You Can Have Kids or Disposable Income. Minnesota's Child Care Crisis Is Making Families Choose.
Contributing writer Clint Combs reports on Minnesota's growing child care crisis, where a Federal Reserve Bank survey found 87% of day care centers say the industry is in crisis in 2025, told through the experience of Annel Velasco, who has spent $120,000 on child care for three children, and the advocates and lawmakers calling for universal child care and structural reform.
You can sleep in on the weekends and have disposable income. You can also have children. But right now you cannot have both.
For Annel Velasco, that punchline rings more like a line item. Like most Americans, she is stuck between two impossible choices: working or taking care of her children.
Velasco and her husband spend more on child care for their three children than most parents spend on a mortgage or tuition.
“We’ve spent $120,000 on child care, which is really incredible, and it is the amount that you can still buy a house for in the Twin Cities,” Velasco said outside Seward Child Care Center in Minneapolis.
Velasco wants to pay less for child care. But she also does not want workers in one of the country’s lowest-paid professions to lose out on raises.
“The cost of paying teachers professional wages and ensuring providers have the resources they need to provide high-quality child care for every child is far more than that,” said Velasco. “I don’t want just lower costs for families. I want our teachers to be cared for like they care for our kids, and I want all families to have access to high-quality child care.”
A survey from the Federal Reserve Bank of Minneapolis shows that the child care crisis is growing every year. In 2024, 64 percent of centers said the industry is in crisis. In 2025, 87 percent of day care centers surveyed said the industry is in crisis.
The director of Seward Child Care anticipates that the center will raise costs just to keep the staffing levels needed.
“We figured out the math that if we wanted to keep everything the same as last year, keep our same staffing schedule, keep our same benefits for our teachers, keep our same spending for our materials at school, and going on field trips, we would have had to raise our tuition by 20 percent, which is insane,” Director Johanna Villa said. “No family can absorb that cost.”
Senate Majority Leader Erin Murphy, who described herself as “a mom, and a registered nurse,” said solving the crisis would require the state to invest tax dollars so families can afford care and providers can earn a living wage. Sen. Liz Boldon of Rochester compared the proposal to the logic behind publicly funded K-12 education, saying “child care is not just daycare” but early infrastructure with decades of impact, and pointed to the state’s recent paid family and medical leave law as evidence that big policy shifts are achievable.
The event built on momentum from 2025, when Lt. Gov. Peggy Flanagan, a candidate for Minnesota’s U.S. Senate seat, spoke about her own family’s reliance on the CCAP, which she said helped her mother go back to school and “lift our family into the middle class.” Flanagan described child care as “the backbone of the economy” and touted state investments made under her and Gov. Tim Walz, including expansions to child care assistance, provider compensation, and the state’s child tax credit.
That same year, Angie Claire, child care director at the St. Paul Wilder center, warned that providers across Minnesota are struggling to balance quality programming with sustainable budgets.
“Without child care, Minnesota cannot operate,” said Claire. “Until lawmakers fully fund child care, parents across the state will break under the costs.”
For Velasco, the solution is simple: universal child care.
“We’ve known this for a long time, but we keep putting small patches around the edges of a system that needs structural reform,” said Velasco. “Enough with the patches, let’s actually make a new system.”