Legislature(2021 - 2022)ADAMS 519
03/08/2022 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB149 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 158 | TELECONFERENCED | |
| + | HB 149 | TELECONFERENCED | |
| += | HB 104 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 8, 2022
9:01 a.m.
9:01:20 AM
CALL TO ORDER
Co-Chair Merrick called the House Finance Committee meeting
to order at 9:01 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter (via teleconference)
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Steve Thompson
Representative Adam Wool
MEMBERS ABSENT
Representative Sara Rasmussen
ALSO PRESENT
Representative Zach Fields, Sponsor; Tristan Walsh, Staff,
Representative Zach Fields.
PRESENT VIA TELECONFERENCE
Candice Richey, Home Child Care Provider, Candi's Tot Stop,
Fairbanks; Christina Eubanks-Ohana, Executive Director,
Hillcrest Children's Center, Anchorage; Blue Shibler,
Southeast Alaska Association for the Education of Young
Children, Juneau; Mike Coons, Self, Palmer; Nicole
Thibodeau, Hearing Examiner and Administrator, Alaska Labor
Relations Agency, Department of Labor and Workforce
Development.
SUMMARY
HB 104 MOTOR FUEL TAX; VEHICLE REG. FEE
HB 104 was SCHEDULED but not HEARD.
HB 149 CHILD CARE PROVIDER COLLECTIVE BARGAINING
HB 149 was HEARD and HELD in committee for
further consideration.
HB 158 PFD CONTRIBUTIONS TO GENERAL FUND
HB 158 was SCHEDULED but not HEARD.
Co-Chair Merrick reviewed the meeting agenda.
HOUSE BILL NO. 149
"An Act relating to allowing certain child day care
providers to organize for the purpose of collective
bargaining."
9:01:52 AM
REPRESENTATIVE ZACH FIELDS, SPONSOR, introduced the bill.
He provided a PowerPoint presentation titled "Raising Wages
and Benefits for Child Care Workers (HB 149)" (copy on
file). He highlighted the challenges facing local
businesses related to workforce and an adequate supply of
childcare for people to get back in the labor market as the
state recovered from the COVID-19 pandemic. He informed
committee members there had been a shortage of childcare
for a long time, which was directly related to low wages in
the sector. He explained that low wages made it impossible
to recruit and retain staff to an adequate level to supply
childcare, which was necessary for people to work. He
remarked that the pandemic had exacerbated the problem and
the childcare system was in crisis.
Representative Fields shared that the House Labor and
Commerce Committee had worked to brainstorm every possible
idea to support the childcare sector and had passed a
couple of related bills. One of the bills was a tax credit
for employers who provide childcare onsite or through a
subsidy. The second bill was HB 149, which took more of a
systematic approach. He remarked it had been interesting to
hear from stakeholders during the Labor and Commerce
Committee process. He had personally learned a significant
amount through the process. The number one thing he had
heard from providers the impetus for HB 149 - was about
their need to be empowered to have more control over their
own destiny to fix the systemic problem of inadequate wages
to recruit and retain workforce.
Representative Fields believed the problem was fairly
obvious. He highlighted that the average [childcare] wage
was around $13.50 per hour and Target and Safeway paid an
average of $20 per hour, meaning there would never be
enough childcare providers. He considered the difference
between childcare and a coffee shop. He explained that if
there was an inadequate supply of coffee at a coffee shop,
it did not necessarily have a systemic impact on the
economy, whereas an inadequate supply of childcare
prevented working age people in every other industry from
being at work, which had a negative systemic impact on the
economy. He viewed childcare as a necessary service that
allowed people to participate in the workforce.
Representative Fields highlighted that early childhood
education was essential in terms of human capital
development and workforce development. He detailed that
early childhood education had the highest return on
investment. He elaborated that providing good early
childhood care produced workers who were more productive
over the long-term. He cited work by the economist James
Heckman and pointed to a graph titled "Economic impact of
investing in early childhood learning" on the bottom right
of slide 3. The graph showed investing in early childhood
learning had a higher return on investment than at any
other stage in life.
9:05:51 AM
Representative Fields addressed lessons from other
states/nations on slide 4. He highlighted that every other
developed country in the world invests a significant amount
of money directly to childcare, ranging from $10,000 to
$30,000 per child per year (with Norway being on the high
end). He underscored that the United States (U.S.) invested
under $1,000 per child per year. He stated that the U.S.
did not make a meaningful investment in subsidizing
childcare for working families, unlike every other western
country.
