HB 46-CHILD CARE PROVIDER COLLECTIVE BARGAINING  4:08:22 PM CHAIR SUMNER announced that the final order of business would be HB 46, "CHILD CARE PROVIDER COLLECTIVE BARGAINING." 4:08:32 PM REPRESENTATIVE FIELDS, as prime sponsor, gave a brief history on the background for the bill. On slide 2, he stated that the problem in the childcare field is low wages and benefits leading to a shortage of childcare workers, adding that the COVID-19 pandemic has increased the shortage of adequate childcare. REPRESENTATIVE FIELDS directed attention to slide 3, highlighting a report that employment in childcare has decreased by 7 percent, contrasting with the number of people who want to return to work following the pandemic. On slide 4, he highlighted a report that 2 more childcare centers in Juneau, Alaska, have closed, and there are none in Valdez, Alaska. 4:12:12 PM REPRESENTATIVE FIELDS advanced to slide 5, stating that he believes that the inadequate amount of childcare in Alaska is playing a part in the issue of outmigration from the state. The greatest number of people leaving the state are young people of working age. He turned to slide 6, stating that 11 other states have implemented some form of childcare employee collective bargaining. REPRESENTATIVE FIELDS directed attention to slide 7, stating that the goals of HB 46 are to give childcare workers a "living wage" in order to increase the supply of childcare. He said that it should be done in a way that keeps the prices from increasing, as many families cannot afford to pay more for childcare. He added that public policy on childcare should remain "flexible" to allow the sector to continue to work with the state government on the best possible solutions. 4:14:36 PM REPRESENTATIVE FIELDS continued to slide 8 and stated that major Alaska employers are raising their concerns about the lack of adequate childcare in Alaska. Childcare was one of the top three issues that the Alaska Chamber of Commerce heard from its member employers. REPRESENTATIVE FIELDS concluded by explaining how the bill works. He said that if the bill were passed, the Alaska Department of Labor and Workforce Development would conduct an election asking all childcare workers if they wished to engage in sectoral bargaining with the state. If they were to vote affirmatively, they would create or join a union to negotiate with the state for wages and benefits. He added that the bill would also establish a childcare trust fund. 4:17:37 PM BLUE SHIBLER, Executive Director, Southeast Alaska Association for the Education of Young Children, stated that there have always been issues with childcare shortages due to childcare "not being a very good business model." The cause of this is that childcare centers have only a single source of revenue, and they can only charge so much before families cannot afford it. She said that prior to the pandemic, it was possible to find childcare employees that would do the work because they enjoyed it, but rising costs of living are causing more people to face a choice between having a job they enjoy and having a job that pays more. All of Juneau's childcare centers have the capacity to care for more children, but do not have enough employees to increase enrollment. She described the current business model for childcare as a "market failure" and childcare as a "public good" and asserted that the solution would be state government investment into the childcare sector. 4:21:22 PM REPRESENTATIVE PRAX inquired about the organizations that Ms. Shibler's organization represents. MS. SHIBLER explained that the Southeast Alaska Association for the Education of Young Children provides different support mechanisms to childcare providers rather than representing them. In response to a follow up question, she said that the majority of the money going to childcare centers is from the parents paying tuition, although there are subsidies available for those with lower incomes. 4:23:39 PM REPRESENTATIVE RUFFRIDGE asked for an explanation of Ms. Shibler's meaning when she labeled the lack of childcare as a "market failure." MS. SHIBLER explained that as a business, no profit is made and a worthy wage is not provided. She contrasted that with a traditional business in which goods or service costs could be raised to close the gap; however, childcare business cannot do that because parents can't pay. 4:25:55 PM REPRESENTATIVE RUFFRIDGE sought to confirm that a state subsidy would be the only way for businesses to survive. He asked where the state would receive an injection of cash for that purpose. MS. SHIBLER answered that childcare centers are unable to pay high wages or make a profit. In other businesses, it is possible to raise the prices to reflect a rise in costs to the business, whereas childcare centers are unable to because it would become unaffordable for families. She concluded that the lack of ability to make a profit means fewer people attempting to start a childcare center as a business. In response to a follow-up question, she said that she believes that the childcare sector needs subsidies to remain operational, and she observed that the issue of lacking childcare is being acknowledged in other states and at the national level. 4:27:31 PM REPRESENTATIVE SADDLER asked if the issue of low profits and wages in childcare is a new or existing problem. MS. SHIBLER answered that it has been an ongoing problem in her 20 years of experience working in childcare. The increase in the cost of living has exacerbated the problem. In response to a follow-up question, she said that childcare prices are generally similar across the sector and largely paid for by the parents. REPRESENTATIVE SADDLER asked what role the state Department of Health would play in funding childcare. MS. SHIBLER said the Department of Health receives block grants from the federal government and is responsible for deciding on the best usage of that money in regard to childcare. REPRESENTATIVE SADDLER inquired about the percentage of the cost that the federal government is taking on for childcare in Alaska. MS. SHIBLER answered that the federal money used in the Childcare Assistance Subsidy Program pays childcare providers on behalf of parents that qualify for assistance. Other money is used for training purposes, but the federal money is not able to be used for increasing wages or benefits for childcare workers. She concluded that she was unsure of the amount of money from the federal grants contributed towards wages. 4:32:29 PM PEARL BROWER, PhD, CEO, Ukpeagvik Inupiat Corporation (UIC), stated that workplaces across the state are facing shortages, and a lack of childcare is making it more difficult for people to return to work. She said that one of the reasons her family moved from Utqiagvik, Alaska, to Anchorage was because of the difficulty finding childcare in Utqiagvik. She continued that the lack of childcare availability causes economic instability for families, leaves children at a higher risk of neglect, and makes it difficult for employers to fill all of their available positions. 