Childcare providers contracted by the city for universal childcare programs, including a new free 2-K initiative, are facing significant payment delays, jeopardizing their ability to open for the upcoming school year. Operators report not receiving advance payments usually disbursed in August, forcing them to cover essential expenses like supplies and staffing with personal funds.
Adrienne Bond, director of the Quick Start Daycare Center in Queens, stated she is awaiting approximately $400,000 from the city. "If we do open up on the first day of school, I won’t have staff," Bond said, detailing how she has used personal funds and a private after-school program's line of credit to cover costs. She also reported delaying staff paychecks and awaiting a city Department of Education bridge loan, which has been held up by administrative backlogs.
Mayer Zohran Mamdani had made free universal childcare a central promise during his mayoral campaign, with a plan to expand a 2-year-old pilot program, "2-Care," citywide over four years, alongside enhancing existing 3-K and pre-K programs. These initiatives were announced with $1.2 billion in state funding.
The current funding holdup affects providers who rely on these advance payments to prepare for the fall opening. "We received zero funding that we usually receive in August to get us through to open," said Lori Congolese, director of The Play Group Experience in Staten Island, who is waiting on a $160,000 advance and has used her personal account for expenses.
Similar frustrations were echoed by other providers. One anonymous owner in Queens stated that money for a new 2-K class would not arrive until November, and that she had only received a fraction of a requested loan. "I have gone into my personal bank accounts, went into my 401(k), and I’m not doing it again," the owner said.
Olena Olson, director of Let’s Play & Learn Park in Park Slope, is relying on a line of credit and private tuition payments to cover staff and building costs, as she awaits a $300,000 advance for 3-K and pre-K programs. While she anticipates being able to open in September, she expressed concern about finances by October if payments do not arrive.
The process for obtaining interest-free bridge loans from the Department of Education has also presented challenges. Providers describe a "Catch-22" situation where the loan amount is deducted from the eventual advance payment.
An administrative dispute appears to be contributing to the delays, with Department of Education officials reportedly blaming the city comptroller's office for not registering contracts, a necessary step for payment processing. Comptroller's officials, however, stated that the DOE had not yet submitted the 2-K contracts. City Comptroller Mark Levine acknowledged the situation, stating, "The city knew these contracts needed to be approved by now, and failing to get them done on time risks setting back our affordability agenda."
A Department of Education insider criticized City Hall for the situation, emphasizing that universal childcare cannot be built solely on promises. Mayor Mamdani's spokeswoman, Jenna Lyle, acknowledged the delays as "unacceptable" but attributed them partly to staffing cuts made by the previous administration. City Hall officials have stated that overtime has been authorized to expedite loan payments and that additional staff are being assigned to finalize contracts and process payments within five business days.