Representative Fields considered what could be done to
strengthen the sector if the country was not going to make
the political decision to start investing thousands of
dollars per child per year. He reported that 11 other
states had established bargaining structures for home-based
childcare providers to bargain with the state to provide
livable wages and benefits that expand the supply of
childcare providers. He expounded that Illinois was the
first state to develop the structure in 2005 and California
was the most recent. He explained that the structure was
called a sectoral bargaining model where the entire sector,
including workers and owners, bargained as one. He relayed
that HB 149 was based on the model.
Representative Fields explained that HB 149 looked at one
model for expanding the supply of childcare by directly
addressing the issue of inadequate wages. He thought it was
important to note that HB 149 and the sectoral bargaining
model was not the only option. He reviewed four other
options the House Labor and Commerce Committee had
considered on slide 5. First, the state could directly
supply care; however, he did not believe there was the
political will to directly subsidize childcare on an
ongoing basis to the tune of thousands of dollars per child
per year. He reiterated his earlier statement that it was
the method used by every other western country; however, he
did not believe there was the political bandwidth to do so.
Second, the state could use an opt-in sectoral bargaining
structure to negotiate wages/benefits with the state (as
envisioned in HB 149).
Representative Fields highlighted a third option to
establish a living wage covering all workers in the
childcare industry. He noted that many childcare providers
had discussed the option. He stated it was a simple policy.
He believed the biggest drawback to the option was that the
living wage may not be economically viable in the absence
of adequate subsidies. For example, if the legislature
established the wage at $18.00/hour but did not provide
subsidies, the option forced parents to make up the
difference. He pointed out that childcare was already too
expensive for many parents. He emphasized that as the
legislature looked to strengthen the sector, it needed to
be sensitive to not raising prices on parents.
Representative Fields discussed the fourth option to
establish prevailing wage policy covering all providers who
receive public funding. He stated it was similar to what
the state did with construction. He explained that those
receiving construction dollars through the State of Alaska
were subject to the Davis-Bacon prevailing wage law, which
was currently over $60/hour. He explained it could be done
with the childcare industry. He elaborated that decades
back the state had made a choice with construction and had
determined it would be a middle class job where workers
received a living wage and benefits for public
construction. He believed the challenge with mandating
prevailing wages in childcare was that he did not think
there was currently enough public investment in childcare
for a prevailing wage model to work. He explained that the
prevailing wage model worked for the construction industry
because about $1 billion per year was put into federal
public construction and more was put into state
construction. He was not confident the model would work if
the critical mass of investment was not put into the
childcare sector.
9:09:22 AM
Representative Fields addressed an illustration on slide 6
titled "Coercion and Expense Tradeoffs." The illustration
included the four options considered by the Labor and
Commerce Committee. He pointed out that the most coercive
option was to mandate a minimum or living wage for
childcare providers. He stated that a prevailing wage was a
little less coercive. The least coercive option was to pump
money into the sector. He would be supportive of the option
but did not believe the political bandwidth existed. He
relayed that the sectoral bargaining model in HB 149 was
the least coercive and least expensive. He recognized it
would not fix all of the problems in the childcare sector
overnight. He believed it would empower the sector to start
fixing some of the problems by getting at their root
causes.
Representative Fields reviewed the goals of the bill on
slide 7. The goal was to raise wages/benefits, so workers
have a living wage, more workers enter the industry and
fewer leave, thus increasing the supply of quality
childcare available to everyone in the marketplace. The key
was to empower the sector to drive the effort, in order to
prevent raising prices to an unaffordable level for parents
and to ensure economics that worked for childcare
providers. He explained that all providers' profits had
been strapped. He spoke to the importance of supporting
childcare providers and avoiding putting them out of
business. He stated that the last two years had been
incredibly hard for the sector and every provider. He
believed it was important for the legislature to recognize
that circumstances and economics would change for providers
and families.
9:11:44 AM
Representative Fields continued to address slide 7. He
believed the policy structure should be flexible enough to
let the industry adapt to changing circumstances. He stated
that if the industry received another federal funding
infusion like it received through American Rescue Plan Act
(ARPA), the legislature should empower the industry to
invest the funding in the most sensible way.
Representative Wool referenced Representative Fields'
statement that he did not want to raise prices to make
childcare unaffordable. He asked if that meant
Representative Fields was willing to raise the cost a
little. He thought childcare was already unaffordable. He
stated that many parents opted not to put their children in
childcare because it did not pay. He heard from parents who
would rather stay home than breakeven and work all day
while someone else raised their kids. He asked how to
combat the issue.