4:36:28 PM REPRESENTATIVE PRAX asked whether UIC is a for-profit organization. DR. BROWER answered that it is. In response to a follow-up, she said that even if the corporation were to provide childcare benefits to employees, there would not be enough childcare providers to care for every child. REPRESENTATIVE PRAX suggested that the solution may require an increase in the cost of childcare, either paid for by the state or by private employers as a benefit to their employees. 4:39:03 PM CHRISTINA EUBANKS, Executive Director, Hillcrest Children's Center, stated that finding employees has been a continuous issue in her 20 years working in childcare. Childcare is one of the lowest paying professions in the state, causing high levels of turnover. She said that she believes it is important for the industry to have a voice in how the money from federal grants for childcare is being spent due to that having a direct impact on the operations and cost of childcare centers. 4:41:49 PM REPRESENTATIVE PRAX asked what is preventing childcare centers from raising their prices. MS. EUBANKS explained that nothing is preventing price increases, and that prices have already increased. There is an expected price increase of 6-10 percent this year. She said that the consequences of this is that childcare is becoming affordable only to parents with high incomes. 4:42:47 PM REPRESENTATIVE SADDLER asked why the providers do not raise prices to allow them to pay higher wages. MS. EUBANKS emphasized that raising prices would make childcare unaffordable for many families. 4:44:44 PM EVAN ANDERSON, Staff, Representative Zack Fields, Alaska State Legislature, on behalf of Representative Fields, prime sponsor, provided a sectional analysis of HB 46 [included in the committee packet], which read as follows [original punctuation provided]: Section l: This section amends AS 23.05.360(t) to allow the Alaska Labor Relations Agency board in the Department of Labor & Workforce Development the authority to include workers in the child care sector for the purpose of holding hearings. This is a conforming change to language added in Sec 4. Section 2: This section amends AS 23.05.370(a) to direct the Alaska Labor Relations Agency to serve as labor relations agency for workers in the child care sector covered by the new language added in Sec. 4. Section 3: This section amends AS 23.05.380 to give Department of Labor & Workforce Development the authority to update regulations pertaining to collective bargaining rights for workers in the child care sector. This is a confonning [sic] change to language added in Sec 4. Section 4: This section amends AS 23.40 to give child care providers the right to self-organize, join, or assist an organization to bargain collectively and engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection. This section prohibits the Department of Health from engaging in unfair labor practices, and it provides a process for investigation and conciliation of complaints. This section also provides definitions. Section 5: This section establishes a child care provider fund as a separate fund in the state treasury. This section also establishes a child care stakeholder group to recommend disbursements from the fund. 4:47:07 PM REPRESENTATIVE FIELDS addressed earlier questions from Representative Saddler and Representative Prax, adding to the previous answers that not investing in childcare would create an environment in which only those with high incomes would be able to afford childcare. The result is that people are pushed out of the workforce and economic capacity decreases. He reiterated that the bill would create a childcare trust fund to allow the State of Alaska to invest more in childcare as other places in the world do. 4:49:06 PM REPRESENTATIVE SADDLER asked what role the Department of Health would play in collective bargaining and who would end up paying for it. REPRESENTATIVE FIELDS said the model was similar to the higher education trust fund. He continued that subsidized slots do not cover the entire cost of tuition at a childcare center and childcare centers end up passing that cost on to the other parents who can pay. REPRESENTATIVE SADDLER asked for a breakdown of the costs of childcare paid for by families and the grants from the federal government. REPRESENTATIVE FIELDS explained that at the childcare centers his family uses, subsidized slots are available, meaning that the state pays for the childcare of children whose parents qualify. He added that some other states have expanded the levels for which parents can be eligible for childcare subsidies in order to make childcare more affordable for a wider range of families and therefore increase the number of people working. 4:52:42 PM REPRESENTATIVE PRAX expressed concern that the bill would result in continuously expanding eligibility for the subsidy, comparing it to the current issues facing Medicare. 4:54:16 PM REPRESENTATIVE CARRICK sought confirmation for whether home- based childcare providers would be covered by the bill. REPRESENTATIVE FIELDS answered that all licensed providers would be covered, including home-based providers. REPRESENTATIVE CARRICK commented that the bill could be useful in the effort to retain childcare workers. 4:55:59 PM REPRESENTATIVE RUFFRIDGE asked if it was possible for HB 46 to cause prices to increase for some parents if the subsidy was not expanded. REPRESENTATIVE FIELDS answered that the goal was to keep prices down for parents. He continued that his belief is that childcare providers should be a greater part of the discussion because they have the best idea of how to serve the families for which they provide childcare. The bill would create a framework to give childcare providers a greater voice rather than mandating a certain wage be paid to childcare employees. In response to a follow-up question, he stated that there is not currently a specific dollar amount to be placed into the childcare trust fund that would be created under HB 46. 4:59:06 PM REPRESENTATIVE SADDLER asked how much of childcare is paid for privately versus how much is paid for by the government. REPRESENTATIVE FIELDS recapped that the vast majority was paid for privately by parents, with some per-child subsidized slots paid for using government funds. In response to a follow-up question, he stated that the idea behind the trust fund was to give childcare providers a greater say in how the federal grants were used because they have a better idea of how those funds would be most effective. 5:01:07 PM REPRESENTATIVE WRIGHT asked what the amount of money received from the federal grant block is per year. REPRESENTATIVE FIELDS answered that he is unsure but would follow up with an answer at a later time. REPRESENTATIVE WRIGHT explained the "for the wage" campaign and asked whether the bill was related to it in any way. REPRESENTATIVE FIELDS answered that he is unfamiliar with the campaign. [HB 46 was held over.]