HOUSE BILL REPORT

HB 2661

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Reported by House Committee On:

Human Services & Early Learning

Title: An act relating to expanding accessible, affordable child care and early childhood development programs.

Brief Description: Expanding accessible, affordable child care and early childhood development programs.

Sponsors: Representatives Senn, Chopp, Sullivan, Callan, Pettigrew, Mead, Davis, Appleton, Thai, Shewmake, Bergquist, Valdez, Walen, Goodman, Macri, Riccelli, Hudgins, Leavitt, Lekanoff, Pollet, Slatter, Kilduff, Dolan, Tarleton, Chapman, Stonier, Lovick, Robinson, Orwall, Gregerson, Ortiz-Self, Entenman, Fitzgibbon, Morgan, J. Johnson, Pellicciotti, Wylie, Peterson, Kirby, Duerr, DeBolt, Sells, Fey, Ryu, Doglio, Ramel, Ramos, Tharinger and Frame.

Brief History:

Committee Activity:

Human Services & Early Learning: 1/21/20, 1/28/20 [DPS].

Brief Summary of Substitute Bill

  • Increases eligibility for child care, early childhood development programs, and services for children and families.

  • Provides for increased rates, training, grants, and services for early learning providers.

  • Establishes new accounts and allowable fund uses.

HOUSE COMMITTEE ON HUMAN SERVICES & EARLY LEARNING

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 7 members: Representatives Senn, Chair; Callan, Vice Chair; Frame, Vice Chair; Goodman, Kilduff, Lovick and Ortiz-Self.

Minority Report: Do not pass. Signed by 6 members: Representatives Dent, Ranking Minority Member; Eslick, Assistant Ranking Minority Member; McCaslin, Assistant Ranking Minority Member; Corry, Griffey and Klippert.

Staff: Dawn Eychaner (786-7135).

Background:

Early Learning Advisory Council.

The Early Learning Advisory Council (ELAC) advises the Department of Children, Youth, and Families (DCYF) on statewide early learning issues. The ELAC membership includes representatives of state agencies, the Legislature, leaders in early childhood education, and other stakeholders.

Subsidized Child Care.

The Working Connections Child Care (WCCC) program offers subsidies to child care providers serving families with incomes at or below 200 percent of the federal poverty level (FPL). The state pays part of the cost of childcare when a parent is working or participating in approved work-related activities, with some exceptions. Depending on income, families may be required to pay a copayment to their provider. Families receive 12-month authorizations for the WCCC program.

The federal Administration of Children and Families advises states to set child care rates at the seventy-fifth percentile of the private market rate in order to ensure equal access for families with subsidized child care. Licensed family homes and child care centers are paid a full or half-day rate based on the age of the child, region, and setting.

Health Care for Providers.

Licensed family day care providers and license-exempt family, friend, and neighbor (FFN) providers who receive child care subsidies are represented by Service Employees International Union Local 925 for the purposes of collective bargaining with the state. The union bargains for subsidy rates, health benefits, and professional development opportunities. Providers are not required to join the union and do not pay dues unless they choose to join. The bargained agreement is subject to legislative approval. Child care centers are not covered under the agreement.

The state's Health Benefit Exchange (HBE) allows individuals to purchase health care coverage and compare health plans. Depending on income, coverage may be free through Medicaid, or the individual may qualify for a subsidized premium or a cost-sharing reduction that lowers the cost of certain medical services.

Early Childhood Education and Assistance Program.

The Early Childhood Education and Assistance Program (ECEAP) is the state's voluntary preschool program. Three and 4-year-olds from families with incomes at or below 110 percent of the FPL are eligible for the ECEAP. Children with special needs or certain risk factors are also eligible to enroll, regardless of income. As space allows, over-income children may also enroll. In the 2022-23 school year, the ECEAP will become an entitlement for any eligible child.

Child Care Cost Model.

The Department of Commerce (Commerce) administers the Child Care Collaborative Task Force (CCCTF). The CCCTF is developing a child care cost estimate model (CCCEM) to determine the full costs providers incur when providing high quality child care. The model must include regional differences, employee salaries and benefits, enrollment levels, facility costs, and costs associated with regulatory and statutory requirements including quality rating system participation. The CCCEM is due to the Governor and the Legislature by December 1, 2020, as part of a package of related findings and recommendations.

Early Learning Facilities Grants and Loans.

