Legislature(2023 - 2024)DAVIS 106
03/14/2023 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB89 | |
| HB80 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 89 | TELECONFERENCED | |
| *+ | HB 80 | TELECONFERENCED | |
| += | HB 60 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 89-DAY CARE ASSIST./CHILD CARE GRANT PROGRAM
3:03:13 PM
CHAIR PRAX announced that the first order of business would be
HOUSE BILL NO. 89, "An Act relating to the day care assistance
program and the child care grant program; and providing for an
effective date."
3:03:40 PM
REPRESENTATIVE JULIE COULOMBE, Alaska State Legislature, as
prime sponsor, gave a brief introduction to HB 89. She stated
that there are two ways HB 89 would strengthen the child care
system. It would expand the number of families who can afford
child care by making subsidies more inclusive, and it would
align the subsidy level to reflect the actual cost of care.
After meeting with state departments and trade organizations,
she expressed the understanding that the hiring crisis is
contributing to the unavailability of daycare, but there are
many other factors, including the billing requirements on
daycare centers. The result of this is the cost of care is not
covered, and daycare centers are going out of business. She
added that the COVID-19 pandemic contributed to this. She
stated that while other solutions exist, HB 89 would address the
accessibility problem. The proposed legislation would do this
by increasing the number of families who could access the
vouchers and the number of vouchers available. Connected to
this, she said, there is a study which would investigate the
actual cost of care, not the current market's cost. She stated
that she would put forth an amendment to cover the cost of the
study.
3:07:18 PM
DANIEL ROBBINS, Staff, Representative Julie Coulombe, Alaska
State Legislature, on behalf of the prime sponsor,
Representative Coulombe, presented a PowerPoint on HB 89 [hard
copy included in the committee packet]. He began on slide 2 and
stated that the proposed legislation would address the lack of
affordable quality child care in the state, which has
contributed to the following: labor shortages, endangerment of
children, economic insecurity of families, and the decrease in
workforce participation. He pointed out the proposed
legislation would strengthen the child care sector by improving
access for families, which in turn would send parents back into
the workforce, as seen on slide 3. In reference to the next
slide, he said, HB 89 would align the subsidy level to reflect
the actual cost of care, which would strengthen the child care
system by expanding the number of families who could utilize
daycare vouchers. He pointed out on slide 5 that the child care
crisis is a result of low wages, labor shortages, and declining
numbers of child care providers. He continued that the decrease
in labor force participation equates to worker shortages, as
seen in the graph on slide 6. The graph relates that Alaska's
child care workforce decreased 20 percent between 2018 and 2020.
MR. ROBBINS pointed to slide 7 which related that child care
subsidies are inadequate and do not reflect the actual cost of
care. He explained that providers lose money when they offer
care to low-income families on subsidies; however, this does not
affect only low-income families. To compensate, providers raise
rates, affecting middle-class families who are ineligible for
subsidies. In turn, many middle-class families cannot afford
child care; therefore, a parent would need to stay home to care
for children. He moved to slide 8 which addressed the
eligibility for subsidies. He stated that the threshold to
receive subsidies for one earner is 85 percent of the state
median income, or $60,144. He noted that the federal poverty
line in Alaska for a two-person household is $24,640, which
means the current eligibility threshold is 244 percent of the
federal poverty line. He reasoned that this leaves most of the
middle class without affordable care, which results in severe
labor shortages across the state. The proposed legislation
would raise the eligibility threshold to 300 percent of the
federal poverty line, or $73,920. He stated that the level of
subsidy would be scaled by the Department of Health (DOH) based
on need. He stated that the result would be an expanded number
of families who could afford care, and this would allow more
Alaskans to reenter the workforce.
3:11:10 PM
MR. ROBBINS, continuing to slide 9, pointed out the subsidy for
child care is currently based on a market rate survey. He
stated that this underestimates the cost of care, which puts
providers at financial risk. He explained that because of
inadequate subsidies for low-income families, providers are
forced to raise rates, pricing some families out of child care.
