NC to use $11.3M of federal disaster funds for child care worker retention

North Carolina will use $11.3 million in federal disaster aid to supplement child care workers’ pay across 39 Hurricane Helene-affected counties, expanding a retention program as policymakers debate how to keep care available without making it more expensive for parents.

North Carolina Gov. Josh Stein announced the three-year Child Care WAGE$ expansion on Nov. 5. It will establish supplements in Ashe, Madison, and Watauga counties and add annual incentives, initially estimated at 1,350 per participant, in 36 counties already offering WAGE$.

“By putting money directly into the pockets of these dedicated educators, we help retain talent and ensure parents can go to work knowing their children are safe, learning, and thriving,” Stein said.

The initiative directs money to educators, with payments tied to education and continued employment. It does not provide families a tuition discount or require participating providers to lower their prices.

Brian Balfour, senior vice president of research at the John Locke Foundation, which publishes Carolina Journal, argued that additional subsidies leave underlying cost pressures unresolved.

“Child care is unaffordable for far too many in North Carolina. That’s the result of mountains of red tape and regulations on providers that restrict supply combined with hundreds of millions – if not billions – of taxpayer dollars subsidizing demand,” Balfour said.

“The response should be to roll back these interventions, not to layer more interventions on top. Childcare providers would have more money to pay employees if they weren’t confronted with so many regulations and mandates,” Balfour said.

State officials presented the supplements as a way to preserve staffing and the child care capacity parents need to work during recovery.

“This expansion of the WAGE$ program provides critical financial resources to the early educators who anchor our communities, helping child care centers retain the qualified staff necessary to support the health, development, and resilience of our youngest North Carolinians during this challenging recovery process,” NC Health and Human Services Secretary Dev Sangvai said.

The funding comes from a $75 million federal child care disaster recovery award through the American Relief Act, administered by the Administration for Children and Families’ Office of Child Care. The wage initiative accounts for about 15% of that award.

The NC Department of Health and Human Services worked with the Governor’s Recovery Office of Western North Carolina (GROW NC) to identify recovery priorities, including workforce stabilization. Early Years Inc. will administer the supplements.

Established in 1994, WAGE$ provides education-based payments to eligible early childhood teachers, directors, family child care providers, and other classroom staff working with children from birth through age 5.

Participants receive supplements after completing six consecutive months at the same facility. The requirement links the financial benefit to remaining with an employer, rather than simply holding a child care job, according to the statement.

State officials cited 14% turnover among WAGE$ participants in 2026, compared with a statewide rate of 38% in a 2023 workforce study. The figures describe different years and populations; the comparison alone does not establish how much the program reduced turnover.

“Investing in direct salary supplements is one of the best ways to stabilize and retain our early childhood workforce, ensuring the consistent, high-quality care that children need during their most critical years of development,” said Candace Witherspoon, director of the NCDHHS Division of Child Development and Early Education.

In the three newly served counties, eligibility requirements include earning no more than $25 an hour, working at least 10 hours weekly with children from birth through age 5 in a licensed program, and meeting education requirements.

Annual supplements for full-time eligibility range from $600 to $4,000, according to Early Years’ guidance. Payments are divided into six-month installments, with amounts prorated for eligible part-time schedules.

Applications in Ashe, Madison, and Watauga are scheduled to open in November, with checks widely available by spring 2027. Annual incentives in the other 36 counties are expected to begin in January 2027. Future incentive amounts depend on funding and participation.

The expansion follows broader recommendations from the bipartisan NC Task Force on Child Care and Early Education. As Carolina Journal previously reported, those recommendations included coordinating workforce compensation programs and exploring benefits for educators.

The Associated Press reported ahead of the midterms that average full-time child care costs exceeded $13,000 in 2025, citing Child Care Aware of America. Reuters reported in March on another approach: New York’s plan to fund an initial 2,000 free child care places for 2-year-olds in New York City.

NCDHHS said reimbursements for facilities’ disaster losses will continue on a rolling basis.

Operators should complete or update Disaster Impact Reports for Helene and Tropical Storm Debby. Educators seeking wage-program information can email wagespages@earlyyearsnc.org, according to the statement.

This story was first published by The Carolina Journal.