HB 46-CHILD CARE PROVIDER COLLECTIVE BARGAINING  4:08:22 PM CHAIR SUMNER announced that the final order of business would be HB 46, "An Act allowing child care providers that receive state aid to organize and collectively bargain with the Department of Health; and establishing the child care provider fund." 4:08:32 PM REPRESENTATIVE FIELDS, as prime sponsor, gave a PowerPoint presentation, titled "Raising Wages and Benefits for Child Care Workers (HB 46)" [hard copy included in the committee packet]. He provided a brief history of HB 46. Moving to slide 2, he stated that the problem is that the child care sector has low wages and few benefits, and this has resulted in a shortage of workers. He added that the COVID-19 pandemic has increased the shortage of adequate child care. REPRESENTATIVE FIELDS directed attention to slide 3, which showed a report which related that employment in the child care sector has decreased by 7 percent. On slide 4, he highlighted a report which shows that 2 more child care centers have closed in Juneau, while there are none in Valdez. 4:12:12 PM REPRESENTATIVE FIELDS advanced to slide 5, expressing the belief that the inadequate amount of child care in Alaska is playing a part in the outmigration from the state. He added that 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 collective bargaining for child care employees. REPRESENTATIVE FIELDS directed attention to slide 7, stating that the goals of HB 46 are to give these workers a "living wage" in order to increase the supply of child care. He advised that many families cannot afford to pay more for child care, so this should be done without increasing prices. He added that public policy on child care 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, pointing out that major Alaska employers are raising concerns about the lack of adequate child care in Alaska, and child care is one of the top three issues for the Alaska Chamber of Commerce. REPRESENTATIVE FIELDS concluded by explaining how the proposed legislation would work. He explained that the Alaska Department of Labor and Workforce Development would conduct an election which would ask whether child care workers would engage in sectoral bargaining with the state. If it is voted affirmatively, a union would be created to negotiate with the state for wages and benefits. He added that the bill would also establish a child care trust fund. 4:17:37 PM BLUE SHIBLER, Executive Director, Southeast Alaska Association for the Education of Young Children, provided invited testimony on HB 46. She expressed the opinion that there have always been issues with child care shortages. She explained that this is because child care centers do not have "a very good business model." These centers have a single source of revenue, with the charge being limited to what families can pay. She suggested that, prior to the COVID-19 pandemic, it was possible to find employees who would do the work because they enjoyed it; however, rising costs of living have forced a choice between having an enjoyable job or a higher-paying job. She pointed out that Juneau's child care centers have the capacity to care for more children, but there are not enough employees to increase enrollment. She described the current business model for child care as a "market failure," and she described child care as a "public good." She asserted that the solution would be investment by the state into the child care sector. 4:21:22 PM REPRESENTATIVE PRAX inquired about the organizations that Southeast Alaska Association for the Education of Young Children represents. MS. SHIBLER explained that the association provides support mechanisms rather than representation. In response to a follow- up question, she said that the majority of the money child care centers receive is from the parents' tuition. She added that there are subsidies available for families with lower incomes. 4:23:39 PM REPRESENTATIVE RUFFRIDGE requested an explanation of the label "market failure" concerning child care centers. MS. SHIBLER responded that, as a business, no profit is being made and a worthy wage is not provided. She contrasted this with a traditional business where goods or service costs could be raised to close the gap; however, child care businesses cannot do this because parents would not be able to pay. 4:25:55 PM REPRESENTATIVE RUFFRIDGE questioned whether a state subsidy would be the only way for these businesses to survive. He questioned where the state would receive an "injection of cash" for this purpose. MS. SHIBLER answered that child care 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 business costs, whereas child care centers are unable to do this because it becomes unaffordable for families. She concluded that the lack of ability to make a profit means fewer people attempt to start this business. In response to a follow-up question, she expressed the belief that the child care sector needs subsidies to remain operational. She observed that the issue is being acknowledged in other states and at the national level. 4:27:31 PM MS. SHIBLER, in response to a series of questions from Representative Saddler, answered that, in her 20 years of experience, the issue of low profits and wages has been an ongoing problem, and the increase in the cost of living has exacerbated the problem. In response to a follow-up question, she said that child care prices are generally similar across the sector and largely paid for by the parents. She answered that the Department of Health (DOH) receives block grants from the federal government and is responsible for deciding on the best usage of this money in regard to child care. She continued that the federal money used in the Childcare Assistance Subsidy Program pays providers on behalf of parents who qualify for assistance. Other money is used for training purposes; however, federal money does not cover increasing wages or benefits for workers. She expressed uncertainty concerning the amount of federal money going towards wages. 