ST. PAUL — Over $6 million in childcare grants will be made available for communities across the state.

Earlier this week, Gov. Tim Walz and Lt. Gov. Peggy Flanagan announced $6.2 million in Child Care Economic Development Grants would be available this year. This is Minnesota’s largest-ever round of childcare development grants.

“Affordable, accessible child care allows Minnesotans to work and allows our economy to thrive,” said Gov. Walz in a press release. “With the largest-ever round of child care grants, we’re ramping up our efforts to increase child care slots and invest in our child care providers and middle-class families across the state.”

“As a mom and lifelong child advocate, I know child care isn’t a nice to have – it’s a need to have. Affordable, accessible child care should be available to every family who needs it, and we’re working to make that a reality in Minnesota,” said Lt. Gov. Flanagan. “We took action to expand affordable, quality child care to make sure our child care providers and working families have the support they need to thrive.”

Since 2017, the Department of Employment and Economic Development (DEED) has issued more than $6.5 million in Child Care Economic Development grants to 56 local governments and non-profit organizations across the state, helping create up to 9,300 child care slots.

DEED is also launching a new office to coordinate the efforts of state government, communities, businesses, and non-profit organizations that are working to provide child care in Minnesota.

The childcare shortage is viewed as a threat to economic growth in the state. Parents who are unable to find adequate child care might be forced to leave the workforce.

New Ulm and surrounding communities have been dealing with a workforce crisis caused by day care shortages for several years. New Ulm’s Economic Development Authority (EDA) used nearly $1 million in funding to create Westridge Place, a pod model day care, in which four in-home providers can work out of the same building.

New Ulm EDA Coordinator Heather Bregel said this extra child care grant money could have benefited the Westridge project if it had been available last year.

“We did apply for a DEED grant last time, but we did not get it,” Bregel said. At the time there was only around $1.5 million grant funding available statewide for child care and there were many applicants. Bregel said the high volume of applicants last year could have inspired the state to increase child care grant funding in 2024.

The extra funding was approved during the 2023 legislative session. A total of $6.2 million will be available for grants in the initial round of funding. A second round of grant funds will be available for 2025. This second round of funding will also be worth $6.2 million for a total of $12.4 million over two years.

Those applying for the grants may request up to $600,000 for multi-location projects. Single-location projects may request up to $300,000. Recipients must obtain a 50% non-state match to grant funds in either cash or in-kind contributions.

At least 50% of the funds must go to communities outside the metropolitan area.

The grant program is already accepting requests for proposals. The deadline to submit this round of proposals is March 12.

A special virtual meeting for Minnesota communities or organizations interested in submitting a proposal for the child care grants will be held at 11 a.m., Feb. 8.

Bregel said she will attend the Feb. 8 virtual meeting to determine what types of projects New Ulm could fund through these new grants.

“I am interested in investor start-up grants,” Bregel said.

Currently, New Ulm EDA offers a Small Business Grant that gives up to $10,000 to businesses in their first year of operation. In-home day cares are eligible for this funding as an incentive to start child care projects. Bregel said two day cares have received this small business grant; however since the grant is first come first serve, the small business grant fund is taken quickly.

Bregel said with the child care grants, the EDA could fund more new in-home providers. Child care grants could be used for hosting day care training classes. Bregel said there has even been talk of doing a second pod model day care. With extra funding available from the state, it could be possible.

Bregel said they will know more about their option following the Feb. 8 webinar.