Representative Fields agreed that childcare was
unaffordable for many families. He highlighted what people
paid for the care they receive and explained that families
who were lucky with high paying jobs were able to send
their kids to high quality childcare centers. He shared
that he and his wife paid well over $2,000 per month for
their two children, which was larger than most people's
mortgage. He stated it was so expensive, it did not make
sense to go to work to pay for childcare in many jobs. He
emphasized it was terrible for the economy because it
deterred people from entering the workforce. He explained
that the bill's structure provided a framework for
childcare providers to negotiate with the state to allocate
scarce resources. For example, if the bill had been in
place when the state received $2 million per year in
additional ARPA funding, childcare providers (owners and
workers) would have directly been at the table at the
Childcare Program Office to allocate the $2 million per
year. He suspected they would not have wanted to raise
prices on parents one penny because parents were strapped
during the pandemic as well.
Representative Fields did not want to micromanage decisions
on resource allocation. He believed childcare providers
should drive the decisions. Currently, the issue was left
up to the Childcare Program Office within the Department of
Health and Social Services (DHSS). He elaborated that the
office had been unstaffed for months and had finally been
filled. He stated that long-term DHSS employees were
incredibly devoted to their jobs, but there was no
substitute for having industry at the table to allocate
scarce resources in a challenging sector.
9:14:08 AM
Representative Fields emphasized that the best state
employee would not have the granularity of detail about
what was taking place at the sector level if they were not
talking with providers. He stressed that providers had to
be driving the investments. He stated it was the premise of
the bill: the bill did not micromanage how investments were
allocated.
Representative LeBon looked at the first bullet under key
goals on slide 7: raise wages/benefits so workers have
living wage. He believed legislators could all support
everyone having a living wage. He remarked that the current
pressure on daycare operators was that paying workers a
higher salary or benefits meant the need to increase rates
charged. He asked if the state had a program to help lower
income families receive a subsidy on their payment for
daycare services. He asked how the program would work with
an increase in wages/benefits. He asked if the added
expense could be passed to the state through a subsidy.
Representative Fields confirmed that the state did have a
subsidy program for lower income parents, but it did not
cover the cost of care. For example, his children's
childcare center had subsidized slots, but because the
subsidies did not provide the full cost of care, other
parents (himself included) subsidized other kids at the
school. He added there was also an inadequate number of
slots. He explained that the bill did not mandate a living
wage or an increased number of slots. He explained that if
the state received $2 million more per year in ARPA
funding, the bill would create a structure where childcare
providers would decide how much of the funding would go to
higher wages/benefits for workers, how much would increase
the dollars per slot (to more closely match the cost to
provide care), and how many dollars went to increasing the
number of slots. He believed providers would want to do all
of those things. Providers would determine how to balance
multiple meritorious investments. He believed the
legislature needed to provide the right structure and it
would be hard as legislators to determine wage and slot
increases when they did not have a detailed view of the
industry.
9:16:30 AM
Representative LeBon provided a scenario where he was an
operator of a daycare center who now needed to provide a
higher wage and improved benefits. He noted that the state
formula would not help cover the expense as currently
written. He considered that perhaps it should be looked at.
He wondered if there would be a risk of putting daycare
centers out of business if their profit margin was squeezed
and added costs could not be passed to the state or
families. He noted that some families paid 100 percent of
the cost and lower income families received a subsidy for
some portion of the cost. He did not know what the split
was. He wondered if it was 50/50. He surmised the free
market system would say the operator was being squeezed and
they may not be able to recover the added cost.
Representative Fields agreed. He explained it was the
reason the bill did not mandate a living wage or minimum
wage in the sector because he believed there was a risk it
may make it uneconomic for some providers. He clarified
that all the bill did was provide a framework for childcare
providers to work with the state to figure out how to raise
wages and allocate scarce resources. He did not believe
enough was known to be able to set a minimum wage without
potentially having unintended negative impacts on
providers.
Representative Wool referred to Representative Fields'
statement that he had two children in daycare
simultaneously. He shared that his children had not been in
daycare at the same time. He recalled waiting for
kindergarten to start so he would no longer have to pay for
daycare. He stated that at the time kindergarten had been a
half day, but it was currently a full day. He referenced
discussions about funding statewide Pre-K, which he assumed
had a large price tag. He asked if there was some way the
funding could go towards helping daycare programs be more
robust and cost-effective as opposed to a "full blown" Pre-
K, which he understood required numerous certified teachers
and education specialists.
9:19:55 AM
Representative Fields believed any increase in Pre-K
funding in the range of numbers discussed was augmenting
care and not replacing the private preschools. He stated
that because the need was large, there was not a risk of
having too much Pre-K. Only some of the need was being
filled.
Representative Josephson asked for verification the plan
under the legislation was to allow the childcare sector to
negotiate under the Public Employees Relation Act (PERA).
