Legislature(2001 - 2002)
04/30/2001 04:55 PM Senate HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 192-INCREASE CHILD CARE GRANTS
KRISTY TIBBLES, legislative assistant to Senator Drue Pearce,
testified that SB 192 would increase the monthly base rate for
child care from $33.00 to $50.00 per child and remove the $50.00
cap that currently exists in the Child Care Grant Program. This
is a state funded program that provides grants to licensed child
care centers and homes for the benefit of the facility and the
children. The grants are used for staff salaries, benefits,
substitute staff, goods or services relating to the health
nutrition and safety of children in care, age appropriate
equipment and supplies and activities for the children.
CHAIRWOMAN GREEN reported she had heard from many child care
providers in her community particularly as other state and
federally funded programs receive substantial grants and
training.
Side B
She's always encouraged to hear of increased opportunities for
people to make a choice on child care.
YVONNE CHASE, Deputy Commissioner of Early Development for the
Department of Education and Early Development, agreed that it is
essential for small child care providers in particular to get the
necessities to continue in business. Because this is a flexible
pot of money, it allows for a wide variety of uses, which is of
particular value to small providers.
Clearly, as the number of providers increases, the base rate
decreases if the current level of appropriation stays the same.
Because the department doesn't know how the final bill will be
configured, they have submitted a fiscal note that reflects a
range of costs depending upon whether just current licensed
providers in the child care grant program receive a base increase
or whether current and new program members are included. She
emphasized that this is not an entitlement.
CHAIRWOMAN GREEN asked whether there is a possibility that child
care providers will simply drop out of the business altogether
causing a shortage of care givers.
DEPUTY COMMISSIONER CHASE said that all states are finding that
because this is such a low pay industry, it is difficult to
attract and retain quality people. Small providers feel this may
be the only money that may allow them to increase salaries,
provide training and perhaps offer some health insurance.
CHAIRWOMAN GREEN asked whether the language in this legislation
could change a grant to an entitlement program.
DEPUTY COMMISSIONER CHASE was not certain whether the language
would make it an entitlement but this is why they gave a range on
the fiscal note.
CHAIRWOMAN GREEN responded this might be an optional grant
program, which would keep it from being an entitlement. She then
read the following: "A grant under (a) of this section shall be
$50.00 per month for each child the child care facility cares
for, or for each full time equivalent as determined by the
department." She then asked whether that was an entitlement.
DEPUTY COMMISSIONER CHASE replied that currently and in the past,
a child care grant is not an entitlement. They have increased the
rate and limited the number of providers who may participate
depending on the amount of funds available.
CHAIRWOMAN GREEN then asked Ms. Tibbles whether she could clear
up the confusion since she did not want to "change a may to a
shall if that's not the intention."
MS. TIBBLES replied that Senator Pearce's intention was to make
the base level $50.00 and then apply geographic adjustments. She
was not sure about what she meant by entitlement.
CHAIRWOMAN GREEN said a comparable entitlement would be Medicaid.
If seven people came in for service then seven people receive the
service. Anyone who meets the qualifications automatically
qualifies, so it is not possible to determine how many people
will qualify ahead of time. If this is the case, she wanted to
make sure that the fiscal note reflects that adequately.
She pointed out they could pass the measure along and let the
Finance Committee make the decision.
DEPUTY COMMISSIONER CHASE closed by saying that the department is
supportive of the Child Care Grant and also of the increase of
the base rate. She wanted to make sure it was understood that as
the number of providers increases, those same funds are spread
across more providers and the base rate goes down.
CHAIRWOMAN GREEN said, "That's the difference in [an] entitlement
program. Nothing goes down; just the total amount goes up every
time someone else walks through the door."
JOY LYON, President of Alaska Chapter of the National Association
of the Education of Young Children (AAEYC) represents individuals
and groups across the state that are concerned about young
children. She testified in strong support of SB 192. Grant funds
are typically used for staff salaries that average just $8.14 per
hour. An increase in the base rate is needed to help attract and
hold quality staff and reduce the current 40 percent turnover
rate. Additionally, the Child Care Grant is the only incentive
for family child care providers to become licensed.
Number 507
GWENI MAKI, owner and director of the ABC Child Care Center,
testified in support of SB 192. The increase in the base rate
would allow her to improve salaries for her staff to decrease
staff turnover.
SENATOR WILKEN wanted to cover several finance issues that would
be developed further when the bill is heard in the Finance
Committee. First he pointed out this is a $34.528 million
program. The legislature and administration can take pride in the
fact that by midyear 2001 there is no longer a wait list for day
care.
In 2000, the grant program was $1.7 million and in 2001 it was
$2.25 million and in 2002 it is $3.7 million which means a base
rate of $23.00 in the first year, $33.00 in the second and with
the monies appropriated in 2002 it will rise to about $40.00.
This reflects extraordinary growth in the grant program and
really shows you the impact of this bill. When you multiply the
area cost differential by $33.00 you get about $48.00 per day for
those areas with high costs. When you use $40.00 and use the same
area cost differential you get $58.00. Therefore, the $50.00 cap
locks in people with higher costs at $50.00. Raising the base
rate to $50.00 would mean those same people would get somewhere
around $78.00 per day making this a very expensive bill.
With the increase from $23.00 to $33.00, he wanted to receive
information on how that money was used. He sent a letter to 50
child care providers in Fairbanks asking them how they used the
extra money and he received a response from just three providers.
He said he would try again and expected to receive an answer.
Next, he expressed disappointment in the fiscal note. He thought
it was possible to take the existing day care population and
multiply it by the higher number, which would give the fiscal
impact today.
DEPUTY COMMISSIONER CHASE replied that was the reason for the
range in the fiscal note. The lower end represents moving the
individuals currently on the program up to the $50.00 base rate
that is adjusted for their area of operation.
SENATOR WILKEN asked whether that was the $1.5 million.
DEPUTY COMMISSIONER CHASE said it was the additional funds
bringing the total up to $3.7 million. Next she showed the total
estimated population that is available to apply for the grant if
it were open to all licensed providers and they opted to apply.
In years past, she thought many did not apply because the small
amount of money available was not worth the additional paperwork.
As the rates increased, more providers returned to the program.
SENATOR WILKEN cautioned her to have a better fiscal note when
the bill was heard in the Finance Committee.
DEPUTY COMMISSIONER CHASE agreed to do so.
SENATOR WILKEN then pointed out that several years ago, with HB
40, daycare moved to the Department of Education providing a
starting point in government. The legislature wants to be able to
look back ten years from now to evaluate the costs. During the
interim they will be working with the department so that next
year there will be more information about what providers are
doing or plan to do with the money. Since this is an expensive
but necessary program there needs to be accountability. With
that, he reiterated his support for the program.
CHAIRWOMAN GREEN said one of her concerns is that there tends to
be a disincentive for private daycare providers. She does not
want all providers to be government directed programs. She wants
to equalize the gift to Head Start and Boys and Girls Club but
does not want to put others out of business. It is her preference
to allow individuals a choice of child care options.
SENATOR WARD moved SB 192 and accompanying fiscal note from
committee with individual recommendations.
There being no objection, the bill moved from committee.
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