Updates on the ECE Delayed Payment Crisis


November 14, 2022

By: Julie Kronick & Rebecca Charles

At the close of Fiscal Year 2022 in June, the Department of Education (DOE) had not fulfilled its contractual obligations to reimburse early childhood education (ECE) providers, leaving centers millions of dollars behind in payments to staff and teachers. Since, CCC both individually and as a member of the Campaign for Children coalition has been advocating around the ECE delayed payment crisis alongside NYC providers, ally organizations, and families, sharing important information and data on the issue. Over the last few months, many providers have been forced to take out loans or dig into personal savings to cover service costs, while some have cut back staff or completely shut down and closed their doors. You can read more about this crisis in a previous CCC insight post here.

On Thursday, November 3, NYC Schools chancellor, David C. Banks, addressed the crisis and announced during a press conference that he would deploy a “rapid response” team to preschools and child care centers to sort out payment issues and expedite reimbursement. In response, CCC joined with our Campaign for Children partners in releasing a statement which applauded the commitment and reiterated the challenges facing providers over this issue, echoing Chancellor Banks’ sentiment that “a stable child care system is essential to the City’s economic recovery”. Click here to read the statement from Campaign for Children.

The statement also calls attention to the guarantee included in the DOE contracts that providers would receive at least 75% of their contract value regardless of enrollment. The statement reads, “this guarantee was and remains crucial to the stability of the system, as DOE fully controls enrollment and providers are prohibited from enrolling families without approval.” Chancellor Banks’ pledge acknowledges this payment floor, but so far a clear timeline for reimbursements has not been laid out. Partners from the Campaign for Children hope to work with DOE to create a timeline for a timely payment plan and ensure delayed payments do not continue afterwards.

Recent testimony on the payment crisis from CCC Policy and Advocacy Associate Rebecca Charles provides possible steps for city leaders to take to stabilize the early childhood workforce and ensure that New York City achieves an equitable recovery. Those recommendations include:

  • Immediately paying all community based child care providers what they are contractually owed from fiscal year 2022
  • Promptly paying fiscal year 2023 contracts to ensure that the lag between invoicing and reimbursement never exceeds 30 days
  • Holding all providers financially harmless from enrollment penalties as long as the DOE controls enrollment
  • Migrating invoicing and payment processes from the DOE to the Mayor’s Office of Contract Services

Back when the Fiscal Year 2023 Budget was adopted, Campaign for Children released a statement expressing priorities for building on some of the budget accomplishments. The statement included hope for future collaboration focused on community-based organization (CBO) ECE providers, which directly relates to this payment crisis. The priorities include:

  • expanding the child care system to increase access to extended day and year-round 3-K and UPK options for working families
  • age down the system to reach greater numbers of infants and toddlers with full day year-round care
  • salary parity for directors, support staff, and teachers

This crisis highlighted issues with DOE controlled enrollment and compensation, and amplified the fact that ECE is a backbone for economic recovery. Over the summer Mayor Adams released A Blueprint for Child Care & Early Childhood Education in New York City, outlining a plan to provide high-quality, equitable, and accessible child care for thousands of New York City families. In his press release, Mayor Adams acknowledged the importance of early education, stating that “during the COVID-19 pandemic, almost 375,000 parents were forced to quit or downshift their jobs because they had no other way to take care of their children”. There was already an issue of ECE access and enrollment across the city and state, highlighted in our previous insight post here, and with centers closed due to this crisis, access is still a major concern even as this is resolved. A New York Times article from November 3 on DOE’s pledge to address the payment crisis states that even still “at least one major provider, Sheltering Arms, which serves roughly 400 children across six preschool sites in the Bronx, Queens and Manhattan, is shutting down next month.”

Mayor Adams also acknowledged the fact that the sector relies heavily on the labor of women of color, so this crisis compounds already stressful economic recovery for New Yorkers impacted more heavily by the pandemic. Early childhood education providers are essential to NYC’s long-term economic recovery and the Mayor’s Blueprint cannot be realized unless systemic issues around payment, enrollment, and compensation are addressed.


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