Representative Fields characterized the situation as fairly
arcane in terms of labor relations. He stated that the
National Labor Relations Act (NLRA) was passed in the
1930s. He described Congress at the time as a body with a
northern liberal, southern Dixiecrat coalition and
explained that in order to establish collective bargaining
rights, the Dixiecrats demanded exclusion of domestic work
and farm work because it was primarily done by Black people
(a reality of racism at the time). He elaborated that
because of the law, state legislatures had the ability to
manage labor relations in those two areas: domestic work
and farm work. Therefore, the state was allowed to
establish a sectoral bargaining structure in the area of
childcare rather than the traditional employee/employer
bargaining structure used for all other fields. He
explained that Alaska would be preempted by federal law
from doing the same for healthcare or construction, sectors
that were clearly regulated under the NLRA. He detailed
that because the NLRA excluded domestic work, the Alaska
Legislature had a lot of flexibility to establish a
sectoral bargaining model, which had been done by 11 other
states.
Representative Fields explained that under a sectoral
bargaining model, childcare employees would not be public
employees; however, there had to be a way for the employees
to bargain. He explained that in working with Legislative
Legal Services, the way to establish a bargaining path
would be for the Alaska Labor Relations Agency (ALRA) to
manage an election where all providers (employees and
employers) would vote on whether to engage in sectoral
bargaining. He noted the vote would be conducted by ALRA.
He elaborated that if a majority of participants voted in
favor, there would be a sectoral bargaining framework. He
furthered that the childcare sector would negotiate, not
employee versus employer, but by sector with the state
childcare program office. He explained it was the method
allocation decisions would be made in regard to resources.
Representative Fields clarified that if desired, childcare
providers could also negotiate for things like benefits or
a minimum wage in the sector that may be linked to
training. He stressed that the bill did not mandate the
sector to bargain on any specific thing. He stated that
sectoral bargaining may not be familiar to many people in
the U.S.; however, it was the way most bargaining was done
in many northern European countries. He explained that the
industry drove the issues addressed at the bargaining
table. He listed potential priorities such as wages,
safety, benefits, the linkage between wages and training.
He emphasized that the bill did not micromanage the issues.
He stated that childcare providers would be sensitive to
their needs every year. He believed the state should
establish a structure that allowed the sector to make the
decisions.
9:23:51 AM
Representative Josephson asked for verification that the
ALRA would act as the umpire.
Representative Fields replied that ALRA would conduct the
election to determine if the sector "wants to do this."
Representative Johnson referenced the statistics provided
on Norway and asked why Representative Fields had selected
the particular country.
Representative Fields answered that Norway was at the high
end of investment per year; the country had been used to
show a range.
Representative Johnson highlighted that Norway had a
population of about 5.5 million, $1.3 trillion in its
sovereign wealth fund, a budget of $18 billion, and a
birthrate of 11 children per 1,000 people. She remarked
that the country had more money than Alaska. She was
interested in an apples-to-apples comparison.
Representative Fields answered that it was a challenge. He
fully acknowledged the state would not be investing
thousands of dollars per child per year in childcare in the
coming year. He contemplated how to establish a structure
where providers were empowered to have a little more voice
in allocating scarce resources.
Representative Johnson remarked there were 11 states
unionized. She asked about Illinois' retention.
Representative Fields answered that the House Labor and
Commerce Committee had heard from providers in the State of
Washington who had utilized the model. The providers had
described the positive impact that had occurred over time
within the sector. He relayed that testimony from providers
in Illinois had not yet been heard.
Representative Johnson asked why government was getting
involved. She thought it was typically a grassroots issue
organized by unions or workers.
Representative Fields answered that California was the most
recent state to engage in sectoral bargaining. He explained
it had taken ten years of working with providers and state
policymakers and educating people. He recognized it was
complicated policy. He shared that employers and parents
were vocalizing there was a real problem [in Alaska] and he
did not see solutions on the table; therefore, he had put
forward a potential solution. He noted he had been clear in
the House Labor and Commerce Committee that if someone had
a better idea, it should be pursued. He had not yet seen a
better idea. He stated that perhaps the House Finance
Committee would have one.
9:27:06 AM
Representative Johnson asked, "A better idea for what?"
Representative Fields replied, "For how to address the very
pressing needs that we have in the childcare sector."
Representative Johnson asked what the needs were.
Representative Fields replied the needs were a lack of
adequate childcare supply and affordable childcare for
parents.
Representative Johnson asked for the percentage of unfilled
need.
Representative Fields replied that it was difficult to say.
He had heard many anecdotal stories from parents who had
been forced to stay out of the workforce. He had received
visitors from business organizations identifying the
problem as one of their top issues. He did know if the
number of parents who had been unable to get care would be
quantifiable.
Representative Wool asked if there were childcare providers
who supported the legislation. He asked if providers were
concerned that if employees organized, wages would
increase, and facilities would have to charge more.