Commerce administers the Early Learning Facilities Grant and Loan Program (ELFGLP), funded in part by the Early Learning Facilities Revolving Account. The ELFGLP provides grants and loans to eligible organizations to plan, renovate, purchase, and construct early learning facilities. Eligible organizations include WCCC and ECEAP providers, developers of housing and community facilities, community and technical colleges, educational service districts, local governments, federally recognized tribes, and religiously affiliated entities.

Early Achievers and Provider Support.

The Early Achievers (EA) program is Washington's Quality Rating and Improvement System for child care and early learning. Participation in the EA program is mandatory for all providers serving non-school-age children, including ECEAP contractors, who accept state subsidy payments.

An objective of the EA program is to provide professional development and coaching opportunities to child care and early learning providers. Participants have access to training opportunities and education scholarships and grants to use towards bachelor degrees, associate degrees, and Early Childhood Education certificates. Each participant is assigned a coach who provides technical assistance and helps the participant prepare for the EA rating process.

Shared Services Hubs.

In December 2018, the DCYF received a federal Preschool Development Grant Birth through Five award of $5.3 million for planning and training activities related to integrating Washington's early learning system. In December 2019 the DCYF was awarded a three-year renewal grant of $34 million. Developing shared services hubs for child care and early learning providers is identified as an activity under the grant. Shared services hubs are to be designed for financial and administrative capacity building and comprehensive services for providers, including mental health consultation and other supports.

Mental Health Consultation.

In 2019 the Legislature required the DCYF to contract to hire one mental health consultant for each of the six agency-designated regions. The mental health consultants must provide support and guidance on challenging behaviors to EA program coaches and child care providers.

The Early Childhood Intervention and Prevention Services Program.

The DCYF administers the Early Childhood Intervention and Prevention Services (ECLIPSE) program. The ECLIPSE program is delivered by two community-based programs that provide therapeutic child care and other specialized treatment services to abused, neglected, and at-risk children birth through age 5. Priority for the ECLIPSE program is given to children referred by a child welfare worker.

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Summary of Substitute Bill:

The Fair Start for Kids Act is established for the stated purpose of aligning early learning services and programs into a high-quality continuum of care and education.

Accounts and Funding Allocations.

Fair Start for Kids Account.

The Fair Start for Kids Account (FSKA) is created effective July 1, 2022. The Legislature must consider recommendations for funding made by the Early Learning Advisory and Accountability Council (ELAAC) and must appropriate funds from the account for the following purposes:

Each year 5 percent of quarterly revenue must be transferred to the Early Learning Facilities Revolving Account.

Every two years $10 million must be transferred to the Early Learning Health Care Expansion Account (ELHCEA), with the stated intent to continue this funding until a health care funding plan for all child care providers is adopted.

Early Learning Health Care Expansion Account.

The ELHCEA is created effective July 1, 2022. Account expenditures may only be used to increase the number of family day care providers who receive health care benefits.

Beginning July 1, 2022, the HBE must collaborate with the DCYF to conduct an outreach campaign to early learning providers to raise awareness of and enroll providers in coverage offered through the Washington Health Plan Finder (WHPF). By June 30, 2024, the HBE and the DCYF must jointly report the results of the campaign and recommendations to the Legislature.

Early Learning Advisory and Accountability Council.

Effective July 1, 2022, the ELAC is renamed as the Early Learning Advisory and Accountability Council (ELAAC). Additional duties of the ELAAC include providing guidance and recommendations to the Governor and the Legislature on phasing in early learning spending priorities as system capacity is developed and to ensure accountability that the early learning investments funded with the FSKA are producing the intended results. Every five years the ELAAC must survey providers and families on early learning programs and policies developed under this act and incorporate results into ELAAC recommendations.

Membership of the former ELAC is adjusted to add representatives from Commerce, the Office of Financial Management, an educational service district, a private philanthropic organization, an infant mental health specialist, a statewide association representing business interests, a business offering employer-supported child care, a representative of the statewide child care resource and referral organization, an organization focused on promoting literacy, a representative from the Washington State Office of Equity, a representative from the Washington State Women's Commission, a representative of a statewide organization representing the interests of family day care providers, a representative of a professional development organization for child care providers, and a pediatrician or expert on children's health. Representatives of a local education agency and a public-private partnership focused on early learning are removed from the ELAAC.

Working Connections Child Care.

Beginning July 1, 2022, the DCYF may not raise a household's monthly WCCC program copayment during the household's 12-month authorization period.

Beginning July 1, 2022, and subject to funds appropriated, a household with a non-school age child may be eligible for the WCCC program when the household's annual income is at or below 85 percent of the state median income (SMI) and the household meets all other program eligibility requirements.

