Nanny State: New York Daycare Service Perseveres Despite State Level Regulations and Taxation

By Nick Ivory, Director of Regional Affairs

Shortly after our Regional Regulatory Reform Roundtable in Upstate New York, Advocacy stopped by Honey Bee Child Care, a daycare center in Wappingers Falls, NY. We spoke with the owner Kathy D’Aprile and director Mary Rokitowski to talk about regulations and public policy affecting their business. Prior to launching her daycare business, Kathy was a nurse for 20 years. Once she and her husband became parents, she decided that she wanted to leave nursing to stay home and care for their child.

Eventually, Kathy decided to take advantage of the situation entrepreneurially and started providing group family daycare services out of her home, which grew over time. Ultimately, she teamed up with her best friend Mary, who has a teaching background, and they grew it into a daycare service with six locations that currently serve roughly 200 families.

They described a regulatory environment in New York State that presents challenges for small child care companies that are trying to grow their business, noting that there are 60 pages of regulations that must be complied with. One particular example from those 60 pages of mandates is that there must be one adult working on-site for every four infants being cared for. Although they agree that this requirement makes sense, it does have a significant effect on their labor cost, making it virtually unprofitable for them to have an infant-care room. Nonetheless, they provide services for infants anyway so that they can earn the parents business through child’s later years.

They cited food safety rules required that can safely be summed up as overreaching. Child care providers are required to adhere to certain nutritional guidelines on what type of food they can serve to the children, even food that is provided by the parents when they drop their child off. This has the potential to put the staff into an awkward situation where they are having to dictate what their clients can or cannot feed their own children.

Kathy and Mary pointed out the obvious: that growing a small business in a high-taxation state is extremely difficult, especially a business specializing in child daycare services, typically a high-turnover industry. If they offer wages that are too much higher than minimum wage, they risk having to increase tuition for their clients. Kathy stressed that the more taxes go up, the more difficult this balancing act becomes.

The state’s small business community would likely experience a huge second wind from substantial tax reform since New York is currently one of the lowest ranked states in the state business tax climate index at number 48, beating out only California and New Jersey, according to the Tax Foundation.

Although the empire state isn’t a particularly inviting environment for entrepreneurs trying to grow their business, the success of Kathy and Mary prove that if one has enough passion for the services they provide, then they can overcome any obstacles. Kathy described how she has watched some of her former students grow up and eventually enroll their own children with Honey Bee Child Care. From speaking with her, it’s clear that she sees her business as a lifeline in the community to working parents, some being single parents, who need people they can trust to help with the education and development of their children in the earliest years of their lives.

Advocacy was in New Jersey, Pennsylvania, and New York for Regional Regulatory Reform Roundtables September 11-13.

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Nick Ivory is the Director of Regional Affairs. Ivory can be reached at nicholas.ivory@sba.gov.