9:28:20 AM
Representative Fields responded that he had heard support
from some childcare providers and questions from others. He
clarified that the bill used an opt-in model, also called a
right to work model. He explained that if the sector
decided to bargain sectorally, no individual childcare
provider was required to participate. He did not believe
there would be support from providers if it was coercive.
He had heard some support for the model. He highlighted the
diversity of the sector with hundreds of providers,
including home-based providers. One of his goals had been
to meet with and talk to as many of them as possible. One
thing that was very clear from providers was the desire for
more of a voice. He stated it was the number one goal of
the bill.
Co-Chair Merrick noted there would be invited testimony.
Representative Wool stated his understanding that the bill
would enable workers and childcare facilities to organize
to perhaps improve wages and working conditions without
raising the rates on parents. He surmised it would be an
organized way to get more ARPA funds or government
subsidies to fill the gap.
Representative Fields agreed. He referenced a previous
question by Representative Johnson and relayed there had
been a recent survey showing 77 percent of parents in
Alaska reported missing work due to childcare issues in the
past three months. He noted it was a survey and did not
include every Alaskan. The survey also showed that 36
percent of parents postponed school or training due to
childcare issues, 7 percent had to leave a job due to
inadequate childcare, and 26 percent of parents had to lean
on family members due to a lack of formal childcare.
Co-Chair Merrick asked for the survey source.
Representative Fields answered that the survey was a Center
for American Progress report titled "Untapped potential in
Alaska."
TRISTAN WALSH, STAFF, REPRESENTATIVE ZACH FIELDS,
elaborated that the report was included in committee
members' bill packets and was from the U.S. Chamber of
Commerce Foundation on untapped potential in Alaska. He
relayed that the report had been published in part with the
Alaska Chamber of Commerce.
Representative Fields appreciated the engagement by
committee members. He noted that in California, the most
recent state to implement the model, the providers had
worked with the state to negotiate a 15 percent
reimbursement rate increase. He reiterated his earlier
testimony that the bill was merely a framework and real
progress would happen over time as the sector bargained
with the state. He highlighted that California had
immediately made some measurable progress.
9:31:53 AM
Representative Carpenter appreciated the opportunity to
have a policy conversation. He asked what constitutional
authority the bill drew upon.
Representative Fields answered that because the federal
government had not preempted states in the area of labor
relations with respect to domestic workers, which included
childcare, the state had the ability to set labor policy.
He clarified that the state's purview was limited to
domestic workers and farmworkers under the National Labor
Relations Act [passed in 1935]. He cited Article 10 of the
constitution specifying that matters not managed by the
federal government were left to the states.
Representative Carpenter clarified that his question
pertained to the Alaska Constitution, not the federal
constitution.
Representative Fields asked for clarity on the question. He
wondered if Representative Carpenter thought the state
constitution did not authorize the legislature to deal with
childcare policy.
Representative Carpenter highlighted that the legislation
focused on making a policy call and setting it in statute.
He asked which portion of the state constitution allowed
the state to create law that would impact so many sectors
of the economy. He wondered if the bill drew on the general
welfare clause allowing the state to do what it wanted if
there were enough votes. He used an example where the state
had to have an education system because it was mandated by
the constitution. He asked how the bill's action was
authorized under the state constitution.
Representative Fields viewed the bill as simply enabling
commerce and full participation by parents in the
workforce. He had not looked at the constitutional
foundation for legislators to address the issue in statute.
He would take a look. He believed the state's engagement in
childcare was long established through the Childcare
Program Office. The question was how to best do it.
9:35:04 AM
Representative Carpenter remarked it was a policy call that
would potentially bring a subsidy to the industry, which
would promote childcare as a means to raise kids. He stated
it was a long-term cultural impact across the sector. He
asked if the bill was promoting value in other people
raising someone's children as opposed to people raising
their own children by subsidizing one over the other.
Representative Fields believed every parent should be able
to make the choice about the best way to raise their
children vis--vis how many parents work for wages and
whether one or more parents was able to stay home and take
care of their kids. He pointed out there were not many jobs
that could support a family where one person could work and
the other could remain home to care for the kids. He
highlighted the need for childcare for parents to be able
to support their family. He was not trying to dictate that
childcare was better than parents staying home, but he
thought parents should be able to make the choice.
Representative Carpenter suggested what if a solution also
included a subsidy for parents to stay home and raise their
kids. He remarked it would be a state policy placing value
on parents staying home and raising their children as
opposed to a policy promoting parents giving the
responsibility to someone else.
9:37:32 AM
Representative Fields believed there was a lot of value in
that. He remarked there had been other policy discussions
about people who stay home to take care of their elderly
relatives. He noted that many states did so.