A household's monthly copayment must be calculated based on income as follows:

Income as a percent of the SMI

Copayment

At or below 36 percent

$0

Above 36 percent and at or below 50 percent

$15

Above 50 percent and at or below 65 percent

$150

Above 65 percent and at or below 85 percent

To be determined. The DCYF must develop a copayment model.

The requirement that a full time student of a community, technical, and tribal college who is pursuing vocational education be a single parent in order to be exempt from WCCC program work requirements is removed. A definition of "homeless" for purposes of the WCCC program is added.

The Early Childhood Education and Assistance Program.

Beginning July 1, 2026, a child entitled to enroll in the ECEAP is expanded to include a child who is experiencing homelessness or has participated in the Early Head Start, Early Support for Infants and Toddlers (ESIT), or the Birth-to-Three ECEAP Pilot Program. The income of an entitled child must be at or below 36 percent of the SMI rather than 110 percent of the FPL.

The income measure for children allowed to enroll in the ECEAP is changed from the FPL to the SMI, adjusted for household size. A child may enroll, as space is available, if the family's income is above 36 percent of the SMI but less than or equal to 55 percent of the SMI.

A child who is eligible for the ECEAP maintains his or her eligibility until starting kindergarten.

Early Learning Rates and Financial Models.

Early Learning Subsidy Rates.

Beginning July 1, 2022, and subject to funds appropriated:

The following rates must be adjusted annually for inflation, subject to funds appropriated:

Financial Models.

By October 1, 2021, the DCYF must develop and deliver to the Governor and the Legislature financial models for calculating:

Grants for Early Learning Facilities, Operations, and Programming.

Start-up Grants.

Commerce must award start-up grants from the ELFGLP to ECEAP and WCCC program providers. Start-up grants are limited to one grant per location per provider and must be used for one-time costs associated with a new site. Eligible uses of grant funds include purchase of equipment, supplies, dual language programming and other goods and services. Commerce must adopt rules for start-up grants and must consider using the CCCEM to inform grant parameters.

Local Government Infrastructure Grants.

The maximum grant or loan amount for major construction, renovation, or purchase of early learning facilities through the ELFGLP is increased from $800,000 to $1 million. In addition, the ELFGLP may provide grants of up to $1 million to local governments for public infrastructure improvements necessary to support these projects.

Early Childhood Equity Grants.

Subject to available funds, the DCYF must provide early childhood equity grants to support culturally and linguistically specific early learning, early childhood, and parent support programs. To be eligible for an equity grant, an applicant must be in good standing within the EA program. An eligible applicant may receive an equity grant once every two years. The DCYF must evaluate and rank applications in consultation with an advisory committee and submit a brief status report to the Governor and the Legislature each December in years after grants are awarded.

Technical Assistance for Employers.

Beginning July 1, 2022, and subject to funds appropriated, Commerce must provide or contract to provide technical assistance to employers interested in supporting their employees' access to high quality child care. Technical assistance may include guidance related to operating a licensed child care center at or near the work place for the benefit of employees, financing and construction of a child care center, providing financial assistance to employees for child care expenses, sponsoring dependent care flexible spending accounts for employees, and developing "bring your infant to work" programs and other family-friendly policies.

Provider Training and Support.

Training Grants for Early Learning Providers.

Beginning July 1, 2022, and subject to funds appropriated, the DCYF must administer training grants for early learning providers that support providers in reaching EA professional education and training standards. Training grants must be used to augment existing EA scholarships for required trainings for early learning providers, including license-exempt FFN providers, and may be distributed to eligible providers as supplemental training awards. Supplemental training awards may be used on subjects such as small business management, providing care for children with developmental disabilities, and other topics. Eligible providers are employees and owners of child care centers and family homes accepting state subsidy, ECEAP contractors and providers, and EA coaches.

Shared Services Hubs.

Beginning July 1, 2022, and subject to funds appropriated, the DCYF must provide one or more shared services hubs that allow pooling and shared use of services by child care centers and family home providers. Shared services hubs may provide three categories of services to include:

The DCYF must report to the Governor and the Legislature by December 1, 2025, on the effectiveness of the service hub model and make recommendations for improvements, changes, or expansion of the model.

Mental Health Consultation.

Beginning July 1, 2022, and subject to funds appropriated, the DCYF must provide mental health consultation services to early learning providers through shared services hubs. Consultation services must be delivered in coordination with existing mental health consultation for EA coaches and providers. The DCYF must provide supervisors for mental health consultants. As capacity allows, the DCYF may provide access to mental health consultation services for license-exempt FFN providers.

