At first glance, The Growing Years Early Childhood Center in Manchester doesn’t look like it’s financially struggling. The parking lot is full, and the hallways are loud with the sounds of infants and playing toddlers. But the main hall leads to an empty classroom because Kitty Larochelle, the center’s executive director, can’t afford what’s necessary to reopen it.
“That could fit up to 14 toddlers,” Larochelle said. “We would need four teachers for that classroom, and right now that’s just not feasible.”
Despite being at capacity and having a waitlist, The Growing Years and other early childhood education centers in New Hampshire are struggling to stay afloat. Even centers in the state’s more populated areas are finding it difficult to make ends meet.
Centers barely, if at all, break even because they cannot charge “the true cost of care” without raising already-expensive tuition. The most recent data shows that the average annual price for an infant in center-based child care was $17,250, and the average price for an infant and a 4-year-old was $31,868 in 2023, according to the New Hampshire Fiscal Policy Institute.
Meanwhile, low salaries for child care workers have contributed to a workforce shortage and exacerbated capacity issues as a result. According to Larochelle, it is a “balancing act” for her and other center directors to get a handle on the challenges, as everything goes hand in hand.
“We have to be highly, highly aware that most of our income comes from our families, so we can’t overcharge our families and feel good about that,” said Larochelle. “But at the same time, we’re trying to get our staff wages to a reasonable amount so that we maintain our workers.”
Expensive expenses
Nearly everything that goes into running a child care facility carries a high price tag.
“We’re broke all the time,” said Marianne Barter, executive director of Merrimack Valley Day Care Service, a nonprofit in Concord and Boscawen, N.H., that prioritizes care for children at risk of abuse and neglect.
Salaries and benefits are the biggest expense of most centers, Barter said. Additionally, providing healthy food and diapers, paying the mortgage or rent on their five locations, utilities, and building maintenance contribute to tight finances.
“I have horrible buildings,” Barter said, including one that experienced heating and plumbing issues in late October. “Many child care facilities are in buildings that were not intended to be child care facilities. … (It) is a constant nightmare.”
Additionally, businesses must have insurance and keep up with state child care licensing standards, both of which providers say are expensive. Centers struggle to find affordable liability insurance because agencies offer it sparingly, and those who do can charge high premiums due to the risk.
Barter almost had to close her center’s doors when her former insurance agency stopped offering child care insurance, but ended up securing a policy from a different insurer.
“You’d be out of your mind not to have liability insurance,” Barter said. In New Hampshire, child care businesses are only required to have workers’ compensation insurance. “Kids get hurt all the time. You could get sued at any time. These are other people’s children. This is the most important thing in someone’s life and they’re entrusting it with you every single day. The risk involved with that is incredible.”
There is a financial difference between nonprofit and for-profit centers, but both Barter and Larochelle said it is small and comes down to taxes and grant eligibility. Across the industry, employers are managing employees who are struggling to pay rent, fix their cars, and care for their own children.
“I assume it’s on average with everyone else,” Barter said about how running a nonprofit early education center is different. “Even if we’re doing a little bit better, it’s like being the skinniest kid at fat camp. Nothing glorious about it.”
The Growing Years raised tuition for the first time in two years this year to try to combat their financial challenges. Larochelle said it is “extremely difficult” to balance her budget.
“Even though we are a for-profit center, I can tell you it’s like for very little profit, because we are taking care of our staff the best that we can and are still being mindful of the families we serve,” she said.
Workforce shortage ripples
For the past decade, the child care industry has experienced high employee turnover, and businesses are struggling to recruit workers due to low wages. According to the New Hampshire Fiscal Policy Institute, the median yearly salary of child care workers is $32,490, less than that of preschool teachers, kindergarten teachers, and almost all other occupations in the state.
A bachelor’s degree, an associate’s degree, or a certificate in the field is required for early childhood education providers. People with degrees can make more at a pre-school than at an early learning center, which draws them away from the field.
“There’s not a lot of people who want to enter the field making $15 an hour,” said Shannon Tremblay, director of New Hampshire’s legislatively enacted Child Care Advisory Committee.
The inability to pay employees properly is a personal burden for child care directors. When asked about it, Larochelle could not put it into words. Barter said said she wasn’t sure she could describe it.
“The fact that I cannot pay these incredible people what they are worth is just constant frustration,” she said. “As a person who runs this agency, it feels awful when I know one of my staff is struggling. God, I hate that and my board hates it, too.”
As a result, businesses lack a sufficient number of employees to maintain the legally required child-to-adult ratios, resulting in a capacity shortage. There are more children needing care than spots available, even if a business has the classroom space in its building. Without the staff, those classrooms stay closed.
“They may have one or two classrooms that they’re not filling and they can’t fill them because they don’t have staff,” Tremblay said. “They could fill it with their wait list, probably threefold, but they can’t bring in those kiddos because they don’t have the staff.”
The empty classroom at The Growing Years has been that way since the COVID-19 pandemic. Larochelle said that hiring new employees is a “gamble” because if they quit, families could risk having care stripped away.
“We don’t want to open up a classroom and then find out that employees don’t stay more than two months because that puts in jeopardy care for 14 families,” she said. “We want to make sure that we have a solid base and that we can provide care on a daily basis, and even if someone calls out that we have someone who can fill in and we can still meet our ratios.”
To address staffing issues, Larochelle said she tries to “cultivate” her own staff by hiring and mentoring interested people at the center while they earn their degree or certification in early childhood education. She said it’s necessary because “early childhood education is not really promoted as a sustainable income to live off of.”
For veteran providers, Larochelle has tried to increase the incentives. Providers have a half-day off each week, leaving by noon. In the past, the center has held fundraisers for families and employees to help during difficult times. Larochelle said the center’s owner has helped with household expenses, such as new car tires.
“We care for our staff as if they were family. We support each other, we’re always checking in,” she said. “It’s an extremely difficult and challenging job if done right,” said Larochelle. “Those who don’t care don’t stay in the field.”
State investment is low but growing
The state offers the Child Care Scholarship Program, but it helps families, not businesses. The CCSP reduces the cost of child care for eligible families by providing direct payments to qualified providers.
While the program is great for easing a family’s access to early education for their children, Barter said it does not help businesses, since the state is not paying them the actual cost of care, just the average.
“We do not collect a cost share, we just bill the state and this is a gap,” Barter said. “From an affordability standpoint, when the state moves over to a cost-of-care model instead of a market rate model, that’s going to be hugely impactful for child care centers, because it’s going to mean that the rate they pay for scholarship students is going to be based on the actual cost, not just the average of what we all charge, which is never enough.”
The Department of Health and Human Services has made child care a priority for the biennium, but has also left $15 million in funding for child care employers in limbo by trying to fund it with federal dollars.
In the 2026 legislative session, legislation is proposed to give businesses a tax credit for expanding child care, to use state funds for $15 million in child care for employers, and to ease municipal zoning requirements that are making it hard for new businesses to open. However, there is also legislation to repeal the state’s $15 million allocation to child care employers.
“When we don’t show up, there’s an awful lot of people who do not show up for work. That on its own should have more value than it does in this state,” Barter said. “For every person I hire, eight other people get to go to work. I can’t think of any other job that’s like that.”