HB 648: Bridging the Gap to Childcare

Jun 27, 2023

This session, the Montana Legislature passed HB 648, making major strides in addressing the lack of access to affordable child care in Montana. We received GREAT news last week that Gov. Gianforte signed HB 648 into law, and the measures to expand the Best Beginnings scholarship program will go into effect on July 1. Here’s a bit more background on what this means for families.

HB 648 investment of $14 million over the next two years is a critical step in expanding Best Beginnings and making sure the program works for parents and providers. HB 648, sponsored by Rep. Alice Buckley (D-Bozeman), does three things:

  1. It expands eligibility for the Best Beginnings scholarship program to 185 percent of the federal poverty level, providing eligible families with access to child care subsidies to help cover the cost of child care when they are working or in school. For a family of three, that is an annual household income of about $45,000. A single parent with one child, who is working full-time at $16/hour will now be eligible for Best Beginnings. 
  1. It caps co-pays for families at 9 percent of household income. Before HB 648, many families on Best Beginnings have been paying up to 20 percent of their income in co-pays. The steep co-pay structure often creates a disincentive for working parents to take more hours or a wage increase. This past year, many families making just a little more than $3,000/month were facing co-pays of $500-$600/month. HB 648 will adjust the sliding fee scale to make co-pays more affordable for families on Best Beginnings. Starting July 1, that same family will likely see their co-pays drop to around $250/month, leaving more income to put toward housing, food, and other household costs. 
  1. It stabilizes reimbursement payments to child care small businesses by setting the rate based on a child’s enrollment, rather than attendance. The Best Beginnings program is structured to pay child care providers directly for families enrolled in the subsidy program. Originally, if a child was sick and missed more than three days of child care over the month, the state reduced the reimbursement to cover just the days of attendance. Most providers shift that cost to the family, creating a dynamic where a parent may be missing work (and wages) to care for a sick child while also facing increased child care costs. HB 648 requires the state to pay providers for the days a child is enrolled, just like a private pay parent does.  

HB 648 will go into effect on July 1, which means families living between 150 percent - 185 percent will now be eligible for Best Beginnings starting next month. Parents already accessing Best Beginnings will be receiving notification from the Department for Public Health and Human Services with their re-calculated, lower co-pay amounts, starting in July. 

Throughout the session, we heard from many working parents struggling to access Best Beginnings and make child care work for their family. For some parents, the rising co-pay levels were pricing them out of child care, forcing a difficult choice to cut back on hours or leave the workforce entirely. As one parent said, “HB 648 would make such a difference for families like mine who just need a little extra help.”

We applaud the Legislature and Gov. Gianforte for investing in Montana families and businesses and working to make child care more accessible for low-wage workers.

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

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.