Georgia Daycares Miss Out on Millions in Lottery Dollars

Illustration by Brittney Phan (State Affairs)

Nov 03, 2021
Key Points
  • Families struggle to pay an average $500 a month in daycare tuition for thousands of Georgia child-care programs that do not receive lottery funds.
  • Daycare workers made 40% less on average in salaries compared to lottery-funded preschool teachers in 2020.
  • Subsidies for low-income families to cover child-care tuition costs rose to around $329 million last year in Georgia.

While the lottery funds universal preschool for Georgia’s four-year-old children, thousands of families pay out-of-pocket to enroll their younger kids in local daycares – often at a steep price.

Nearly $24 billion in proceeds from lottery ticket sales has gone to fund preschools and the HOPE and Zell Miller college scholarships since the Georgia Lottery’s creation in 1992. Last fiscal year saw the most lottery dollars sent to the state treasury so far at more than $1.5 billion, including roughly $382 million to run preschools.

Daycares that serve children from infancy to three-years-old do not receive any lottery funding under state law, forcing local centers to lean on families to pay for tuition or qualify for low-income subsidies. Tuition-funded programs without lottery typically pay their teachers far less than those at lottery-backed preschools, according to state Department of Early Care and Learning (DECAL) data.

President Joe Biden’s administration’s pitch to fully fund preschool and three-years-old daycare programs has raised local teachers and advocates’ hopes for plugging Georgia’s child-care funding gap – particularly since state lawmakers appear unlikely to free up more lottery money for kids younger than four-years-old.

Georgia's child-care workforce dropped by 20% between 2017 and 2020. (Credit: Brittney Phan for State Affairs)

Without lottery funds, Georgia’s more-than 3,000 daycares with capacity to serve nearly 180,000 children depend on tuition that can cost families around $100 to $1,000 a week, depending on what the daycare chooses to charge, DECAL data shows. The average tuition for Georgia families is $168 a week, according to the nonprofit Child Care Aware of America. Those costs make it tough for many families to afford child care, advocates say.

“It’s expensive for families,” said Mindy Binderman, the executive director of the nonprofit Georgia Early Alliance for Ready Students. “And it’s hard to attract and maintain teachers.”

To ease the burden, federal and state governments offer tuition subsidies for low-income families similar to Medicaid’s cost-sharing formula, with the federal government footing roughly most of the bill. Those subsidies grew in Georgia from nearly $176 million in 2018 to about $329 million last year, partly due to an award bump during the COVID-19 pandemic that’s set to run until late 2024. Starting this month, around 60,000 Georgia children will be eligible for the subsidy.

Even with subsidies, local daycares can’t afford to match their teachers’ salaries with what lottery-funded preschools can pay, according to state Department of Labor data. Preschool teachers made an average nearly $35,000 salary in 2020, compared to about $21,000 for daycare workers, state data shows.

“It’s very clear that they’re having a great deal of trouble due to low wages,” said Joe Perreault, a volunteer with the National Association for Family Child Care who lives in Cherokee County. “If that’s your sole source of income, it would be very difficult.”

Georgia has more than $1 billion in lottery reserves that could be used to help fund preschool programs and teacher salaries. (Credit: Brittney Phan for State Affairs)

Changes on how to distribute lottery funds for child-care programs may not come anytime soon from state lawmakers due to high political hurdles, according to top budget writers in the General Assembly. Lottery funding saw the most sweeping changes in 2011, when lawmakers actually decreased how much college students could receive in HOPE Scholarship awards to cope with an expected uptick in recipients, said House Appropriations Chairman Terry England.

“I still have some battle scars from that,” said England, a Republican representing parts of Gwinnett and Barrow counties who has led Georgia’s legislative budget talks over the past decade. “Everybody has their own idea of what to do, and to sit here and speculate what the discussion would be next is fruitless.”

Local advocates point to the importance of child-care education before kids reach preschool as reason to consider covering three-year-old children under the lottery funds. Even so, they also see an uphill battle in the General Assembly when it comes to tweaking lottery-funded programs.

“The biggest bang for our buck is clearly investing in all of our years,” said Pam Tatum, the president and CEO of the Georgia-based advocacy group Quality Care for Children. “But it’s hard to get the political will to do that.”

Children play instruments at the Frazer Center in Atlanta (Credit: Paige McKay Kubik)

Since the COVID-19 pandemic broke out, thousands of Georgia preschools and daycares have leaned on federal relief money to keep from closing amid teacher vacancies and less class enrollment, several local advocates told State Affairs.

More than $90 million in federal funds have gone to shore up preschool and daycare operational costs, according to state records – with another $800 million poised to roll out later this year. Teachers have also benefited from federally funded $1,000 bonus checks, while daycares that don’t receive lottery dollars have seen a boost in subsidies for low-income families to help pay tuition. That federal relief is set to expire near the end of 2023, state records show.

With the time limit on those one-time dollars, and lawmakers hesitant to tamper with lottery funding, local advocates are watching the Biden administration’s proposal for universal funding for four-year-old and three-year old children. Any moves to free up federal funds for three-year-old daycare classes would need to avoid disrupting the lottery-backed arrangement or quality-of-care standards that Georgia already has in place, if more children are included in a national preschool program, advocates say.

“We want to make sure that if we do that, that we would first look at places where kids are most in need,” Binderman said. “We also want to make sure that there are no unintended consequences.”

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