HARRISBURG — Public funding for child care, home services for older adults, and disability support will increase under Pennsylvania’s latest budget, but caregivers and business leaders expect longstanding pay and staffing problems to persist without deeper state investments.
The budget, passed last month after a four-month delay, provides $25 million for early childhood education recruitment and retention. The sum is less than the $55 million proposed by Gov. Josh Shapiro, but child care advocates are still celebrating.
“My heart was happy. It was a relief,” said Brie Rice, an educator who oversees hiring and recruitment at JB’s Bright Beginnings, a child care center in Westmoreland County.
Child care workers were disappointed when the previous budget passed without boosted funding, Spotlight PA reported. The new money comes after several years of concentrated lobbying from the industry, which sees its staffing challenges as existential: low wages lead to high turnover, which can cause facility closures and long waits for child care.
Alongside the new money for early childhood workers, this year’s budget also allocates $21 million to direct care. These caregivers provide daily, on-site assistance to older adults and people with disabilities — support that’s critical for keeping them out of nursing homes and hospitals.
The home care industry also struggles with recruitment and retention, issues likely to remain despite the new funding. The $21 million applies only to workers paid through a state waiver — a group representative of just 6% of direct caregivers in Pennsylvania.
That means many vulnerable Pennsylvanians who desperately need these services won’t receive them, said Mia Haney, CEO of the Pennsylvania Homecare Association.
“Our legislature knows what's going on. This administration knows what's going on,” she said. “We have a number of people who are choosing to look the other way, and we simply cannot continue down this road. It’s not safe.”
The home care industry hasn’t lobbied as successfully as child care providers. Although organized labor and business groups agree the workforce needs more state support, their visions of what that should look like differ.
SEIU, which represents direct care workers, wants lawmakers to up the oversight of home care agencies that receive state money, to ensure workers are fairly compensated.
Meanwhile, the Pennsylvania Homecare Association says state data show most of the waiver funding goes to the salaries of direct care workers.
Whether the funding for child and direct care is permanent is unclear.
A spokesperson for state Senate Appropriations Committee Chair Scott Martin (R., Lancaster) told Spotlight PA via email that, “While the state legislature should always keep one eye toward the future, lawmakers still budget one year at a time based on available revenues. Funding levels will continue to be evaluated as part of the budget process, which begins less than two months from now.”
Meanwhile, a spokesperson for State House Majority Leader Matt Bradford (D., Montgomery) said the child care funding is intended to be recurring, and the direct service workers’ rate increase “is the new minimum, pending a rate change.”
Child care
The $25 million for child care comes from the newly created Child Care Staff Recruitment and Retention Program, which will be overseen by the Pennsylvania Department of Human Services. The program provides workers with a one-time $450 bonus next year
That amount might seem meager, but Rice said her colleagues are thrilled.
“Someone was like, ‘That could be a car payment for me, or that could pay off part of a school loan for me. Or that could pay off dental work that I had done, or like that would just lift a little bit of that stress,’” she said.
This line item is “huge,” said Jen DeBell, the executive director of the Pennsylvania Association for the Education of Young Children.
“We haven't had a new line item in early education since Pre-K Counts was created in 2007, so I think it shows the importance that all four caucuses saw in this program,” she said.
DeBell hopes that funding will grow for this program over time, like it has for Pre-K Counts. In 2007, the state allocated $75 million to the program, which provides free pre-kindergarten education during the academic year for income-eligible families with kids three and older. This year, Pre-K Counts received $326.8 million — that includes a $9.5 million bump from the previous fiscal year.
The retention and recruitment money marks the first time the state budget will directly fund the compensation of early childhood educators, noted Diana P. Barber, executive director of the Pennsylvania Child Care Association.
Previous initiatives, including Pre-K Counts and various tax breaks, focused on making child care more affordable for families rather than raising workers’ wages.
Those efforts didn't address the workforce shortage, Barber said: “If there aren't teachers in the classroom, if there isn’t capacity to provide child care, then making it affordable doesn't help.”
JB’s Bright Beginnings cares for about 120 kids, and Rice said there’s enough physical space to triple its enrollment. However, JB’s can’t hire staff to fill those slots because higher wages would require significantly higher tuition. Rice said that would price out the families currently enrolled there.
