Minnesota child-care providers will soon be receiving financial assistance under a $300 million program established by the Legislature.

Using federal money provided by the COVID-19 stimulus package, the program announced Wednesday is designed to improve pay and benefits for child-care workers, as well as pay for expenses such as personal protective equipment and overhead costs.

Like other industries, child-care centers are struggling to recruit and retain workers.

Early in the pandemic the state provided assistance to child-care facilities that agreed to care for the children of first responders and essential workers. That was followed by a limited monthly stipend program.

The new effort is targeted at improving pay.

"It is a nod to the fact that, first of all, we are an incredibly low-paid field," said Ann McCully, executive director of Child Care Aware of Minnesota, a nonprofit that provides assistance to child-care providers. "Like every other industry, keeping staff in this current climate is almost impossible."

McCully said the financial support has kept most centers open, but some of the larger facilities are cutting hours, and that could create access problems for some parents who are returning to work.

"Throughout the COVID-19 pandemic, child-care providers have stepped up to ensure that Minnesota families have a safe and reliable place to send their children, despite challenges like low enrollment and higher operational costs," Gov. Tim Walz said in a written statement. "These grants will be critical in supporting our child-care providers and ensuring that child care continues to be available to communities across the state."

The program will run through June 2023. Eligible providers will receive an e-mail each month from the state that includes a link to begin the application process.

Child-care centers and family child-care providers will receive $430 for every full-time equivalent employee.

Programs are required to use at least 70% of the funds to increase salary or benefits for staff who regularly care for children.

Child-care programs that serve low-income facilities may be eligible for more funding.

In November, the state will raise the rates it pays for the Child Care Assistance Program, which each month subsidizes the care for 30,000 children of low-income families.

"Minnesota's economy depends on the availability of child care," Human Services Commissioner Jodi Harpstead said. "By stabilizing the child-care industry and putting more money in child-care workers' pockets, these grants support a critical sector of our workforce."

Glenn Howatt • 612-673-7192

Twitter: @GlennHowatt