He stated that the proposed legislation would align subsidy
rates with the actual cost of care, improving financial
stability for providers and affordability for middle-class
families. He expressed the opinion that a family with a
household income of $60,000 per year should not spend more than
$4,200 per year on child care costs. He compared this with
$6,600 per year now being spent. Referring to slide 11, he
pointed out that parents are moving to part time employment or
leaving work altogether. In other words, child care issues
affect parents' employment. He pointed out on slide 12 a case
study in Missouri where the state has introduced new programs
with tax credits which would go directly to employers and the
child care industry.
MR. ROBBINS moved to slide 13, pointing out the case study in
North Dakota which looks at a solution to the child care issue
by addressing affordability, availability, and quality. He said
North Dakota has already spent over $70 million on the program.
Recapping the solution in the proposed legislation, he said the
number of families who are eligible for child care subsidies
under the Child Care Assistance Program (CCAP) would be
expanded, making child care more affordable, which would help
parents return to the workforce.
3:14:19 PM
MR. ROBBINS proceeded to the sectional analysis on HB 89 [copy
included in the committee packet], which read as follows
[original punctuation provided]:
Section 1: Amends AS 47.25.001(a)[2] to increase the
maximum income threshold for state subsidies for child
care to 300% of federal poverty line for the state.
Section 2: Amends AS 47.25.071(c) to calculate the
true cost of providing child care in the state of
Alaska, and allows the grant program to fund
disbursements to beneficiaries at that amount.
Section 3: Adds a new section to make a conforming
change to the federal reporting provisions for the
child care assistance program.
Section 4: This is a conditional clause that gives the
United States Department of Health and Human Services
the authority to approve additional amendments to the
state plan for day care assistance or determine that
those amendments are not necessary.
Section 5: This is an effective date clause setting
the effective date on the day after the date the
United States Department of Health and Human Services
approves the corresponding amendment to the state plan
or determines that approval is not necessary.
3:16:14 PM
BLUE SHIBLER, Executive Director, Southeast Alaska Association
of the Education of Young Children (AEYC), expressed gratitude
for HB 89 and offered her support. She shared that AEYC is a
nonprofit organization which provides child care referral
services throughout Southeast Alaska. She shared that she is a
former owner of a child care center. She stated that throughout
her career she has engaged with families and watched parents
struggle to afford child care. The families who receive child
care assistance often cannot afford to pay the difference
between the subsidy and the actual tuition fee. She expressed
the belief that the proposed legislation would help close this
gap and allow more families access to quality child care in
Alaska. She expressed the concern that wages for child care
workers should also be addressed, otherwise the state is
expanding access to a system which is "about to crumble." In
addition to being the director of AEYC, she stated that she also
represents a coalition of healthcare providers and parents. She
stated that this group has recommended the funds from CCAP be
used directly for wage stipends. She expressed the opinion that
increasing access to child care for families should be done at
the same time as increasing pay for child care providers.
3:19:18 PM
JEN GRIFFIS, Public Policy Manager, thread, voiced support for
HB 89. She stated that thread is a statewide nonprofit which
provides professional development for child care providers,
supports programs, and helps connect parents to resources. She
stated that finding affordable child care is becoming more
difficult because early educators are leaving the workforce and
child care programs are closing. She expressed the opinion that
the unavailability of child care is having an impact on the
workforce and economy. She stated that historically the gap
between availability and need for child care in Alaska has been
around 25 percent. Various programs and communities have
reported declines in enrolment capacity to 40-60 percent, and
this is attributed to workforce shortages in child care. She
stated that federal stabilization funds provided during the
COVID-19 pandemic helped support child care providers, but the
third and final phase of funds have just been distributed. Data
on the impact of the second phase of funds has been gathered and
will be shared within the coming weeks. The preliminary
analysis of the data demonstrates that the $50 million in
stabilization funds, which went directly to child care providers
and programs, helped keep some businesses open.
MS. GRIFFIS continued that thread is advocating for direct
support to early educators and child care programs in the
upcoming fiscal year, but she argued that a more stable child
care sector would require a shift in current assistance program
policies. She stated that the proposed legislation would change
the eligibility for CCAP, allowing more families to participate,
and it would change how provider reimbursements are determined,
providing for a more stable child care system.
