Carly Graf, Lee Enterprises, 02/21/24
Democrats have rolled out three legislative proposals intended to help families afford child care, casting their plans as not just pro-family but also pro-business.
Montana’s child care landscape is bleak. Ballooning operating costs mean providers can barely afford their bills without asking families to pay more, but parents are staring at monthly tuition that gobbles up much of their incomes. Difficulty hiring and keeping workers leaves many child care facilities that do exist unable to operate at capacity, worsening an already-acute shortage of day care spots around the state.
Past legislative efforts to bolster the industry have failed to create the transformative change once hoped for, and the persistent lack of affordable and high-quality child care continues to keep parents out of the workforce, according to the state’s labor department.
In May 2024, lawmakers on the Children, Family, Health and Human Services Interim Committee took the rare step of blocking an administrative rules package two years in the making to ease licensure rules so that more new child care providers could open their doors and others could expand capacity.
After spending much of the interim session exploring the industry's continued challenges, lawmakers are now tasked with determining what viable solutions might be.
“We are at a crisis point,” said Grace Decker from the Montana Advocates for Children at a Feb. 6 hearing in the House Human Services Committee.
Rep. Jonathan Karlen, D-Missoula, is sponsoring two bills that would beef up Best Beginnings, the existing subsidy program for working parents to make child care more affordable.
The average Montana parent pays more for child care — $11,700 per year at a center, or $9,100 in a home-based option — than they would for in-state tuition at Montana State University.
The Best Beginnings scholarship program uses federal dollars and some state dollars to pay licensed child care providers directly and to cap eligible families’ out-of-pocket expenditures at 9% of their income; the exact amount is based on a sliding scale.
The 2023 Legislature boosted the income threshold from 150% of the federal poverty level to 185%.
House Bill 457 would change the income eligibility threshold yet again, allocating $17 million to ratchet it up to 85% of the state median income. The idea is that the last increase failed to capture families who can’t afford the steep price tag of child care but make too much to qualify for help.
A family of three at 85% of the state median income earns around $68,000 a year versus current guidelines, which cap eligibility at an annualhousehold income of $47,700. Right now, those families making $68,000 would spend around 17% of their income on infant care.
Xanna Burg from Kids Count, a child wellbeing research organization, estimated that about 2,500 more children in Montana would participate in Best Beginnings because of the proposedchange.
Supporters told lawmakers at the Feb. 19 bill hearing that the current setup forces working parents to turn down job promotions or increased hours for fear they will lose their subsidy and no longer be able to afford child care.
Carrie Krepps, the executive director of the Florence Crittenton Center in Helena, described that decision point as a cliff right before a person gets to the point of financial independence.
“We feel this is very preventable with a bill such as this,” Krepps said.
What tripped up some legislators, though, was the reality that only a fraction of eligible families received assistance through Best Beginnings last year. The Montana Budget and Policy Center estimates only 12% of households who could have used the subsidy did so, largely due to administrative barriers.
“I wish we could see that there’s been some change with what we’ve already done,” said Rep. Ed Buttrey, R-Great Falls.
Karlen’s House Bill 456 seeks to extend the Best Beginnings scholarship to any child care worker employed at a licensed day care center or registered home-based option. The bill would allocate $5.5 million to fund the program.
Many facilities already offer discounted rates for their staff's children, but they do so at a cost that often makes already-tight margins even tighter. Supporters say offering this perk using state money would help child care centers recruit workers — who currently earn an average of $13 an hour in the state — without having to risk financial strain.
"This is a narrowly targeted solution to open up more child care slots, get more people in the workforce," Karlen said.
The Missoula Democrat pitched both changes to Best Beginnings as finding a “sweet spot” because the program still requires parents to foot some of the bill, directs funds to licensed providers and leverages federal dollars, which are zeroed out on direct services and administrative costs before the program starts drawing from the allocated state funds.
“We get quite a big bang for our buck with this program because the state is not shouldering the entire cost,” Karlen said. “It strikes a middle ground in empowering families and stewarding taxpayer dollars.”
Both bills will next face votes in their respective committees.
Democrats also took a big, $60 million-a-year swing with House Bill 360 from Helena Democratic Rep. Melissa Romano.
The bill, which was tabled in committee on Feb. 10, would have distributed monthly support payments to the state’s roughly 1,000 licensed child care providers to give employees a living wage and improve benefits.
Proponents filled the committee room earlier this month, saying they often can’t afford to give workers paid sick days or offer robust insurance or retirement plans. Providers said they are forced to decide whether to pay employees wages they deserve but open fewer child care spots to make the budget pencil out, or pay workers less in order to grow their capacity.
Rachel Helmer, the owner of Magic Forest in Missoula, said she was forced to close one location because she couldn’t make that equation work. Mariel Butan from Big Sky’s Morningstar Learning Center said she’s often competing with fast food joints that can pay workers more.
COVID-19 funds were overwhelmingly used by providers across the state to pay staff more or offer them perks they had never before enjoyed, likepaid sick days or paid holidays. HB 360 sought to build on that lesson, giving providers money for employees and therefore freeing up other resources to keep the doors open and expand capacity.
Montana would have been one of the first states to enact such a robust program. Ultimately, the House health committee did not advance HB 360 — partly driven by its considerable cost and also by reticence to put public dollars towards private businesses — but the hearing laid out the industry’s challenges.
Simply put: “Child care costs more to produce than families can afford to pay,” Decker said.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.