children’s Finance, said the Minnesota Childcare Facility Revitalization Grant Program has provided small awards to address safety and licensing-related repairs, noting, “Without further funding, the program will end.”

The committee heard that the facility grants, implemented since 2022, capped awards at $20,000 for centers and $15,000 for licensed family childcare. Pearl said the program prioritized projects that affect health, safety or licensing compliance and that the average award was about $9,000. First Children’s Finance accepted 650 applications for the most recent round but funded 104 awards.

Representative Fue Lee, the bill’s author, told members the underlying appropriation would provide $2.5 million in fiscal years 2026–27 to continue the facility revitalization program. Lee said the A1 amendment adopted in committee would add funding for the Minnesota Department of Employment and Economic Development’s (DEED) Childcare Economic Development Grant Program, which provides community-level grants to create slots through capital, planning, and other local investments.

Scott Marquardt, president of the Southwest Initiative Foundation, told the committee that communities in Greater Minnesota face acute shortages and described the foundation’s use of state dollars for local planning, technical assistance and private-sector engagement. Darriel Dannen of the Economic Development Association of Minnesota (EDAM) said DEED’s program was designed to allocate at least 50% of funds to Greater Minnesota; she said historical awards have largely focused on Greater Minnesota need.

Committee members asked about geographic targeting. Pearl said the facility grants were intentionally accessible to smaller, single-site providers and that 58% of funding had gone to Greater Minnesota; she added that two-thirds of family child care awards went to Greater Minnesota. Dannen reiterated that the DEED program requires at least half of funds be spent outside the Twin Cities metro.

The committee adopted the A1 amendment by voice vote and laid HF 2582 over for future consideration.

The testimony provided program details committee members identified as relevant to budget choices the committee faces this session, including how small, targeted grants have sometimes unlocked additional slots—for example, by paying for a fence or flooring that allowed a provider to serve more children.

Next steps: committee chairs indicated budget negotiations are ongoing and that the bill will be revisited as leaders finalize allocations.