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Child Care Facilities Not Immune to Economic Woes

We've heard how the weakening economy has led to tens of thousands of layoffs in Ohio. Those layoffs have a trickle down effect. One industry directly affected when a parent loses a job is the child care industry. WOSU found central Ohio day care centers are getting creative with adults, trying to ride out the recession.

A little girl, whose hair is so blonde it's almost white, sits on a colorful carpet playing an equally bright xylophone - with each swing of the mallet she creates a sharp, high-pitched sound, and some times the sound is hallow because she misses the instrument altogether. Near her, a little guy, after several attempts, manages to get to his feet. His big smile and wide eyes indicate he's quite pleased with himself.

Neither of these toddlers at Kare-A-Lot Child Care Center on King Avenue in Grandview have any idea some their teachers could be out of work next year. But Mila Newman, the facility's director, said it's more of a possibility than she anticipated.

"We might have to lay off people, yes," Newman said.

Some might consider the child care industry, like the medical field, "recession-proof" because of its necessity for so many parents. But Newman said the poor economy has not sidestepped her center. Several parents have lost their jobs. And the financially strapped parents pay tuition late or carry a balance. Newman said she's trying to work with parents by foregoing the late fees and offering installment payment plans.

"We have allowed parents to pay late and not charge the late fees that we usually charge. Is this happening more often? Yes. That is happening. Now that you're asking, yes, we are seeing parents, not only paying us late, but carrying balances to the next month which we have not seen in the past. But we're trying to be flexible with our parents because we know they're in a difficult situation," she said.

Nevertheless, Newman said she has utilities and salaries to pay. And if more and more parents continue to carry a balance, as much as she would hate to do it, she might have to stop serving some families.

"We haven't gone that far, but probably, you know, that's something we'll have to consider if this becomes a more serious problem," Newman said.

And the credit crunch has hit the center. Newman said a couple of months ago a local bank canceled one of its two lines of credit.

"We use our line of credit when we are short of cash. And when parents don't pay on time or they carry balances we are short on cash."

Right now, the center is nearly at capacity. But Newman worries about the future. She shakes her head when she looks down at the empty appointment calendar on her desk.

"Usually I have my calendar full of parents who are looking for child care and I am giving them a tour. It doesn't mean that they're going to come to Kare-A-Lot, but they're asking, they're inquiring. And that has slowed down, yes, in the last month," she said.

A few miles down the road on Marconi Boulevard near Nationwide Arena is City Kids Daycare. City Kids' director Juliet Blackenberry said enrollment is down. Blackenberry said normally the center operates at 80 percent capacity; Currently only 65 percent of the center's slots are taken.

"We're not getting as many children as we should, but no one is pulling their children out because they can't afford it," Blackenberry said.

City Kids mainly serves parents who work downtown, many of them at Nationwide and American Electric Power. Blackenberry said there are always a couple of parents who will carry a balance or be late. She said the center has tried to help parents by keeping tuition increases low - the most recent was only one percent. And they have waived registration fees.

"That's pretty much it. We try to do what we can, but, you know, we definitely need to make sure we're earning a little bit," she said.

Another child care center reports several parents have lost jobs and a few children have been pulled out of day care. Subsequently there have been more requests for tuition scholarships.

Anita Davis with Child Development Council of Franklin County Head Start said the program, which offers free and subsidized child care, has not had an enrollment increase despite the bad economy. But Davis suspects Head Start will get more inquiries if more and more people lose jobs in the coming months.

"Perhaps in a few months, in the spring or the summer, we might possibly see an increase an increase. But, again, that's totally speculation. I have no idea what the future will hold," Davis said.

Back at Kare-A-Lot in Grandview everything that Mila Newman has said, from the late payments and balances to the fewer appointments, is starting to sink in. She does not think she'll have to close the business, but cuts in other areas are looming. In the next four or five months Newman will negotiate next year's contracts with her employees. Last year she gave them raises.

"At that time, you know, it was not so obvious. The situation was not so difficult and so critical. So, we didn't take that into consideration when we were negotiating our contracts. Do you think there'll be no raises or less raises? That, that will be a consideration. We will start negotiating contracts next April and May and definitely that will be a consideration there. Either no raises or some kind of cut back in hours to try to spread our so we don't have to lay everybody off," Newman said.

Day care operators hope the economy is kind of like that little boy who was struggling to stand up...he eventually walked. Newman hopes the economy gets moving again as well.