In Pennsylvania, the annual mean salary for a child care worker is $29,510, according to 2024 data from the Bureau of Labor Statistics. And for a preschool teacher, it’s $35,250. These salaries can’t compete with the entry-level pay found in other sectors, including hospitality and retail.
The industry’s cost issues are starting to hurt other sectors of the economy, according to dozens of chambers of commerce across Pennsylvania. These organizations joined child care advocates to lobby in Harrisburg for the recruitment and retention funding. Robert S. Carl, president of the Schuylkill Chamber of Commerce, spearheaded the initiative.
He called the lack of child care a “workforce development barrier,” noting that there are more jobs than interested workers in his community.
“Potential workers cannot comfortably find gainful employment without viable child care options,” he told Spotlight PA via email.
Pennsylvania’s budget didn’t deliver wins across the board for child care. Despite rising inflation, state funding for Head Start programs remained flat. Head Start serves families earning up to 100% of the federal poverty level, which is less than $27,000 per year for a family of three.
The delayed budget also created a lapse in Head Start funding. That forced some programs to take out loans or temporarily close, explained Kara McFalls, the executive director of Pennsylvania Head Start.
“They didn't have funds so they didn't pay salaries. They had to be thoughtful about the fact that they had to pay their rent,” she said of the programs.
McFalls hopes the federal budget will increase Head Start funding, but anticipates some providers will have to scale back services or cut employee benefits. The latter might result in even more early childhood educators leaving the workforce.
Direct care
The $21 million budgeted for direct care workers will only benefit caregivers paid through the Community HealthChoices waiver. This program allows older adults and Pennsylvanians with physical disabilities to directly hire their caregivers instead of going through an agency.
Lynn Weidner of Allentown is among the roughly 8,500 direct care workers slated to see a wage boost from the new funding. Her partner, Brandon Kingsmore, has cerebral palsy, which limits his mobility, and she’s been his paid caregiver for nearly 13 years. Without direct care, he would likely have to live in a nursing or group home.
Kingsmore has struggled to find backup when Weidner is unavailable, including earlier this year when she was hospitalized.
“I was putting him on the toilet in my hospital room. Like, you know that won't be necessary if we can get another caregiver,” Weidner said.
Some 148,000 Pennsylvanians receive Medicaid-funded in-home support, according to the DHS.
Caregivers paid through the Community HealthChoices waiver comprise roughly 6% of the entire direct care workforce.
The vast majority are employed by agencies that contract with people who need in-home support. Unlike those employed directly by the person they care for, this segment of the direct care workforce won’t get a pay bump from Medicaid, even though they also face chronically low wages.
A February DHS report estimated that an additional $809 million from the state is needed to bring all direct care agency workers up to $14.58 per hour. The starting wage for an agency worker in 2023, the year analyzed in the report, was $13.53.
Workforce shortages result in a loss of services, which means some people might spend all day in bed or go days without bathing, said Haney of the Pennsylvania Homecare Association. She told Spotlight PA that due to inflation, every year that lawmakers fail to raise wages the crisis gets worse.
“It's a snowball effect,” she said.
Kingsmore and Weidner agreed that all direct care workers should be paid more, and that agencies are vital for Pennsylvanians who need this daily support but don’t want to, or are unable to, be their caregiver’s employer.
Before that happens, they argued, state lawmakers must require more fiscal transparency from home health agencies to ensure that Medicaid dollars actually go toward care and not the pockets of executives. They also criticized private equity groups that are becoming a growing presence in the home care industry.
Weidner is a member of the union SEIU Healthcare Pennsylvania. The union’s president, Matt Yarnell, argues that the benefit of the state-run direct model is that every Medicaid dollar can be tracked.
But with agencies, Yarnell said, “We don't know what is going on with money behind the scenes.”
Haney told Spotlight PA that she agrees transparency is essential and noted that the DHS report shows agencies are appropriately handling Medicaid dollars, as 85% of this money that agencies receive goes directly to caregiver compensation. The rest pays for overhead costs, including training, employee background checks, and caregiver supervision.
“The investment in agency care is really an investment in quality,” she said.