MS. GRIFFIS stated that while thread supports the intentions
behind HB 89, it has three recommendations to strengthen the
proposed legislation. The first suggested recommendation would
be to require the usage of the state's median income, as opposed
to the federal poverty limit, in any eligibility changes to the
CCAP. She said this consistency would help with program
continuity. Per thread's second recommendation, she said, the
cost-of-care language should be located in the portion of the
statute which impacts the entire assistance program, not just
the Child Care Grant Program. The final recommendation would be
to include cost-of-care language in the reimbursement
determination modeling, but it should not be the exclusive
measure. She indicated that other states use a multifactor
analysis, including cost of care and other relevant geographical
and market rate factors. She concluded that thread would
advocate for policies which reduce child care costs for parents
and increase support for child care providers.
3:24:42 PM
MS. GRIFFIS, in response to Representative Saddler, repeated
thread's second recommendation. In response to a follow-up
question, she stated that child care assistance is the
reimbursement given to child care providers who serve families
participating in CCAP, while the Child Care Grant Program
provides direct support to child care providers.
3:25:55 PM
MS. GRIFFIS, in response to Representative Mina, voiced that the
factors in a cost-of-care analysis can vary for different
states. She reiterated that factors could include the
geography, market rate, and actual cost of care. In response to
a follow-up question, she stated that the current market rates
would need to be considered in the context of the different
communities.
3:27:11 PM
REPRESENTATIVE SUMNER pointed out the hard cap of 300 percent of
the poverty line and questioned whether a phase out could be
used instead. He surmised that a hard cap could create a
situation where an incremental wage increase could have a
negative value for those needing assistance for child care.
3:28:14 PM
REPRESENTATIVE COULOMBE responded that [a phase out] was
discussed and considered. She stated that the proposed
legislation is a working document and expressed appreciation for
the input from testifiers. She deferred the question to DOH.
3:29:08 PM
HEATHER CARPENTER, Health Care Policy Advisor, Office of the
Commissioner, Department of Health, concerning HB 89, stated
that participants in public assistance programs could be
disincentivized to advance in the workplace by a "fiscal cliff."
She stated that the legislature would ultimately decide which
policy levers could be used to help families. She reminded the
committee that the programs under consideration are [the Child
Care Grant Program and CCAP]. She stated that the Child Care
Grant Program pays providers directly for costs to "keep their
doors open and hire staff," and CCAP is a subsidy paid by the
state to help families directly with monthly child care fees.
Because the federal government does not allow the fee to be
completely waived, every parent has a copay, and if wages go up,
the copay will increase. She suggested that raising the
eligibility standards to 300 percent of the federal poverty
level, as the legislation proposes, would help families.
Whether eligibility is based on the state median income or
federal poverty levels, the state would pay on both; however,
she advised "it would sure be easier if they were all on one."
Ms. Carpenter said other policy levers would include reducing
family copays and raising reimbursement rates paid directly to
providers. She explained that the rate is set currently by a
market survey, which is set by the federal government, and this
methodology has to be followed. She advised that the federal
government would have to give permission for this to be changed.
3:32:40 PM
REPRESENTATIVE RUFFRIDGE expressed the appreciation that the
proposed legislation is a working document. He referenced the
presentation and questioned the statement on slide 8 which
conveyed that DOH would scale the subsidy levels based on need.
He commented that DOH is doing this now through copays. He
questioned whether this would stay the same under HB 89.
MS. CARPENTER responded that the question partly addresses the
reason the fiscal note is indeterminate for the proposed
legislation. She said DOH is waiting for direction from the
legislature before reducing the current scale. She explained
that currently an individual earning up to 85 percent of the
state's median income has to pay a 9 percent copay. She
suggested that DOH could continue on this scale, or the proposed
legislation could make a change. She added that any change to
this would require a regulation change.
REPRESENTATIVE RUFFRIDGE referenced the proposed legislation's
current form and, for clarification, stated that as a person's
earnings nears the threshold of $64,144, the maximum copay would
be 9 percent, unless something is changed.
