Alaska Gov. Mike Dunleavy said Thursday he did not support a request from child care providers to add millions of dollars to the coming fiscal year’s budget to raise wages for child care providers, instead announcing the formation of a task force that will examine the issue and provide policy recommendations to the governor by the end of the year.
Child care, expensive and in short supply in Alaska, has benefited from more than $50 million in federal pandemic aid paid as grants to providers since 2020. With federal funding dried up this year, child care advocates have asked lawmakers to add $15 million to the state budget to boost child care provider wages, which they say average around $13 per hour and could be raised by $5 per hour with the requested funding.
Dunleavy said such a funding boost this year would constitute a “knee-jerk reaction.”
“I’m not going to support $15 million in child care because we don’t even know what the child care is we’re talking about,” Dunleavy told reporters Thursday in Anchorage. “But just to say $15 million — who knows, after the task force is done, it could be more. It could be less. We don’t know that until we go through this process.”
The task force will include three voting members from state government, and eight voting members representing child care providers, advocates, the business community, local government and parents. They will be charged with coming up with policy solutions including ones to incentivize private businesses to sponsor daycare, and to offer on-site care for the children of state employees.
Child care advocates said they were hopeful that the formation of the task force signaled a recognition by the administration of a problem that has long plagued the state — by one estimate costing Alaska $165 million in lost economic activity per year. But they also said urgent action was needed while the task force completes its work.
“I’m very concerned about what is going to happen if some funding is not added to the budget to specifically address the low wages that child care providers earn, which is currently the primary cause of the child care shortage,” said Blue Shibler, executive director of the Southeast Alaska Association for the Education of Young Children. “The child care sector has been largely stabilized with pandemic-era dollars and those are going away, and we need some sort of infusion of money to replace those dollars right now, as soon as possible.”
The federal coronavirus relief “has proven to be investments that help make a difference for child care and help them stay open,” said Stephanie Berglund, chief executive of thread, Alaska’s child care resource and referral network. “Our concern is that without support and increased financial investments that we could see child care continue to struggle and have challenges.”
The House Finance Committee narrowly voted down an amendment to the state operating budget late last month that would have added $15 million for the child care grant program. But Shibler said she and other advocates in the newly formed Child Care Coalition of Alaska would continue to push the Senate to add the funding to the budget.
Sen. Jesse Kiehl, a Juneau Democrat who sits on the Senate Finance Committee, said “there is definitely some interest in the Senate” in adding that item to the budget, but he did not know whether there were enough votes to translate that interest into action. The Senate is set to take up the operating budget later this month, after the House takes its final vote on the budget early next week.
Sen. Löki Tobin, an Anchorage Democrat, said she had already expressed interest in serving as the Senate’s non-voting representative on the task force, but “it’s really imperative” to provide child care solutions this year rather than waiting until the task force has completed its work.
“Myself and some other folks in the Senate majority who are very passionate about this topic have been talking about what are the things that we can do with the current fiscal climate,” said Tobin, acknowledging that an expected drop in oil revenue this year and a push from the House to provide a $2,700 Permanent Fund dividend have left the Senate with limited options to increase funding for state services without first cutting the dividend.
Though Dunleavy said he did not support adding funding for child care providers, he did not say he would reject such funding if it was adopted by the Legislature.
“I’ll have to see what the funding is for, how it’s constructed, what its purpose is,” he said. “Theoretically, if something like that comes through and makes it through the Legislature, we’ll take a look at it and we’ll decide at that point.”
The House is also considering several measures to improve child care worker wages and improve availability without adding money to the grant program.
Rep. Zack Fields, an Anchorage Democrat who has sponsored legislation to bolster the child care sector, said Thursday that the task force will be “complementary to and supportive of” proposed legislation. Dunleavy did not say whether he supported any of the existing measures before the House.
Dunleavy announced the formation of the task force at the Credit Union 1 Alaska headquarters in Anchorage, which operates an on-site day care for employee children. Dunleavy signaled that while state investment could be needed, he was also looking to the private sector to provide solutions.
He was accompanied at the announcement by Kati Capozzi, president of the Alaska Chamber of Commerce, who said child care is “one of the top concerns” for the state’s business community, and related directly to recruitment and retention of workers.
“We believe that this issue of day care is absolutely crucial, that it’s not just an issue for a photo op,” said Dunleavy. “This is not just for show. We’re going to roll up our sleeves. Our goal is to come up with a number of different models and how we can pay for those models with partnerships and other sources for funding.”
Shibler and Berglund pointed to worker recruitment problems exacerbated by the pandemic as contributing to the newfound spotlight on child care access. In several states facing similar challenges, that attention has spurred new and increased state investments in education, but Alaska had so far been an “outlier,” Berglund said, in the lack of state investment.
Shibler said the task force “will hopefully help Alaska be a pioneer in how it supports its child care system.”
“Accessibility, affordability and quality are not attainable until you actually have workers in the child care sector willing to do the work, and you’re not going to get that as long as you’re paying $13 an hour,” said Shibler. “What’s the point of increasing accessibility to a system that’s going to fall off a cliff? Frankly, that is exactly what’s going to happen if we don’t do something to stabilize the child care workforce this coming fiscal year.”