Representative Josephson referenced a legal case that had
stuck with him when he had taught constitutional law for
five years. The case was called Laughlin Steel. He
elaborated that around 1937 the U.S. Supreme Court held
that the right to organize was a fundamental right. He
detailed the decision applied to the private sector's right
to organize and was an interpretation of Wagner Act or the
Fair Labor Standards Act. The other thing to consider
relative to Representative Carpenter's point was the
freedom of association, which was a part of the right to
organize.
Representative Edgmon stated that Alaska's population was
aging, and the fastest growing segment was seniors. He
remarked there were more people choosing to leave the state
for the past nine to ten years consecutively. He noted a
few of the years there had been people moving back into the
state, providing a net gain in population. He asked about
the sector population the bill may affect.
Representative Fields answered that the demographic trends
in the state were one of his motivations. There had been
significant net outmigration among people of working age.
He noted the state had an aging population on the one hand;
however, he had heard in the Tribal Affairs Committee
earlier in the day that the median age in the AVCP
[Association of Village Council Presidents] region [Yukon
Kuskokwim Delta] was 25. He highlighted that the state's
population was becoming younger on one end of the spectrum
and older on the other. The state was losing people of
working age, which was problematic. There were fewer people
earning and able to support their families. One of the
goals of the bill was to ensure it was affordable for
working aged people to stay in Alaska, afford childcare,
participate in the workforce, and ensure a good environment
to take care of aging relatives. He believed there was an
economic imperative to make sure it was practical for
families to raise their kids and to care for parents who
may be aging. He stated it was a good thing when
multigenerational families were retained in Alaska. In
contrast, he believed when it was only affordable to take
care of multigenerational families outside of Alaska, the
loss of population and economic activity was a bad thing.
9:40:52 AM
Vice-Chair Ortiz thanked Representative Fields for bringing
the bill forward. He appreciated the hearty discussion on
such a complex issue. He found it fascinating to think
about the intersection of economic and social forces and
change that had taken place over the past 30 years. He
stated the bill aimed to address a real issue. He heard
anecdotally all of the time in his community about the need
for more childcare options for parents. He thought
Representative Carpenter brought up a good point about
whether the bill communicated the state was putting higher
value on parents' ability to have their children raised by
childcare providers. He stated it was a pretty big
question. He stated his heart said it was not a good
direction to go. He thought it was a great bill for
discussion. He stated that ignoring the problem would not
help. He lauded the sponsor for bringing the bill forward.
Representative Fields answered that he thought Vice-Chair
Ortiz's point about parents being able to provide care was
important. In his ideal world, people would have enough
access to jobs that every family could have one parent work
outside the home and one parent provide care in the home if
they chose. His office could follow up to see if the
Childcare Program Office had ever looked at the issue and
whether subsidies could be extended to parents raising
their children at home thereby foregoing wages in the
private market. He thought it would be a balanced approach
and he did not know how much it had been considered.
9:43:21 AM
Co-Chair Merrick moved to invited testimony.
CANDICE RICHEY, HOME CHILD CARE PROVIDER, CANDI'S TOT STOP,
FAIRBANKS (via teleconference), shared information about
her business. She stated childcare providers were often
asked what they needed; however, they were not heard when
they provided their opinions. She shared that providers had
struggled for a long time to get what they needed and
really needed support. She believed HB 149 would provide
support. She had been in awe when hearing about the bill
because it included topics that had been a concern for many
years within the industry. She stated that the bill would
give providers a voice and included topics such as wages,
health insurance, leave, and retirement. She worked between
12 and 16 hours per day and the wages she earned were not
enough to maintain a living and care for her family. She
noted the same applied to hiring staff to fill positions.
Ms. Richey highlighted the high rate of turnover in the
industry because providers could not afford to pay
employees as much as other jobs. Finding qualified staff
was difficult and it was hard to retain employees because
they could not offer benefits provided by other employers.
She referenced money childcare providers had to invest in
employees for training and background checks. She remarked
that state funds had been invested in the sector, which
showed how powerless the industry was when it came to how
the funds were used. She shared that benefits were off the
table for her business due to high premiums. She stated
that creating a retirement for herself had been impossible.
She had other bills that were of more immediate importance
such as paying to put food on the table and keeping her
business open.
Ms. Richey highlighted the high cost of living in Alaska.
She relayed the bill would support her career field in many
aspects and would give providers a voice in the industry's
future. She added that providers would be able to determine
where funds were most needed. She emphasized the support
was needed more than ever to ensure childcare in Alaska was
sustainable, affordable, and competitive with other
industries.
