Economy has mixed impact on Highland Lakes child care industry

Sep 3, 2009

Highland Lakes Business Journal

HIGHLAND LAKES – As employees across the nation cope with reduced work hours or layoffs, the expense of child care is often one of the first adjustments to the family household budget.

And even in the Highland Lakes region, several local child care and early-childhood education facilities have experienced a lull in business over the last few months.

“It has been difficult,” noted Shellie Houck of Tierra Vista Montessori School in Marble Falls, referring to the challenging economic circumstances many families are experiencing.

“Some families are having a more difficult time staying enrolled,” she said.

Houck said that since the economy soured last year, a few of her students have been withdrawn from her school.  Parents of some of her other students, meanwhile have chosen for their children to attend Tierra Vista during school hours but have opted out of after-school care in an effort to pinch pennies.

But Houck is not staying idle – instead, she is thinking outside of the box to bolster business, she said.

“What we have done is restructured to make pricing more affordable,” Houck said, adding that proceeds from an upcoming fall fundraiser will help cover student scholarships.  “We’ve made some reductions.  For example, making lunches more affordable by including them in tuition.  We’re trying to streamline expenses.”

A recent survey conducted by the National Association of Child Care Resource & Referral Agencies shows that Houck’s experience is consistent with a national trend.

The March 2009 survey reported that 27 percent of Child Care Resource Referral agencies experienced declines in the number of child care centers in their communities.  The number of family child care homes declined by 45 percent between the first and last half of 2008 as well.

Rickie Lafon, president of the Texas Licensed Child Care Association, said that in general, providers in Texas are faring reasonably well, compared to their counterparts located elsewhere in the country.  But a slight slowdown is still being experienced.

“It really depends on location, but it’s beginning to start trickling down to us,” Lafon said.  “I’ve talked to several people, and some are doing well and some are struggling.”  Lafon estimated that generally, enrollments in child care centers in Texas have slumped between 10 and 40 percent.

“People nowadays are very concerned about the cost and that may be something that child care owners may have to look at, helping parents make their dollar stretch a little bit,” Lafon added.

As a result, Amy Wheeler at the Learning Station in Marble Falls is among other child care providers in the Highland Lakes making efforts to reduce the financial strain on her customers.

“We have not lost that many kids at all, but we have gone down on our rates to help parents,” she said.

Wheeler said the typical expense of full day care in the Highland Lakes is roughly $495 per month, but at her facility, rates have been reduced to about $370 per month.

“Out rates usually go up every August, but last year when the economy got really bad, we decided to try to help some of our families get back on their feet,” she said.

For many working parents, the expense of child care can be substantial enough that it upstages the cost of other bare necessities.

In 2009, the NACCRRA estimated the average price of full-time care for an infant in a Texas child care center was as high as $7,176 a year.  For a 4-year-old in a center, parents paid up to $6,084 a year for full-time care.

Rates have not changed at Front Porch Learning Center in Kingsland, where Kathy Smith said the enrollment numbers began to slip when the economy was at its worst.  However, she hopes the worst has already come and gone.

“We had one little bitty low spot when the number of kids enrolled decreased when the economy went way down, but now we’re recovering,” Smith said.  “We’ve really bounced back.”

Not everyone has been adversely affected in recent months.

Taylor Walsh of Flip-N-Swim in Marble Falls said her facility has experienced the normal fluctuations in enrollment that accompany changing summer schedules.  But she added that numbers are now steadily rising as the school year gets under way.

“It usually goes up and down, and it has been in normal waves.  But now we’re ready for back to school and getting full,” she said.

Other child care providers that cater to niche markets are reporting remarkably swift business.

“Most of our children are children of working parents, but we have had quite an increase, even in an economy that is the way it is,” said Cindy Koopmans, director of the Child Development Center at First Baptist Christian School in Marble Falls.  “Being a Christian school, a lot of people are choosing that these days.”

Koopman said that enrollment in the church elementary school has doubled since the last school year, and officials have even added additional kindergarten, second and fourth-grade classes due to the demand.

According to the Texas Licensed Child Care Association, more than 8,000 licensed facilities were operating in the state in 2009.  The association states that the early care and education profession is the 11th fastest growing industry in Texas, creating more than 145,000 jobs and $2.3 billion in annual wages.