Alaska lawmakers pass child care legislation to buoy sector ‘in crisis’

About a dozen preschoolers played in the snowmelt in the yard of Hillcrest Children’s Center in Anchorage this April. Most were zipped into heavy duty outerwear against the spring chill. All of them were splattered with dirt.

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

Caring for kids costs money. Eubanks had popped out into the yard after reviewing the budget the center’s board had voted on the night before. The balance sheet is riddled with negative numbers, but Hillcrest will be in the black this year. That is only possible because of nearly $200,000 in grants from federal pandemic aid that the organization used to offset tuition costs. “That is not expected in the year coming forward,” Eubanks said.

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

“So we’re hoping that will be enough to balance out this year’s budget. It would be great if there was some funding to go into next year’s,” Eubanks said.

Hillcrest had to increase what it paid workers just to be competitive with unemployment benefits during the pandemic. Eubanks said she knows the child care center’s costs are reaching the limit of what families can afford, but the parent-run board still voted to increase its monthly rates to up to $1,850 to keep up with the cost of operation.

It is in these tenuous conditions that Alaska lawmakers passed the child care legislation. The proposed law expands eligibility for families to get financial assistance for child care, offers tax incentives for companies 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 its rates.

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

Stephanie Berglund, the leader of a nonprofit resource and referral center for child care in the state, hailed the achievement. “This is a landmark milestone for Alaska,” she said. “What’s significant is recognizing the importance and value of working families, and the need for our state to be investing in critical child care support.”

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

“This legislation is just one piece of what’s needed. Child care is still very much in crisis in Alaska,” she said.

It doesn’t fix everything

Rep. Julie Coulombe, R-Anchorage, sponsored the legislation, which began as House Bill 89 — and she is the first to admit that it is not a complete solution. “HB 89 doesn’t fix everything. But it’s a start,” she said. “I think it just brings 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 there was celebration of the bill at its meeting this week because the changes come directly from work with state staff and care center operators from around the state.

The piece she is most excited about is the public private partnership that offers tax credits to businesses that make payments or contributions for child care and child care facilities. “In my opinion, that’s what’s going to move the needle the most, because that’s right where people are working, that’s their employers. That’s going to have a really big impact.”

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

He also stressed the need to expand child care. “It’s not enough to stabilize a sector; the sector has grossly inadequate capacity right now,” he said. So, he too has his eye on tax credits.

“The biggest question is, what is the uptake on these tax credits to expand care?” he said. “The best thing that could happen would be a bunch of companies invest in new child care facilities.”

The tax credit is the reason Kati Capozzi, president of the Alaska Chamber, was one of the bill’s most active advocates. She said it is a priority for the businesses that are her organization’s members, an indication that the businesses that pay taxes in the state would use the incentive.

“They took a look at it, saw the tax credits that are available and encouraged the chamber to support the bill, presumably because they plan on using the tax credits that are included in it,” she said.

Data shows unaffordable or unavailable child care affects Alaska’s workforce. Seventy-seven percent of Alaska parents reported missing work because of child care challenges in one study.

‘Hail Mary’

The milestone legislation did not succeed as a standalone bill. Instead lawmakers slipped it into a much larger bill at the 11th hour of the legislative session. Coulombe described it as “kind of a Hail Mary,” but said she doesn’t mind what form it takes as long as it serves its purpose.

After passage by the House, HB 89 got hung up in the Senate Finance Committee. Sen. Cathy Giessel, R-Anchorage, tried to put the bill’s language in a bill that dealt with Medicaid in schools, but that proposal didn’t get enough votes. So Fields asked Coulombe for permission to add it as an amendment to a popular board extension bill. “It’s the last day, and I got nothing to lose. So let’s just try it,” Coulombe recalled saying. It passed easily in the House and the Senate concurred just before gaveling out for the year at about a quarter midnight.

Fields called the amendment’s passage a “miracle,” but there is another hurdle before the bill becomes law. The popular bill that was such a successful vehicle for HB 89 was also a successful vehicle for a wide-ranging array of other bills. The practice of adding legislation as amendments to bills likely to pass, known as “bill stuffing,” is common and widespread, but this particular instance may have stretched the limits of what is allowed. Lawmakers are restricted to keeping the amendments to a single subject. The measure, Senate Bill 189, now ranges from board extensions to child care to big game permitting and marijuana taxes.

“The governor has always said he supported HB 89,” the original bill, Coulombe said, but added that she is sure the administration is going to give it a close look.

Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.