EXCERPT FROM: News 8 Austin
By Heidi Zhou
Shortchanging Child Care (Part 2): Starting a child care business in Texas is a gamble in more ways than one. Not only do daycare owners risk failing, they might also have to get their hands dirty in a place like the River City Bingo Hall in Austin.
Open Door Preschools runs the bingo hall. The game room is a far cry from the classrooms where Executive Director Larry Elsner prefers to spend his time.
"Bingo is a big source of income," Elsner said.
The $100,000 a year brought in by the bingo cards makes the nonprofit preschool's annual budget much friendlier.
"Our struggle at Open Door is constantly ‘How do we be affordable for working families? and ‘How do we pay our staff a living wage?’" Elsner said.
Parents flabbergasted by Open Door's monthly $845 tuition rate for infants should put themselves at Elsner's shoes, with a calculator and the budget in hand. The average pay for staff at Open Door is $10 an hour. So for the infant room with two teachers, Elsner pays $4,515 a month just for salaries.
Add on taxes, benefits, rent, utilities and supplies, and the classroom's total expense comes to $7,740. Divide that between eight babies, and each one costs $967.50 a month. Tuition is only $845. Elsner loses $122.50 per baby.
"You're looking at potential, huge budget gaps," he said.
Those gaps get bigger. One out of three kids at Open Door comes from a low-income family subsidized by the Texas Workforce Commission. In Travis County, the government only pays providers half the market rate to care for those children.
Those numbers explain why Open Door depends on the bingo hall, grants and donations to pull through, Elsner said.
The same problem occurs at daycare centers across the state. Rhonda Paver is the founder of Stepping Stone Schools.
"We receive well over 50 calls per week from families looking for inclusion for our subsidized spots," she said.
Stepping Stone reserves only 10 subsidized spots per center, Paver said.
"Because of the discrepancy between the reimbursement rate and the actual cost of care, we are unable to serve a larger number of those children," she said.
Only 30 percent of child care providers in Travis County participate in the subsidy program, and statewide about 14,000 Texas children are on the government's subsidy waitlist. That's enough children to fill 200 school buses.