9:47:04 AM
CHRISTINA EUBANKS-OHANA, EXECUTIVE DIRECTOR, HILLCREST
CHILDREN'S CENTER, ANCHORAGE (via teleconference), read
from a prepared statement:
The reality of poor wages and benefits for this
workforce detrimentally impacts the working family. A
healthy early learning system requires a variety of
providers both home and center based that are well
trained and compensated and have a voice in the work
conditions. I believe that House Bill 149 before you
is an avenue to address this issue. Attracting and
retaining a quality workforce has been a continued
struggle during the 18 years I've worked in Alaska
providing childcare services.
While the state has changed regulations that increase
the cost of care, the reimbursement rates have not
kept pace. This is met in increase in cost to families
and continued low wages and little to no benefits for
the workers. The foundation of a high-quality early
childhood system is a well-trained and fairly
compensated workforce. Unfortunately, Alaska's system
does not provide for livable wages to keep a trained
workforce.
Early childhood educators are one of the lowest paid
professions in the state. While the cost of childcare
is high, often comparable to a monthly mortgage or
rent payment, the income does not cover overhead and
wages. This leads to high rates of turnover in
providers, which is alarming because of consistency in
caregiving during a child's formative years is
essential to provide a secure foundation for the child
to grow from. This financial investment in early
childhood saves the state money in education and
health costs in the long-term. While this bill does
not fix all of the issues in early childhood, it
provides a policy solution that allows a greater voice
for staff, center directors, and home providers in
working with the state childcare program office. The
industry should have a voice in decisions that impact
the cost of care.
Ms. Eubanks-Ohana continued to testify in support of the
legislation. Childcare providers were the experts at
providing childcare in Alaska and should be afforded a seat
at the table. She shared that the Childcare Program Office
received the primary amount of its funding through the
Childcare and Development block grant. She explained that
the way the office had written regulations would have
incentivized childcare providers to close. Additionally,
the office had proposed regulation changes that would have
substantially increased the cost of care. Providers had to
explain the ramifications to the office. The bill would
enable providers to be at the table from the beginning to
work together to come up with solutions.
Ms. Eubanks-Ohana addressed an earlier question about the
need for childcare. She shared that her center was
currently filled through May of 2023. She elaborated that
parents often called when they were pregnant to get
guaranteed spots. She received one to two calls per day
from families currently looking for childcare. She
emphasized there were not enough spaces in the state to
meet the current need. She stated the bill would hopefully
enable the sector to attract more providers. She urged the
committee's support for the bill.
9:51:36 AM
BLUE SHIBLER, SOUTHEAST ALASKA ASSOCIATION FOR THE
EDUCATION OF YOUNG CHILDREN (AEYC), JUNEAU (via
teleconference), currently served as the executive director
of AEYC. Previously she had been a childcare business owner
for over 20 years. She had seen firsthand many of the
impacts discussed in the current meeting such as how low
wages in the industry impacted the quality of care
businesses could provide for families. She pointed out that
childcare providers were not trying to raise other people's
children. She clarified that providers were partnering with
working families to help children get their developmental
needs met in high quality environments.
Ms. Shibler reported that childcare as a business model was
in market failure and had been for quite some time. She
stated that when a necessary service (necessary because
families needed to work and put their children somewhere)
failed to correct itself in a free market, public
intervention was often needed. She highlighted that parents
were paying an average of 10 to 20 percent of income on
childcare costs. She stated that the revenue still did not
allow programs to pay worthy wages. She explained that
because the tuition income from parents was typically the
sole source of revenue for childcare businesses, they had
no means to compete in the tight labor market. Other
businesses were increasing wages and offering benefits,
while childcare wages remained flat and falling well below
what was considered to be livable in the current economy.
Ms. Shibler believed building a strong, quality supply of
affordable childcare was critical in creating economic
recovery. The effort needed to start with creating better
workforce conditions for providers. She stressed that
childcare workers were key stakeholders in the childcare
industry and should be heard from when the state was making
decisions on how to invest financial resources in their
work. She addressed questions from members earlier in the
meeting. She shared that in Juneau, as of January 2022,
there were 221 children on waitlists for childcare
programs. She stated that while some of the programs
technically had available slots, they did not have enough
staff. She shared that programs reported needing a total of
16 to 20 more employees in order to start taking kids off
their waitlists.
9:55:40 AM
Co-Chair Merrick OPENED public testimony.
MIKE COONS, SELF, PALMER (via teleconference), [poor audio
quality] asked how much more it would cost to have unions.
He spoke against the legislation. He did not support using
California is a model.
Co-Chair Merrick CLOSED public testimony.
9:59:19 AM
Co-Chair Merrick asked the department to review the fiscal
note.