Early Interventions and Family Support.

Prenatal-to-Three Family Engagement Strategy.

Beginning July 1, 2022, and subject to funds appropriated, the DCYF must administer a prenatal-to-age-3 family engagement strategy to support expectant parents, babies and toddlers from birth to age 3, and parents and caregivers.

Components of the strategy must include supports and services to improve maternal and infant health outcomes, reduce and mitigate trauma, promote attachment and other social-emotional assets, strengthen parenting skills, and provide other early interventions.

Services and supports may include parent skill-based programs and training, facilitated play-and-learn groups, parent peer support groups, and other prenatal-to-age-3 programs and services.

Trauma and Complex Needs Programs.

Beginning July 1, 2022, and subject to funds appropriated, the DCYF must administer trauma and complex needs programs, such as the ECLIPSE program, and other early intervention services for children who are:

The DCYF must make an effort to deliver the trauma and complex needs programs and other early intervention services in areas of the state with the highest need and greatest local interest.

Miscellaneous.

Statutory content is reorganized, and conforming amendments are made.

Substitute Bill Compared to Original Bill:

The substitute bill:

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Appropriation: None.

Fiscal Note: Requested on January 29, 2020.

Effective Date of Substitute Bill: The bill contains multiple effective dates.

Staff Summary of Public Testimony:

(In support) Providers, families, and kids in child care and early learning are facing struggles across the state. The need for child care is a national issue, and child care is a broken market. This policy focuses on making child care more accessible and affordable for families. To expand child care, the workforce must be supported. With minimum wage increases and growing child care costs, businesses are closing. The state must invest in birth to age 3 services and infant and toddler care. More than half of children enter kindergarten already behind their peers. Employers find their employees lack access to child care and that hurts the economy. Families with young children fare best when provided with a continuum of support from birth to age 5. Early learning is the smartest investment the state can make in Washington's future. There is a child care crisis when the average cost of child care is more than the cost of college. Too many parents have to leave the workforce due to child care issues, costing the state's economy over $2 billion a year. Families are falling off the subsidy cliff, and providers are making poverty wages. Washington currently reimburses child care at the fifty-fifth percentile of the private market rate, resulting in centers that accept subsidy losing thousands of dollars every year and providers who are making poverty wages. Programs that help kids develop properly go a long way toward helping them be constructive members of society. Families are forced to choose between quality child care, transportation, health care, and food. A comprehensive early learning strategy is necessary to support the prosperity of businesses. Parents need consistent and quality care in order to work and bring their full attention to their jobs. A skilled and educated workforce requires children to be school-ready to learn skills necessary to enter the workforce. Funding is needed for facilities and to pay livable wages. The unintended consequence of the School Employees Benefits Board has led to significant financial constraints for school-district-operated ECEAPs, and some districts may not offer ECEAPs next year as a result. Foster parents struggle to find care for their foster children and newborns and face very limited choices. An infant recovering from trauma requires additional social-emotional support. The ESIT program helps parents understand how to improve their children's language development through play and helps children receiving early services to catch up with their peers. These programs change lives for children from birth to age 3, but some families do not even get screened for services before their child ages out of the program. Wait lists for child care for newborns can be up to three years long. Parents are forced to consider moving and changing jobs to address child care issues. It is difficult for families to find a provider who speaks Spanish, and bilingual parents struggle to find appropriate providers. Interacting with parents and kids in their home language helps parents be more confident in advocating for their children. Dual language teaching helps children have better academic outcomes and problem-solving skills without losing their identity and culture. Immigrant and refugee families must have equal access to early learning opportunities, and investing in dual and bilingual early learning programs is critical. Child care workers are leaving the industry and retiring without viable succession plans in place. Relatively low wages and lack of benefits is not helping to attract the next generation of child care professionals. Tools such as the Early Learning Facilities Grants and Loans greatly expand child care capacity. Increasing the subsidy rate to the seventy-fifth percentile is helpful for the future but more immediate investments in subsidy are necessary to prevent further closures of child care centers. Health care is an important benefit in supporting the workforce. The ECEAP is a proven high quality program that is a research-based investment that helps children enter kindergarten prepared and have postsecondary success in life. The Education Service Districts (ESDs) coordinate early learning partnerships around the state and offer a structure that can be used to expanding the system. The ESD provide a significant percent of the state's ECEAP programming. Steps are long overdue to address the threat of unaddressed trauma in children. Toxic stress associated with exposure to trauma affects brain development and threatens long-term well being as well as creating immediate challenging behaviors and the workforce is not equipped with the strategies needed to address these needs. Many ECEAP programs would like to serve more children; however, there are barriers in providing the ECEAP, including higher costs for teacher salaries and necessary facilities, and there is not more space to add classrooms. Children and families in the ECEAP are coping with so much more than poverty, including complex trauma, and the current slot rate does not cover those costs. Infant rooms have the lowest teacher-to-children ratios and have lengthy wait lists. Families with incomes too high for subsidized programs cannot afford to pay for private care. Costs are increasing for child care employers, and the demand for educated and qualified staff combined with the dearth of funding make the business unsustainable. About a third of children in child care are school age and need to be included in these policies. Making the child care system a child-centered system instead of a family-centered system could be very costly. Do not gut the education requirements for providers. Over 60 percent of kids under age 6 are in families where both parents work and these children spend an average of 33 hours per week in care while 90 percent of their brain development occurs before kindergarten. Families with incomes over 135 percent of the FPL are not using subsidy because the copays are too high. Child care staff are not passing background checks and cannot even afford to pay for background checks, let alone higher education. Only 1 percent of the state budget is spent on early learning. Only 45 percent of children who started school this fall were ready for kindergarten. If a child is eligible for free school lunch, they should qualify for the ECEAP, and raising the income level to qualify will accomplish this. Communities of color often do not receive the supports they need. When a provider accepts an infant on subsidy, that provider is losing hundreds of dollars a month. One of the top things families need besides child care and home visiting is help navigating through the tremendous stress of linkages. Connecting families with services they need is being tested in King County through the Help Me Grow model. Provider compensation is an issue of racial and gender equity. Child care providers are predominantly women and disproportionately women of color. The Legislature cut funding for the career and wage ladder during the recession but the successful pilot led to better retention and morale. Seventy percent of Washingtonians ages 17 to 24 would be ineligible for the Armed Services because they score too low on the military's basic exam for math, literacy, and problem solving. The ECEAP leads to on-time graduation rates and more post-secondary opportunities, including a military career. One in every five children in the United States is living below the poverty line. Early learning and care provides a host of benefits, including economic benefits that more than cover the cost of early education. Parent support programs reduce child abuse and neglect, preterm births, and low birth rates.