4:32:29 PM PEARL BROWER, PhD, CEO, Ukpeagvik Inupiat Corporation (UIC), provided invited testimony on HB 46. She stated that workplaces across the state are facing shortages, and this has made it more difficult for parents to return to work. She said that one of the reasons her family moved from Utqiagvik to Anchorage was because of the difficulty finding child care. She continued that the lack of available child care causes economic instability for families, leaves children at a higher risk of neglect, and makes it difficult for employers to fill available positions. 4:36:28 PM DR. BROWER, in response to Representative Prax, stated that UIC is a for-profit organization. In response to a follow-up question, she said that even if the corporation were to provide child care benefits to employees, there would not be enough child care providers to care for every child. REPRESENTATIVE PRAX suggested that the solution may require an increase in the cost of child care, either paid for by the state or by private employers. 4:39:03 PM CHRISTINA EUBANKS, Executive Director, Hillcrest Children's Center, provided invited testimony on HB 46. She stated that finding employees has been a continuous issue in her 20 years of working in child care. She suggested that this is one of the lowest paying professions in the state, which causes a high level of turnover. She expressed the belief that the industry should have a voice in how federal grants for child care are being spent. She argued this because of the direct impact on the operations and cost of child care centers. 4:41:49 PM REPRESENTATIVE PRAX questioned why prices have not increased. MS. EUBANKS responded that nothing is preventing price increases and explained that prices have already increased. She stated that there is an expected price increase of 6 percent to 10 percent this year, and this has the consequences of child care only being affordable for parents with high incomes. 4:42:47 PM MS. EUBANKS, in response to Representative Saddler, reiterated that raising prices would make child care 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, addressing earlier questions, added that not investing in child care would create an environment where only high-income families would be able to afford it. He deduced that this results in a decrease in economic capacity because families are pushed out of the workforce. He reiterated that the proposed bill would create a child care trust fund to allow the state to invest more in child care, similar to other places in the world. 4:49:06 PM REPRESENTATIVE SADDLER questioned the role DOH would play in collective bargaining. He questioned who would provide the funding. REPRESENTATIVE FIELDS said the model would be similar to the Alaska Higher Education Investment Fund. He continued that subsidized slots do not cover the entire cost of tuition at a child care center; therefore, child care centers pass the cost to the parents who can pay. REPRESENTATIVE SADDLER asked for a breakdown of the costs of child care paid for by families and the grants from the federal government. REPRESENTATIVE FIELDS, referencing the child care center his family uses, stated that subsidized slots are available, meaning the state pays for the child care of children whose parents qualify. He added that some states have expanded the level for eligibility for subsidies, and this helps provide child care for a wider range of families; therefore, the number of people able to work increases. 4:52:42 PM REPRESENTATIVE PRAX expressed concern that the proposed bill would result in a continuously expanding eligibility for the subsidy. He compared it to the current issues facing Medicare. 4:54:16 PM REPRESENTATIVE CARRICK questioned whether home-based child care providers would be covered by the proposed 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 child care workers. 4:55:59 PM REPRESENTATIVE RUFFRIDGE questioned whether HB 46 could cause prices to increase for some parents if the subsidy is not expanded. REPRESENTATIVE FIELDS answered that the goal is to keep prices down for parents. He expressed the belief that child care providers should be a greater part of the discussion because they have the best idea of how to serve families. He stated that the bill would create a framework giving providers a greater voice, as it would not be a mandate on a certain wage for child care employees. In response to a follow-up question, he stated that currently there is not a specific amount to be placed into the child care trust fund that HB 46 would create. 4:59:06 PM REPRESENTATIVE SADDLER questioned the amount of childcare paid for privately versus the amount paid for by the government. REPRESENTATIVE FIELDS recapped that the vast majority is paid for privately by parents, with some slots subsidized with government funds. In response to a follow-up question, he stated that the idea behind the trust fund would be to give child care providers a greater say in how the federal grants would be used. He reiterated the opinion that providers have a better idea what would be most effective. 5:01:07 PM REPRESENTATIVE WRIGHT questioned the amount of money received from the federal grants per year. REPRESENTATIVE FIELDS expressed uncertainty and offered to follow up with the committee at a later time. REPRESENTATIVE WRIGHT explained the Worthy Wage Campaign and asked whether the bill was related to this. REPRESENTATIVE FIELDS answered that he is unfamiliar with the campaign. [HB 46 was held over.]