Alaska child care task force finalizes first report for a sector in crisis

Alaska’s beleaguered child care sector is receiving unprecedented attention from state and local governments, but advocates say substantial new investment is needed.

Long waitlists, low wages, lack of availability and soaring tuition have left Alaska’s child care sector in crisis. COVID-19 relief helped child care providers survive, but the end of pandemic aid this year left even fewer options while demand for care remains high.

In July, Bright Beginnings operated four child care centers across Anchorage and was licensed to care for 450 children. Since then, two centers have closed and the family-owned operator is now licensed to care for just 200 kids.

“We couldn’t hire and retain enough quality people in order to enroll enough children to break even,” said Heather DeLoach, corporate finance manager at Bright Beginnings. “We had to make a decision, unfortunately, to consolidate our resources and just try to get our two main locations as strong and solid as possible in order to stay open.”

Alaska Gov. Mike Dunleavy established a child care task force through an administrative order in April. The goal was to improve the affordability, availability and quality of child care in Alaska.

The 11-member task force is set to formally release its first recommendations to the governor by the end of the month. They are focused on assisting providers and call for the removal of barriers for licensing and background checks to strengthen the workforce.

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While those recommendations have been widely welcomed, many in the child care sector have said that significant new state investment remains essential.

Changes in the works

Department of Health Commissioner Heidi Hedberg said the majority of the recommendations require regulatory instead of statutory changes.

“The low-hanging fruit, we very much are actioning quickly, because we don’t need to wait,” she said.

Thirty-two of the task force’s 33 recommendations were approved with broad consensus. One recommendation for the state to subsidize child care workers’ wages was narrowly approved at a Wednesday meeting.

Advocates on the task force said the state boosting salaries was an essential component for the sector’s success, reflecting testimony from child care providers. Opponents raised concerns that extra funding would inevitably come from taxing private businesses or that it could be eliminated by the Legislature in the future.

A McKinley Group study from October found that Alaska child care workers earn an average of $29,500 per year or $14.18 per hour. Nolan Klouda, director of the Center for Economic Development at the UAA Business Enterprise Institute, said in October that rent for a typical one-bedroom apartment in Anchorage would consume more than half of an average child care worker’s paycheck.

The task force’s second report is due at the end of July and will focus on affordability, quality of child care and subsidies — potentially for families. McKinley Group is creating a model on the costs of child care — due to be completed in June — which will inform the second and more complex report.

Blue Shibler, executive director of the Southeast Alaska Association for the Education of Young Children, said the task force’s first set of recommendations were all “pretty fantastic.”

Shibler said she received the most feedback for one recommendation that calls for child care employees to have their own children’s care subsidized. She said that would help recruit and retain teachers and would be impactful, following a trend of the sector needing significant new state investment.

“The recommendations that require money, those are the ones that are really going to make the biggest difference,” Shibler said.

Legislative plans

With New Mexico lagging at the bottom of rankings for child well-being, voters there approved a constitutional amendment last year to pay for early childhood education. More than $150 million is slated to be available each year for the sector.

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Alaska advocates say New Mexico is the gold standard nationally for child care initiatives as assistance for families is expanded. Local efforts have been much more modest.

The Alaska Legislature approved $7.5 million in this year’s budget to boost child care workers’ wages. The subsidies are set to be distributed by an early childhood nonprofit, thread Alaska, in February. Applications are open through Jan. 7.

Stephanie Berglund, CEO of thread Alaska and a member of the governor’s task force, said the hope is to boost wages by $1 an hour, but that cannot be promised. The final amount given to each employee will depend on the number of successful applicants, she said.

Hedberg declined to comment on whether state wage subsidies would be included in Dunleavy’s budget proposal for the next fiscal year, which must be released by Dec. 15.

Some legislators have focused on different proposals.

Anchorage Republican Rep. Julie Coulombe, a member of the governor’s child care task force, moved to Alaska in 1986 with her husband, who was serving in the military. When the couple had children, she decided to open a child care center out of her house, which delayed her starting her career for more than a decade.

“This is a normal story for a lot of Alaska families,” she said. “You have to make the choice. Can I go back to work? Is it worth it for me to go back to work? Financially it wasn’t.”

Coulombe introduced House Bill 89 this year. It would give tax credits for child care providers and increase the number of families eligible for child care assistance with the state footing the bill. A cost estimate from the Alaska Department of Health is expected soon.

The legislation was deliberately stalled in the House Finance Committee when the governor’s task force was announced. Coulombe said her Republican colleagues have been “skittish” about the proposed subsidies for families, but she hoped to attract more bipartisan support and pass her bill on to the governor’s desk during the next legislative session.

“We’ll see how it goes,” Coulombe said. “But that’s my intention.”

Anchorage and Juneau initiatives

For the past several years, the City and Borough of Juneau has subsidized licensed child care providers with direct investments. They can receive up to $400 a month per toddler or infant and $100 per month for each preschooler.

Berglund, a member of the governor’s child care task force, said that Juneau has been lifted up as a “leader” in Alaska for other local governments. She said fewer child care centers have closed in Juneau than in other parts of the state.

Shibler, who has helped administer Juneau’s child care program, said the funding has started to help expand capacity and boost child care workers’ wages.

“It’s still not at a livable-wage level, much less than a thriving wage,” she said. “We want child care providers to thrive. And if we care about the quality of child care, we want to be able to pay a wage that would attract somebody who has education and experience in the field.”

Juneau’s child care initiatives cost around $2.3 million per year. A majority of that funding comes from local taxes, but also from a federal grant.

Robert Barr, Juneau’s deputy city manager and a member of the governor’s task force, strongly advocated for putting in the recommendation for a state wage subsidy into the task force’s final report. He said substantial new funding at all levels of government is essential.

“We’re making some small progress, but really that progress has been measured in what we haven’t lost,” he said about Juneau’s initiatives.

In Anchorage, voters solidly approved a ballot proposition in April to use city marijuana tax revenue to pay for early childhood education. Estimates are that could provide between $5 million and $6 million per year for the sector.

An oversight board is being established to help the Anchorage Assembly decide how the money will be spent. The first pot of money is slated to be distributed in 2025. Supporters, though, are urging child care providers and families to manage their expectations of the difference it will make.

“It’s not a drop in the bucket,” said Trevor Storrs, CEO of the Alaska Children’s Trust and a member of the city’s implementation team. “But it’s only a pour into the bucket.”

The need for assistance comes as providers close their doors and costs soar. For the first time in 20 years, there are fewer than 200 licensed child care programs operating in Anchorage, Berglund said.

At Bright Beginnings, families of infants and toddlers currently pay $1,800 per month, dropping down to $1,300 a month for preschoolers. DeLoach said costs to provide care increased 40% to 60% over the past three years with the impacts of high inflation and as employees received higher wages.

She said she hopes Bright Beginnings can expand again if the market supports it. But in the meantime, DeLoach is keeping an eye on the state’s child care task force and the tangible benefits she hopes it brings.

“I’m really encouraged that there’s so much ongoing conversation about how to help the child care industry,” she said. “My own fear is that the conversation won’t materialize into any real action. And so I just hope and encourage everyone to see it through and not just leave it on the cutting room for ideas.”