(Opposed) None.

(Other) Removing the Washington Library Association position from the ELAAC and replacing the position with an organization promoting literacy does not embody what librarians bring to the table, which includes partnerships and resources. Libraries help with shared resources and age appropriate technologies accessible to all early learners. A library-trained individual is important to the ELAAC.

Persons Testifying: (In support) Representative Senn, prime sponsor; Emily Murphy, Early Learning Action Alliance; Erin Haick, Service Employees International Union 925; Amy Anderson, Association of Washington Business; Rick Scott, Fight Crime Invest in Kids; Debbie Campbell, United Way of Lewis County and Centralia College Board of Trustees; Stephanie Smith, Learning to Grow Childcare; Karen Matson, Snohomish County; Carolyn Soltaire, MomsRising; Stephanie Wick; Jenny Nakat; Nimco Bulale and Amanda Diaz, OneAmerica; Kafia Abdillahi, Dual Language Provider; Gene Boes, Northwest Center; Dru Garzon, Greater Grays Harbor; Nicole Sohn, Washington Child Care Centers Association; David Graybill, ReadyNation; Jessica Vavrus, Association of Educational Service District; Dana Anderson, Educational Service District 113; Bethany Larson, Childhaven; Angela Haberman, Spokane County Head Start & Early Childhood Education and Assistance Program; Mark Geri; Mitchell Aoki; Silvia Gonzalez; Meka Riggins; Julie Peters and Rixa Evershed, Nature Nutures Farm; David Beard, School's Out Washington; Ryan Pricco, Child Care Aware of Washington; Yvette Townsend, Jitter Bug Childcare and Service Employees International Union 925; Joel Ryan, Washington State Association of Head Start and Early Childhood Education and Assistance Program; Mary Curry, Pathways Enrichment Academy and Service Employees International Union 925; Patty Hayes, Seattle King County Public Health; Brenda Palmer; Suzette Espinoza-Cruz, Save the Children Action Network; John Burbank, Economic Opportunity Institute; Kristin Wiggins, Mission: Readiness; and Laurie Lippold, Partners for Our Children.

(Other) Carolyn Logue, Washington Library Association.

Persons Signed In To Testify But Not Testifying: None.