When the end of pandemic-tied changes to a child care scholarship program took effect at the start of this year, it left both parents and child care facilities in difficult situations.
Citing the spending of all the federal money to pay for increased eligibility, lower copays and more stable payments to providers, the state health department ended enhancements to the Best Beginning scholarship program just as lawmakers gaveled into session in January.
But now a Democratic lawmaker from Missoula is bringing legislation to restore some of those provisions permanently, saying it would use a proven program to address the state’s lack of affordable and accessible child care.
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“House Bill 238 will help Montana stay competitive and ensure that working families can stay here and raise their families here,” said Rep. SJ Howell in a hearing before the House Education committee Thursday.
Howell said there’s an increasing and urgent need for child care in Montana and that care can be expensive, with the yearly cost for infant care at roughly $9,500 and toddler care at $8,400.
“That is more than the cost of in-state tuition and fees at our four-year institutions and that is 16% of household income for a family making $58,000 a year,” Howell said.
The bill would increase eligibility for the program from 150% of the federal poverty level, which is about $34,500 for a family of three, up to 85% of the state median income (275% of the federal poverty level), which is about $62,400 for the same size of family.
The bill would also cap copays at 7% of a family’s income. As of Jan. 1, when pandemic-era change to the program ended, Montana became a state with one of the highest copays in the country, with some families paying up to 14% of their monthly income under a sliding-scale model.
Howell said that under the scholarship program now, a single parent who earns $2,300 a month would pay a $320 copay. But under the bill, the same family would pay $161.
The final change in the bill would pay providers by enrollment, not attendance. While people who pay for daycare without the scholarship pay a facility the same tuition each month regardless of if they use it every available day or not, Best Beginnings reimburses based on attendance after a child misses more than 15% of the days in the month care is available.
Howell used the example of this January, which has 22 days a child could receive child care. If a child misses four or more, they’d be below the attendance threshold and the provider is reimbursed only for the days attended.
Meghan Ballenger is the executive director of Raise Montana, the statewide network office for the Child Care Resource and Referral Agencies and Regions in Montana.
Ballanger said staff at the agencies have worked with parents crying in their offices because the recent change in Best Beginnings has left them ineligible for the scholarship and they didn’t know what to do.
“The intention of this program is to support low-income, working families,” Ballenger said. “It’s designed to allow parents who have no other option but to work to access care that they can trust. We are not talking about families that have the option of working or not working, we are talking about low-income, working families.”
Heather O’Loughlin, executive director of the Montana Budget and Policy Center, said a lack of child care has kept some parents, and especially women, out of the workforce.
“Rising child care costs often force parents to make a difficult choice of whether to stay in the workforce, reduce hours, or leave the workforce entirely. The lack of stable child care options in every community puts pressure on workers and their employers,” O’Loughlin said.
About 40% of businesses cite a shortage of child care in their community that is impacting their ability to recruit and retain a workforce, O’Loughlin added.
To qualify for the program, a two-parent household must work at least 120 hours a month and a single-parent household must work 60. Parents can also be in school or a training program, and those using Temporary Assistance for Needy Families also qualify.
Sheryl Hutzenbiler, the owner of Munchkin Land in Billings, said programs have suffered from the end of the pandemic provisions.
“The recent changes in the Best Beginnings scholarship program have had huge negative impacts on child care facilities,” Hutzenbiler said. Providers have lost staff who had children enrolled where they worked because of the higher co-pays, Hutzenbiler said. With fewer staff, facilities cannot fill their programs with the maximum allowed. That creates a larger child-care crisis, Hutzenbiler said.
Facilities have also lost enrollment because some parents, when faced with the decision of working exclusively to pay for child care, just stayed home.
When Hutzenbiler received the more stable payments from the state, she was able to retain staff, hire a part-time employee and offer supplemental health insurance to her staff, which helps her keep her workers, she said.
“Without having that extra income, I would not have the staff that I have, I would not be able to offer the benefits that I have, and I probably would not be able to take on 15 children,” Hutzenbiler said.
Four different interim legislative committees worked on the issue of child care, and there are several solutions moving forward this session. While Democrats have said they were frustrated to not see child care-specific money in the governor’s budget, Gov. Greg Gianforte has pointed to his $1,200-a-year child tax credit for families earning less than $50,000 with children under 6, along with previous federal COVID-19 aid for providers.
Howell wanted to use the Best Beginnings scholarship to work on the issue because it’s been around for more than three decades and has been proven to work.
“It is working for the families who are receiving it,” Howell said. “We just need to bring those copays down and get those scholarships to more families.”
The committee did not take immediate action on the bill.