Pinched parents make times tough for child-care providers

Round one goes to Minnesota parents.

Day-care costs for infants, which represent a sizable expense for Minnesota families, declined 5 percent last year to $12,900, according to a recent report. That's because parents demanded such low prices, some child-care centers shut down, while others imposed pay freezes or pay cuts in order to survive, according to an official with trade group Minnesota Child Care Association.

"Child-care centers are struggling," said Chad Dunkley, the association's president. "Many of them have done what they needed to do."

Indeed, last year, Minnesota lost 317 child-care programs, according to an August report by Arlington-based National Association of Child Care Resources and Referral Agencies.

The reduction in child-care costs comes at a time when many families are struggling to make ends meet in a rough economy. The median income for a two-parent family was $86,687 last year, down slightly from 2009, the report said.

Meanwhile, the cost of child care in Minnesota remains high -- for infant care it's about 15 percent of a two-parent household's income, according to the report.

Minnesota ranked fifth-highest among the states for costs for infants and 4-year-olds at child-care centers. The report says infant child care in Minnesota costs $3,528 more than the average cost of tuition and fees at a public college here.

According to the report, some parents are switching from licensed child-care centers to informal child-care settings, because it is cheaper.

The four states with the highest cost for infants at child-care centers were Massachusetts, New York, Hawaii and Colorado. In 36 states, the cost of child care was higher than the average tuition and fees at public colleges.

"Child care is essential to working families and working families are key to economic growth," said Linda Smith, executive director of the National Association of Child Care Resource and Referral Agencies. "But, child care today is simply unaffordable for most families."

The group's report aims to encourage more government support for child care centers.

Minnesota has higher child-care costs partly because of state rules that require a fewer children per caregiver compared to other states, local officials said. About 65 cents of every dollar that goes to a child-care center, goes toward wages, Dunkley said.

As a result, child-care centers are trying to make adjustments to trim operating costs.

Dunkley, who is also chief operating officer at New Horizon Academy, said the child-care center gave staff a 2 percent average raise in November -- the first after nearly two years of pay freezes.