Small business help and child-care worker raises in McKee’s COVID plan

Child care workers would get a $2,000 bonus, restaurants would expand and developers would break ground on new “affordable” apartment buildings under Gov. Dan McKee’s plan to tap Rhode Island’s $1.1-billion American Rescue Plan windfall.

McKee, who for months has been saying the money should not sit untouched in the bank any longer, on Thursday fleshed out his plan to spend $113 million in what he calls a “down payment” to get struggling industries through the current phase of the COVID-19 pandemic. 

“The pandemic has provided some really big opportunities for the state of Rhode Island to reset some of the issues that have to do with our business environment, our child care and our housing, and that is just the beginning of the down payment,” McKee told reporters in a news conference outside the State House.

The midyear budget proposal now heads to state lawmakers, who have been noncommittal on spending a chunk of the federal cash before deciding on a strategic plan for all of it. 

In a joint statement, Senate President Dominick Ruggerio and House Speaker K. Joseph Shekarchi said the proposal would now undergo a “vigorous public review.” 

More: Opinion/McKee: Invest federal funds in small business, child care, affordable housing

More: Opinion/Nicolato: ARPA no windfall but a payment on bills long overdue

More: McKee says RI businesses need more help to adapt to COVID

Aid to small businesses

As he promised in a Journal editorial last month, McKee’s proposal makes its largest investment in small businesses, which would see $45 million in a variety of grants and technical assistance programs.

Of that total, $12.5 million would provide general help for any business hurt by the pandemic (with 20% of those funds set aside for minority-owned companies); $8 million would be set aside for grants to the tourism industry; $7.5 million for a new round of “Take It Outside” payments to help businesses operate outdoors. McKee’s proposal would split $2 million between regional tourism bureaus and the Rhode Island Airport Corporation to market the state to visitors.

State Commerce Secretary Stefan Pryor has previously said most of the grants and technical assistance will be routed to businesses through intermediaries, such as trade groups or chambers of commerce.

And his proposal includes an additional $3 million to intermediaries, such as municipalities, chambers of commerce and business improvement districts for public art installations, streetscape improvements and outdoor performance venues.  

“As we emerge from the COVID crisis, many of our small businesses are still struggling — or are concerned that the colder months will bring renewed hardship,” Pryor said. 

Raises for child-care workers

As he said he would, McKee has earmarked a big chunk of the money for pay raises –he describes as retention bonuses – for employees of state-licensed child-care providers and also, privately-run agencies, that work with at-risk children.

That includes $12.7 million to cover semiannual bonuses of $1,000,  for an estimated 8,200 full- and part-time child care providers, including the army of home-based providers affiliated with the Service Employees International Union.

McKee’s move follows legislative efforts earlier this year to aid the child-care industry by providing a total of $74.2 million, up from $67 million last year.

That includes extra money to increase reimbursement rates for subsidized child-care an average 26% for school-age children, and between 16% and 23% for infants, toddlers, and preschool-age children beginning Jan. 1, 2022. 

McKee’s proposed pay boost comes in response to pleas from the child-care industry for even more help keeping workers.

“Every day, we hear from the child-care providers in our community how difficult it has been to attract and retain staff for these essential jobs,” McKee said Wednesday at a media event. “Not only are child-care providers struggling to attract new staff, they are losing current staff who are leaving for jobs that can offer higher wages.” 

“They stopped taking applications from families that need help because they don’t have the staff … for multiple reasons including pay scale,” he added Thursday.

Elaborating, child-care industry spokesman Christopher Hunter said: “Some providers are accepting new [children] but many others have waiting lists, particularly for children under age 3.”

Asked what happened to an earlier $18.6-million infusion of federal dollars, a Department of Human Services spokeswoman said: “Ninety-five percent of child-care centers who received a grant dedicated at least 20 percent of their first grant to staff bonuses.”

The money also helped re-open 52 of the 100-plus centers “closed because of the pandemic,” according to the state’s Human Services Director Celia Blue.

A budget memo says the plan “also directly addresses critical needs resulting from labor shortages in the child-care industry. The child care industry provides an essential service to Rhode Island families, and the uninterrupted operation of child care providers is critical in getting Rhode Islanders in all industries back to work.

“When considering the benefit to the child care provider workforce, it should be noted that nearly all early childhood educators are women and women of color.”

In his McKee’s package would als
o set aside $300,000 to help pay the costs to open new Family Child Care sites, including $2,000 startup grants.

The child-care workers are not the only ones who would get raises.

McKee also proposed $694.50-per-month raises for those earning less than $75,000 a year who work for the “direct-care providers” under contract with the Department of Children, Youth, and Families. 

That could include caseworkers, program management, medical and nursing personnel and education staff, if any, according to the budget office.

There are currently 37 DCYF-contracted service provider organizations employing up to 1,500 direct care workers whose wages would make them eligible, according to the memo signed by new state Budget Officer Joseph Codega.

Affordable housing construction

On housing, McKee proposed $15 million to supplement the $65-million bond voters approved this spring for affordable housing construction through Rhode Island Housing.

Earlier this year, affordable housing developers asked for $54 million from the pot of bond money. The program typically includes three funding rounds and the fact that the first round of requests would nearly exhaust the fund shows the need for more money, Pryor said. 

McKee also wants to spend $12 million of the federal money to acquire land for future construction of shelters or housing for people without homes. 

And the budget amendment includes $1.5 million for the Office of Housing and Community Development to provide services to address “the rise in pandemic-related homelessness.”

McKee also proposes spending $400,000 mapping and studying the state’s broadband internet infrastructure in anticipation of more federal funding to expand the system. The governor would also hire a broadband coordinator within the state Commerce Corporation.

“The nature of broadband infrastructure is inherently complex, and Rhode Island is already at a disadvantage relative to peers in that the state lacks a current broadband strategic plan,” Codega wrote in the memo to lawmakers. 

In their statement Ruggerio and Shekarchi said the vetting of McKee’s idea “will include consideration of the merits of the expenditures, the urgency of the need, and anticipated recommendations from other groups who have been studying the best use of these funds.”