Unlike some of her peers, Jessica Herod has not had staff detained by federal immigration agents, hecklers defecate in front of her door, or armed state investigators entering her daycare. 

Still, Herod is worried. She is co-founder and chief operating officer of Olu’s Beginnings, a child care center in North Minneapolis where 75% of the children enrolled depend on federal funding. 

Earlier this month, the Trump administration announced that it suspended $467 million in annual payments to Minnesota that enable low-income parents to access child care. The unprecedented federal funding freeze, which is now tied up in court, “would affect me significantly,” Herod said. “I would have to do layoffs and merge classrooms.”

Ever since Nick Shirley uploaded a YouTube video, produced with assistance from Minnesota House Republicans, claiming that Somali immigrants in Minneapolis take taxpayer money to run phony daycares, the state’s child care industry — one not exactly known before for fanning the flames of political conflict — has been in survival mode.

“Over the last few weeks, we have been so demonized,” said Dawn Uribe, who runs four Spanish immersion preschools under the name Mis Amigos. “It’s been heartbreaking.”

Here is a breakdown of the immediate and long-term obstacles for Minnesota’s child care centers and the families that use them. 

What is it like now to run a child care facility in Minnesota?

It was a week ago, Uribe said, that Immigration and Customs Enforcement grabbed a Mis Amigos’ facilities and maintenance specialist from a suburban Home Depot and tossed him into a van.

According to Uribe, the employee, whom she declined to name for publication, was flown to Texas and awaits a bond hearing. Uribe said that the employee has legal working papers. A message left with Immigrations and Customs Enforcement about the arrest was not returned. 

Other day care centers reported that employees are scared to show up for work and parents do not want to drop off their children because of ICE agents.

“People are terrified,” said Clare Sanford, chair of government relations for the Minnesota Child Care Association.

ICE, of course, has hit many areas of Minnesota’s economy. But day care centers face added challenges. 

Shirley, a right-wing content creator and self-described citizen journalist, purported to show nine different day care centers that collected public money without providing child care. 

But the Department of Children Youth and Families, the state agency that administers taxpayer money toward child care programs, responded that the daycare centers Shirley profiled are, in fact, caring for children. 

Nonetheless, child care operators have faced bomb threats and copycat videographers in front of their facilities. 

One operator claimed that a car circled their clinic, a man jumped out of the vehicle, defecated on the sidewalk in front of the entrance, and drove away. 

(Most child care operators declined to use their name for this story, because they fear reprisal. One said that her sibling — a federal government employee — warned her, “We’re in a really scary place right now so just bite your tongue.”)

On Jan. 2, the Department of Children Youth and Families (DCYF) emailed child care providers, “We are aware that some licensed child care centers have received harassing or threatening communications following recent media coverage” and counseled providers to reach out to local law enforcement.

(The defecation victim did reach out to the St. Paul Police Department, which is investigating the incident.)

But despite exonerating the care centers in the Shirley video, on Jan. 6 DCYF initiated site visits to investigate facilities across the state. DCYF took the extraordinary step of partnering with the Minnesota Bureau of Criminal Apprehension on the probes. 

Some child care clinics have chafed at the use of Bureau of Criminal Apprehension site investigators, which they say has led to the spectacle of state agents brandishing firearms in a daycare as they comb through invoices and children’s attendance records. 

Mike Ernster, a spokesperson for the Bureau of Criminal Apprehension, said “that agents are armed as per BCA policy as a regular part of their duty as licensed police officers in Minnesota. However, our agents were there to interact with the business owners and staff supporting DCYF administrative inspections, not to interact with the children.”

What about the federal payment freeze?

Let’s first explain how this funding normally works. 

Minnesota gets a total of $467 million in yearly federal assistance toward child care, according to figures provided by DCYF.

The child care programs stemmed from President Bill Clinton and Congressional Republicans wanting to “end welfare as we know it” in the 1990s. The programs are meant to reward parents who demonstrate that they work or are in job training.

“Many of the families are experiencing significant hardships and challenges like fleeing domestic violence or facing eviction,” said Diana Azevedo-McCaffrey, senior policy analyst at the Center for Budget and Policy Priorities, a liberal leaning think tank in Washington D.C. 

In Minnesota, DCYF and the state’s 87 counties run two child care assistance programs — family investment and sliding fee.

Families earning less than 67% of the state’s median income qualify for family investment, which is coupled with working with a job counselor on an employment plan. As of 2025, over 9,000 children and 4,800 families are enrolled in Minnesota family investment.

Families who make less than 47% of state median income can get a sliding fee, which may involve a co-payment. In 2025, a bit over 14,000 children and 7,000 families get assistance through sliding fee – with around 2,300 families on the waiting list. 

“We have a child care shortage,” Sanford said. “Infant and toddler spots are always hardest to find.”

Fifty-one percent of Minnesota families accessing these programs identify as Black, according to state figures, with 25% White and 6% Hispanic. 

Child care providers get more money from a parent paying out of pocket than from a parent enrolled in child care assistance. Still, over 4,000 child care providers across Minnesota are licensed to accept at least one family on assistance. 

For some, like Olu’s Beginnings in north Minneapolis, families on assistance reflect the day care’s surrounding community. Other providers, such as Mis Amigos, see setting aside a few slots for low-income parents part of their mission.

“We have always chosen to serve families who receive public support because we believe high-quality education should be accessible to all,” Uribe said. 

How is this threatened funding freezing affecting Minnesota child care right now?

Except for anticipation of what comes next, it is not. 

Minnesota, California, Colorado, Illinois and New York sued Jan. 8, right after the Trump administration announced it was shutting off child care funds. The states argue that the executive branch cannot cancel payments already appropriated by Congress. 

The New York federal judge on the case, Arun Subramanian, granted a stay until this Friday, which means states can draw down from the federal funds it has until then. Subramanian will hear arguments from both sides on Friday, at which point the judge may make a more lasting ruling or issue another temporary stay.

In the “vast majority” of Trump administration funding freeze cases, courts have ruled against the administration, said Peter Larsen, an assistant professor at Mitchell Hamline School of Law.

However, Larsen added, the Trump administration could defy the court order as it has in cases involving National Institutes of Health grants and Consumer Finance Protection Bureau funding, among other subjects. 

If the court ruled for the Trump administration, Minnesota would surely appeal the decision, Larsen said, but the state would probably be out of federal child care funds in the interim. 

DCYF informed providers Jan. 9 that it can finance child care assistance for “several months” without additional federal funding. But DCYF has not answered weeks worth of questions from providers (and reporters) about when it last drew down from federal funds and how much reserves it has on hand. 

“We are just getting told to sit tight,” Herod said. 

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