Alaska lawmakers pass child care legislation to support ‘crisis-hit’ sector

This April, a dozen preschoolers played in melted snow in the yard of Hillcrest Children’s Center in Anchorage. Most of them were buttoned up in durable outerwear to protect them from the spring chill. They were all covered in dirt.

“One of our values ​​is mud,” said Christina Eubanks, the center’s director, before an exuberant and unusually muddy child pulled her aside to tell her about her day and offer her some of the muffin that was part of her afternoon meal.

Childcare costs money. Eubanks went out into the yard after reviewing the budget the center’s board had voted on the night before. The balance sheet is full of negative numbers, but Hillcrest will be in the red this year. This is only possible thanks to nearly $200,000 in grants from federal pandemic aid that the organization used to cover tuition costs. “This is not expected in the coming year,” Eubanks said.

The state will distribute the last of its federal aid to child care centers this summer.

So we hope that this will be enough to balance this year’s budget. It would be great if there were some funds for next year’s edition,” said Eubanks.

Hillcrest had to increase employee wages to compete with unemployment benefits during the pandemic. Eubanks said she knows the child care center’s costs are reaching the limits of a family’s means, but the parent-led board voted anyway to raise monthly rates to $1,850 to keep up with operating costs.

It was in this uncertain environment that Alaska lawmakers passed child welfare laws. The proposed bill expands families’ eligibility to receive financial assistance for child care, offers tax incentives for businesses to invest in child care options, and gives the state the option to consider the actual cost of care rather than the market rate when setting rates.

Lawmakers separately included $7.5 million in the state budget for grants to support child care centers.

Stephanie Berglund, leader of the state’s nonprofit Child Care Resource and Reference Center, praised the achievement. “This is a milestone for Alaska,” she said. “It is important to recognize the importance and value of working families and the need for our state to invest in critical child care supports.”

She estimates the changes could double the number of Alaska families eligible for subsidies and child care assistance. But she said nearly a quarter of Alaska’s small child care businesses have closed since the pandemic, and her organization hasn’t seen new ones fill the gap. She cautioned that without a movement to support child care businesses and create new ones, there may not be enough programs for newly eligible families to apply for benefits.

“This legislation is just one of the pieces needed. “Child care in Alaska continues to be in a serious crisis,” she said.

This doesn’t fix everything

Rep. Julie Coulombe, R-Anchorage, sponsored the legislation that began as House Bill 89 – and was the first to admit it is not a complete solution. “HB 89 doesn’t fix everything. But this is a start,” she said. “I think it just gives a lot of people hope that maybe we can keep this momentum going.”

Coulombe serves on the Governor’s Child Care Task Force and said the bill was ceremoniously passed at its meeting this week because the changes are a direct result of working with state staff and child care center operators across the state.

What she’s most excited about is a public-private partnership project that offers tax breaks to businesses that make payments or contributions to childcare and childcare facilities. “That’s what I think will move the needle the most because that’s where people work, that’s their employer. This will have a really big impact.”

Another supporter of the bill, Rep. Zack Fields, D-Anchorage, said its language is based on legislative best practices from across the country that have proven successful in states with mixed or Republican-led legislatures. “It represented what was possible in Republican legislatures,” he said.

He also emphasized the need to expand child care. “It is not enough to stabilize the sector; this sector does not currently have grossly insufficient production capacity,” he said. So he also has his eye on tax breaks.

“The big question is: What is the use of these tax credits to expand care?” he said. “The best thing that could happen would be for a group of companies to invest in new childcare facilities.”

The tax break is why Kati Capozzi, Speaker of the Alaska House, has been one of the bill’s most active supporters. She said this is a priority for her organization’s member businesses, indicating that the incentive will benefit businesses that pay taxes in the state.

“They looked at it, looked at the tax breaks available and encouraged the House to support the bill, probably because they plan to take advantage of the tax breaks provided in it,” she said.

Data shows that unaffordable or unavailable child care is impacting Alaska’s workforce. In one study, seventy-seven percent of parents in Alaska reported missing work due to child care issues.

‘Hail Mary’

The key act was not successful as a stand-alone act. Instead, lawmakers lumped it into a much larger bill in the 11th hour of the legislative session. Coulombe described it as “a kind of Hail Mary”, but stated that it didn’t matter to her what form it took, as long as it served its purpose.

After passing the House, HB 89 was suspended in the Senate Finance Committee. Sen. Cathy Giessel of Anchorage tried to include the bill’s language in the school Medicaid bill, but the proposal did not receive enough votes. So Fields asked Coulombe for permission to add it as an amendment to the popular board extension bill. “It’s the last day and I have nothing to lose. So let’s try this,’” Coulombe recalled. It passed in the House without any problems, and the Senate agreed with it just before the results were announced for the year, around a quarter of midnight.

Fields called the amendment’s passage a “miracle,” but there is one more hurdle before the bill becomes law. The popular bill that was so successful with HB 89 was also an effective tool for a wide range of other bills. The practice of adding regulations as amendments to laws that are likely to be passed, known as “statutory stuffing,” is common and widespread, but in this particular case the boundaries of what is allowed may have been stretched. Legislators are limited to limiting amendments to one topic. That solution, Senate Bill 189, currently includes board extensions, child care, game licenses and marijuana taxes.

“The governor has always said he supports HB 89,” Coulombe said, but added she was confident the administration would take a close look at it.