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The New Jersey Economic Development Authority on Wednesday approved a new $54.5 million grant program to cover the cost of facility improvements at licensed childcare centers and family childcare homes.

Phase 1 of the pilot program is scheduled to launch this summer with $15 million in grants ranging from $50,000 to $200,000 for eligible licensed childcare facilities. Interior and exterior improvements could include, but are not limited to, installing energy efficient windows, creating additional classroom space, purchasing new playground equipment, replacing flooring, remediating environmental hazards such as lead or mold, or putting in child-height sinks or toilets. A complete list of the types of eligible projects can be found here.

“An investment in the childcare sector is an investment in our state’s economic future,” Gov. Phil Murphy said. “Working families need reliable, safe, affordable, accessible, and high-quality childcare. The program announced today will help us ensure that childcare centers statewide can meet these needs while simultaneously securing their long-term financial resiliency.”

NJBIA, which has worked to address the staffing shortages and regulatory burdens caused by the COVID-19 pandemic, said the new grant program would help an industry that operates on razor-thin profit margins make needed facility improvements they could otherwise not afford.

“This program will help strengthen challenged childcare facilities, whose typical struggles to find staff and make ends meet have only been exacerbated by the pandemic,” said NJBIA Director of Government Affairs Alexis Bailey. “With stronger childcare facilities, New Jersey businesses have a better chance to recruit and retain a stable workforce, which ultimately benefits our entire economy.”

Under the new program, applicants may own or lease the space that will be improved, and they must currently enroll or have enrolled in the 12 months prior to the date of application, at least one child receiving support through the New Jersey Department of Human Services (NJDHS) Child Care Assistance Program. That program provides subsidies to offset the cost of childcare for families at 200% or below the federal poverty line. Childcare providers must also commit to enroll in NJDHS’ quality rating improvement system, Grow NJ Kids.

While the NJEDA plans to expand the Child Care Facilities Improvement Pilot Program to home-based childcare providers registered with NJDHS in subsequent program phases, this inaugural phase will only be open to childcare centers licensed by the New Jersey Department of Children and Families (NJDCF). Full eligibility criteria can be found on NJEDA’s website here.

NJEDA CEO Tim Sullivan noted that childcare providers serving low-income children through the NJDHS Child Care Assistance Program were significantly impacted by COVID-19. To ensure that these centers receive the funding they need to survive and thrive, 40% of the Phase 1 funding will be set aside for childcare providers in Opportunity Zone-eligible census tracts.

Governor Murphy signed legislation in June 2021 appropriating $100 million in American Rescue Plan (ARP) Coronavirus State and Local Fiscal Recovery Funds, including $54.5 million for NJEDA to provide facility improvement grants and technical assistance to childcare providers. Funding for Phase 1 of the Child Care Facilities Improvement Pilot Program will be supported through the ARP funding, as well as an additional $4.45 million in state funding.

“The Child Care Facilities Improvement Pilot Program will be a crucial complement to our existing grants for childcare providers as we seek to enhance the places where the youngest New Jerseyans get their starts,” said NJDHS Commissioner Sarah Adelman.