Five big obstacles to opening child care facilities in rural Illinois

[January 22, 2025]  By Molly Parker

This article was produced for ProPublica’s Local Reporting Network in partnership with Capitol News Illinois.

Sixty percent of rural Americans live in child care deserts — regions with too few licensed slots for children. In rural Illinois, that number rises to nearly 70%.

Over the past decade, Illinois has experienced a 33% decline in licensed child care providers, losing nearly 4,300 facilities and about 38,000 licensed slots for children. This loss, driven by years of budget cuts, has outpaced the shrinking child population and hit rural areas the hardest. In 2019, during his first year in office, Gov. JB Pritzker acknowledged that rural providers were closing at an “alarming rate” and vowed to make Illinois the “best state in the nation for families raising young children.”

While the state has increased payments to providers in recent years, it hasn’t been enough to reverse the damage caused by years of budget cuts. The COVID-19 pandemic further destabilized the already fragile system. Despite additional state and federal funding, Illinois has lost about 1,300 providers since Pritzker took office.

But opening new facilities is hard, and the government itself makes things harder. Here are five reasons it’s difficult to open and operate new child care centers in Illinois:

1. Politics delayed federal relief

Experts say that launching a child care center can cost upwards of $1 million, even in rural areas, where people tend to assume that it’s cheaper to start a small business. It’s true that properties may be less expensive than in urban areas, but they are often harder to find in regions with little new construction and many old buildings requiring costly repairs.

The largest source of child care funding in America comes from the federal Child Care and Development Block Grant funds administered by the U.S. Department of Health and Human Services. But most of it goes to offset child care payments for low-income parents; only a few exceptions allow spending federal funds on the buildings themselves.

Federal efforts to ease these startup costs for rural regions include a proposed expansion of loans and grants through the Department of Agriculture, but this measure remains tied up in Congress as part of the long-delayed new farm bill.

2. State efforts to help didn’t go very far

Rebuild Illinois is a $45 billion, multiyear capital improvement plan that was passed in 2019, the state’s first such plan in nearly a decade. Through it, the state allocated $100 million for early childhood facilities. But in the first round of funding, only eight programs out of 238 applicants received a combined $55 million in January 2023, with most grants awarded in Chicago and suburban areas. No providers in the southern half of the state received funding. A second $45 million round is planned, but no timeline has been announced.

3. Licensing delays and staffing shortages

The Illinois Department of Children and Family Services, which oversees child care licensing, is grappling with a staffing crisis. The agency has a 20% vacancy rate for licensing staff and 45% for supervisors, who must review and approve all applications for child care providers.

The Casners purchased and renovated a 1950s motel in order to open their child care center. (Julia Rendleman for ProPublica)

Navigating Illinois’ complex licensing rules can be hard, and providers say they can’t always get the information they need in a timely manner. Some say their applications have been caught in limbo for months or weeks without explanation. According to DCFS’ own report to the General Assembly, the agency misses its 90-day deadline to approve applications about a third of the time — and in regions with severe staffing shortages, that rate can rise above 50%. Although licensing will soon transfer to the newly created Department of Early Childhood, most changes won’t begin until mid-2026, and what impact they will have on providers is not yet clear.

While DCFS acknowledges the staffing shortages, the agency also attributes delays to provider paperwork errors and holdups from other agencies, like the state fire marshal or local officials.

4. Outdated and contradictory regulations

Illinois’ child care regulations, though intended to protect children, include outdated and contradictory rules that frustrate providers. For instance, one regulation requires blankets in every crib, even though the state prohibits blanket use for sleeping infants to reduce the risk of sudden infant death syndrome, or SIDS. Another rule requires that providers carry coins on walks to use a payphone in emergencies — a relic from a pre-cellphone era.

Providers say that inconsistencies in the rules further complicate an already difficult process for opening and operating child care centers. A DCFS spokesperson told Capitol News Illinois that the agency is working to update some regulations.

5. Low reimbursement rates for providers

The federal Child Care and Development Block Grant is the largest source of child care funding in the U.S. It is administered by states and helps eligible low-income families offset the high cost of child care. The money is paid directly to providers, and the federal government mandates that states reimburse providers at least 50% of market rates and recommends a higher benchmark of 75%. However, Illinois falls short of both targets. As of April 2023, the state reimbursed less than 45% of market rates for child care centers, one of the largest gaps nationwide. This underfunding violated federal equal access provisions, though state officials said that recent subsidy increases have brought Illinois into compliance in most categories.

Rural providers face additional hurdles beyond inadequate reimbursement rates. High startup costs and lower population density make it harder to fill classrooms quickly, prolonging financial strain. Even providers offering unsubsidized care struggle to set fees that reflect the true cost of operations, as many families who barely earn too much to receive a subsidy cannot afford to pay higher rates.

This persistent funding gap leaves providers, particularly those in rural areas, in a difficult financial position.