Mamdani
NEW YORK - New York Mayor Zohran Mamdani has announced a plan to recruit existing childcare centers across the city to help fulfill his vow to provide taxpayer-funded universal child care for all. Whether the city can swing the cost of this effort in New York’s lawsuit-rich environment is another question.
In a news conference earlier this month, Mamdani promised “an era of economic prosperity where young families save more than $20,000 per year per child, where parents stay in the workforce because we finally see childcare as something not to be priced out of, but as something our city provides.”
Delivering on that promise will likely cost even more than the billions Mamdani and New York Gov. Kathy Hochul have earmarked for universal childcare, however, thanks to New York’s personal-injury lawyers whose litigation (which includes allegedly staged accidents and fake injuries) helps drive up insurance costs.
New York already is the nation’s sixth-most expensive state for childcare, with an average cost of $15,394 a year, according to the Economic Policy Institute.
Parents in New York City routinely pay $26,000 to $40,000 a year, with little to no options in some parts of the city. At the same time, providers report costs are rising faster than inflation. The Child Victims Act, passed in 2019, also exposes childcare centers to lawsuits over sexual abuse until plaintiffs are 55, and the New York City Council just opened an 18-month window for other childhood abuse claims by overriding ex-Mayor Eric Adams veto.
Mamdani acknowledged these difficulties in his news conference, saying “many providers are at their breaking points. Rising operational costs, low wages and high staff turnover have taken a toll.”
A primary operational cost for childcare centers is insurance, which is mandatory in New York. A report last year by the Bipartisan Policy Center found 80% of child care providers nationwide faced increasing liability insurance costs and decreasing options for coverage, with 13% of centers reporting premium increases of $10,000 or more.
More than a third said their coverage decreased or insurers set new limits, while some insurers are exiting the market entirely because of the risk.
The problem can only get worse in New York, where courts have a well-deserved reputation for delivering big jury verdicts and plaintiff lawyers have repeatedly been caught engaging in fraudulent practices like faking accidents and paying clients to undergo needless medical procedures to drive up claims.
The CVA signed by then-Gov. Andrew Cuomo in 2019 opened a two-year window in 2019 for institutions to be sued over decades-old sex abuse claims. It drew 11,000 lawsuits, far more than expected.
The New York Archdiocese of the Catholic Church, a major educational institution, last year announced a $300 million fund to settle such claims and the dioceses of Albany, Syracuse and Rochester filed for bankruptcy.
The CVA’s extension of the statute of limitations for new cases until plaintiffs are 55 will drive insurance premiums higher, since it makes it extremely hard for insurers to predict the claims they will have to pay decades into the future.
Injury claims by young children are also more expensive and unpredictable, since they can involve lifetime care expenses that far exceed those of adults. New York has no limits on pain and suffering awards and allows lawsuits over psychological trauma without physical injury.
At the same time as New York is reaching out beyond the public school system to recruit childcare providers, it took high-profile action against one of the largest centers earlier this month. The Mamdani administration canceled its contract with one Bright Horizons center after several employees were indicted for child abuse and said it is reviewing its relationship with others.
In September, the parents of a child who attended Bright Horizons sued over alleged abuse in 2022.
