House budget increases spending on subsidized childcare

THE MASSACHUSETTS HOUSE budget, which will be released from the Ways and Means Committee on Wednesday, will include major new investments in early childhood education targeted at expanding the workforce and helping providers that offer subsidized care to low-income families. 

However, the changes, which are aimed at increasing the accessibility of childcare, do not address the problem that many middle-class families have affording the state’s expensive private pay childcare system. 

“We have to start somewhere, and the subsidized programs serve our most vulnerable students and children,” said House Education Committee Chair Alice Peisch at a press conference at Ellis Early Learning in Boston. Peisch chaired a special commission that examined the economics of early childhood education and made myriad recommendations for improving the system, to the tune of $1.5 billion a year.  

“The report came through with quite a price tag, and one we couldn’t commit to all at once,” said House Speaker Ron Mariano. Mariano said the House wanted to act on some items that could be done immediately.  

House Ways and Means Chair Aaron Michlewitz said the House wanted to take the first steps toward addressing childcare accessibility. The proposals aim to shore up the workforce, which will help centers keep classrooms opened and staffed. “Affordability is an important discussion, and we’ll continue to have that,” Michlewitz said. 

The biggest financial investment will be $60 million for a rate reserve to increase salaries for early education and care providers who accept children with state subsidies. These are generally low-income or otherwise at-risk children, like foster children. That would triple the size of the reserve from $20 million. The exact salary impact would vary per center, since the reimbursements are paid to the centers, which have flexibility on how to spend the money, and the amount will depend on how many subsidized children each center has. 

According to the special commission’s report, there are around 7,500 licensed childcare providers in the state, and pre-pandemic, around half had at least one child receiving a state subsidy. The rest were entirely private pay, which means their money comes from parent tuition. Close to 50,000 children are getting state subsidies, with another 16,000 on a waiting list. 

The House budget would also allocate $10 million for grants to early education providers to defray the costs of paying for childcare for their own staff.  

And it would change a system that now pays subsidized childcare centers based on attendance, to instead pay them based on enrollment. Under the current system, if a child enrolls but is absent, the center only gets paid or a limited number of documented absences. Under the proposed change, as long as the child remains enrolled, the center would get paid, without having to document excused absences. (A similar change was put in place during the COVID pandemic.) “There is no way you can run a business when you’re unsure of what you’re going to take in,” Mariano said. 

Staffing has always been a concern for childcare centers, since the field tends to be a low-paying one, with high turnover. Staffing became a particular problem during the pandemic as educators quit or were absent more frequently due to illness or caregiving responsibilities. Mariano said lawmakers hope raising staff salaries will help retain staff and attract new staff. 

Rep. Josh Cutler, House chair of the Committee on Labor and Workforce Development, recalled visiting a Head Start in his district and hearing that they had to close a classroom one day because they were down one teaching position and another teacher called in sick. He said he realized the ripple effect that had on the economy, when all the parents relying on that classroom then had to scramble to find other childcare arrangements or take a day off work themselves. “We need more workers, and retaining current workers is just as important,” Cutler said. 

Asked whether any of the changes will directly address the affordability challenge for families, Mariano said “there are a few things we hope will have an impact on the cost,” particularly stabilizing the revenues for subsidized providers based on enrollment. But he acknowledged, “Directly it’s a little tough to pinpoint exactly what is going to change.”  

“The fact of the matter is we have to begin somewhere,” Mariano said. “There is a system in place that is not working. We saw a couple of things we can do immediately that will make the system work much better than it’s working now.” Mariano said longer-term solutions will involve not just state money, but federal funding and partnerships with the business community.  

Peisch added, “The recommendations of the commission anticipate a multi-year implementation, and this is where we’re going to begin.” 

Some providers say they wish lawmakers would help the private pay sector as well. According to the commission’s report, more than 1,300 providers closed during the pandemic, and about two-thirds of them are unsubsidized providers.  

“It’s heartbreaking the number of private pay providers that had to close since the mandated shutdown because they’re just being hit with such financial stress that they can’t stay open,” said Gina Tiberio Hamilton, a family childcare provider. Hamilton said costs have skyrocketed for things like food, oil, and curriculum. “We can’t continue to hit the parents with tuition increases. The parents are struggling as well,” she said. 

Deb Fastino, director of the Common Start Coalition, a broad coalition that has been pushing for greater public investment in childcare, said the House budget “would represent a significant downpayment on our vision of a child care system that works for everyone.” Though, Fastino added, “As we move through the budget process, we also hope to see additional help for families who are struggling with the high cost of child care.” 

Correction: The current policy regarding how a subsidized center is paid for child absences has been corrected.