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Three reasons why childcare costs may be so high

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Posted at 3:37 PM, Sep 29, 2021
and last updated 2021-09-29 18:37:46-04

RICHMOND, Va. -- When Brittany Reed pays her monthly daycare bill for three-month-old Samuel and two-year-old Jonah, she often wonders where the money goes.

"We do provide a substantial amount to daycare, diapers, wipes," Reed said.

The family's monthly bill for daycare is about $2,200.

Reed estimates that is about half of their family budget and nearly the same as their mortgage.

Brittany Reed and family

"It is kind of mind-boggling and curious to know why it does cost as much as it does," she said.

According to the Economic Policy Institute, Virginia families with an infant and a toddler, like Reed, pay an average of about $25,000 per year for childcare, which is about 43% more than the average rent in Virginia.

But, Danielle Simone, who runs River Road Preschool and co-chairs an association of 40 area preschool directors, said the cost is justified.

"It is not cheap because of all those parts and pieces that go into it," Simone said.

Simone said there are three main reasons why the cost can be so high.

First, operating costs. Many daycares have to pay rent and maintain their buildings.

"In addition, you have all of your taxes, your FICA, all of your state taxes, insurance," Simone said. "I would still have workers' comp, liability, student accident insurance, and then another biggie is your bills system, accounting software and someone who is able to crunch those numbers for you."

Second, labor costs, despite the fact that most daycare workers make between nine and eleven dollars per hour.

"I would say 60 to 70% of our costs are in just our staff, and what we're able to give back to our staff," Simone said. "Early childhood teachers are required to have continuing professional development. That's classes you have to provide for your teachers."

And third, state regulations, including student ratios and building rules.

"Those rooms that you have your little guys in, your youngest ones under 18 months must have an exterior entrance to the building," Simone said. "Also with your younger children, your staff to student ratio has to be much lower."

Simone said the pandemic increased prices even more.

"The extras that we were having to pay for COVID protocols and safety also went up astronomically," Simone said.

Melissa Hipolit is taking an in-depth look at the topic of affordable childcare in Virginia, and she would love to hear from you about your concerns or ideas.

You can reach Melissa on her work Facebook page Melissa Hipolit-WTVR CBS6 or by email at mhipolit@wtvr.com