MS. CARPENTER responded that DOH would like guidance on this
issue.
3:35:14 PM
REPRESENTATIVE FIELDS offered his support for the proposed
legislation. He questioned whether language addressing the
wages [for care providers] should be added, as it would address
the stability of the workforce in addition to access [to child
care].
MS. CARPENTER responded that this would "get tricky." She
stated that the department would pay child care assistance to
private providers, but it could not direct how the money is
spent. The assumption is, if providers are paid more, they
would increase pay rates, but this is not a guarantee.
3:36:35 PM
REPRESENTATIVE SADDLER questioned the definitions of child care,
Head Start, and preschool. He also questioned the definition of
"high-quality child care."
3:37:27 PM
MS. GRIFFIS responded that to build kindergarten-readiness
skills for children under the age of five, the settings in
Alaska would be licensed child care programs, Head Start, and
pre-kindergarten. She stated that licensed child care falls
under DOH, while Head Start and pre-kindergarten fall under the
Department of Education and Early Development. These components
together form the system. In response to a follow-up question,
she explained that Head Start is a federally funded program.
She stated that she could provide specific information on the
program [after the hearing]. She stated that pre-kindergarten
in Alaska is publicly funded education through the school
districts. She continued that licensed child care is outside of
the other two settings. The licensing would be done through the
state, but the setting would have more flexibility. For
example, pre-kindergarten would occur during school hours for
half a day, with the summers off, and this does not always fit
with a family's schedule. She explained that, because needs are
different, thread advocates for a mixed delivery system to make
sure a variety of options are available.
REPRESENTATIVE SADDLER confirmed that [licensed] child care
would be characterized by flexibility in hours. He questioned
whether an educational element of child care exists.
MS. GRIFFIS responded that high-quality child care centers would
have elements of pre-kindergarten and Head Start. The
distinction for high-quality child care is the licensure,
regulations, and funding. She stated that high-quality child
care programs would have the same type of education and
structure as pre-kindergarten.
REPRESENTATIVE SADDLER expressed the understanding that "high
quality" does not imply a difference in quality; it simply is a
matter of how the center is regulated, funded, and licensed. He
questioned whether low-quality child care exists.
MS. GRIFFIS responded that unlicensed child care would be
considered low quality. In regard to affordability,
accessibility, and quality, she said the desire is to have
affordable access to high-quality child care. She offered to
follow up with more information on Alaska's Quality Recognition
and Improvement System (QRIS). She said the rating system has
five levels, with defined quality measures for each level, and
QRIS training, support, and assistance is available for
programs.
3:43:54 PM
REPRESENTATIVE FIELDS commented that some states pay for
quality. He voiced the opinion that the legislature could
support the department by making direct payments or
reimbursements to providers who achieve higher levels of
training and certification.
3:44:33 PM
REPRESENTATIVE RUFFRIDGE commented that the proposed legislation
addresses recalculating the actual cost of child care. He
expressed the assumption that this would entail a study and
questioned the timeframe for this type of study.
MS. CARPENTER responded that the department intends to do a
market rate survey alongside a cost-of-care survey, with an
added actuarial study. She stated that the department is
starting the procurement process in order to have information
for the next legislative session.
3:45:42 PM
MS. CARPENTER, in response to Chair Prax, offered to provide
details in writing on the studies. She added that some of the
COVID-19 relief money can be used for the studies. In response
to a follow-up question, she expressed the hope that the plan
would be before the committee by the end of the week.
3:47:10 PM
REPRESENTATIVE SADDLER, referencing the presentation, sited that
the number of child care workers has decreased by 20 percent
since 2018. He questioned whether this reduction corresponds to
the same rate of decline in the total workforce in the state.
MS. CARPENTER responded that the department does not have this
data. She stated that DOH has been working with the Department
of Labor and Workforce Development (DLWD) on demographics
concerning who could be served by the proposed legislation. She
stated that the answer would come best from DLWD.
3:48:20 PM
CHAIR PRAX announced that HB 89 was held over.