NICOLE THIBODEAU, HEARING EXAMINER AND ADMINISTRATOR,
ALASKA LABOR RELATIONS AGENCY, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT (via teleconference), shared that
Alaska Labor Relations Agency administered the Public
Employment Relations Act. The agency's mission was to
promote harmonious and cooperative relations between
government and its employees. The mission was carried out
by settling disputes between public employers and unions
and by overseeing representation elections. She detailed
that the legislation would create a bargaining unit of
childcare workers and under the Public Employment Relations
Act the agency would conduct a mail ballot representation
election to determine the unit composition and
representatives. She explained the election would be a one-
time cost of between $16,000 and $46,000 if every employee
received a vote. The cost range reflected uncertainty with
respect to the bargaining unit size. The agency used
estimates of numbers of workers, not providers. She stated
that THREAD's 2020 economic impact report estimated about
6,500 direct childcare providers in Alaska. She elaborated
that the Department of Labor and Workforce Development
Research and Analysis Unit estimated pre-pandemic childcare
worker numbers to be between 3,200 and 3,300. The agency's
estimate of the bargaining unit size was based on between
3,200 and 6,500 workers or voters.
Ms. Thibodeau reported that after reviewing the agency's
last seven years of data, on average the agency conducted
about two elections per year and the average unit size was
about 19. The agency had a staff of three with a very
streamlined budget; therefore, the election would be a one-
time significant expense and effort for the agency. The
fiscal note included a hearing and estimated that labor
would include a temp or contracting out assistance to
produce ballots in the neighborhood of $3,500, ballot
postage would cost between $3,800 to $7,800, ballot packets
would cost between $4,000 and $7,000, the regulations
project would be about $500, legal fees to the attorney
general office were estimated at zero to $10,000, the cost
for reprinting a pamphlet would be about $900, and a
hearing would potentially cost between $1,800 and $15,000
for a total of between $16,000 and $46,000.
10:02:42 AM
Representative Carpenter asked if ALRA managed any other
private sector collective bargaining elections.
Ms. Thibodeau answered in the negative. She elaborated that
ALRA only handled public sector collective bargaining.
Representative Carpenter referenced previous testimony from
the public. His takeaway had been the need for a strong
economy with more high paying jobs was necessary. He had
also heard that some amount of state subsidy was necessary.
He understood the bill did not include a subsidy and was
limited to offering the ability for collective bargaining.
He provided a scenario where the state went in the
direction of the action under the bill. He asked where a
subsidy would come from. He assumed that largely, daycare
workers were not paying corporate income tax currently due
to their size. He thought the pool of funds the subsidy
could come from would be some amount of the corporate
income tax collected through non-oil or oil revenue,
Permanent Fund earnings, or federal subsidies. He asked the
bill sponsor where the additional funding come from.
Representative Fields answered that the ongoing federal
funding stream was called the Childcare Development Block
Grant, which had been recently increased by federal
legislation. He explained that when the grant had increased
it had heightened the need to empower providers to
negotiate and help drive investments. Whether the state
also wanted to increase funding to childcare was a good
question, and beyond the bill's contemplation of a sectoral
bargaining structure.
10:06:04 AM
Representative Carpenter asked for clarification that it
would be the sponsor's intention that the likely follow-on
subsidy would come from federal funds at least to begin
with.
Representative Fields replied in the affirmative. He
believed that given there were recently increased federal
funds, it was a good time to consider whether the state had
the best structure for the industry to have a seat at the
table working with the state. He noted it was not to
preclude the question about whether the legislature should
do more for childcare. He believed there was a current need
to empower the sector given the increased federal funds.
HB 149 was HEARD and HELD in committee for further
consideration.
10:06:59 AM
AT EASE
10:07:50 AM
RECONVENED
Co-Chair Merrick reviewed the schedule for the following
meeting.
ADJOURNMENT
10:08:08 AM
The meeting was adjourned at 10:08 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSHB 149 Supporting Document-Juneau Empire- 61% of Alaskans live in child care deserts 2.2.2022.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 149 |
| HB 149 Supporting Document-Combined Letters of Support 3.4.2022.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 149 |
| HB 149 Supporting Document-Chamber of Commerce Report Childcare 2022.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 149 |
| HB 149 UPDATED Supporting Document-HFIN PPT. Raising Wages Benefits for Child Care Workers.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 149 |
| HB 104 CS WorkDraft FIN v. I.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 104 |
| HB 158 Public Testimony Rec'd by 030722.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 158 |
| HB 104- Refined Fuel Surcharge Handout- 3.7.22.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 104 |
| HB 149 Support Letter 030722.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 149 |
| HB 158 Amendment 1 Thompson 030822.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 158 |
| HB 149 Support Letter 030822.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 149 |
| HB 158 Public Testimony Rec'd by 031422_.pdf |
HFIN 3/8/2022 9:00:00 AM |
HB 158 |