Ahead of their fiscal 2023 budget reveal later this week, Massachusetts House leaders on Monday toured Ellis Early Learning in Boston’s South End as they previewed a new child care funding mechanism intended to promote positive economic ripple effects — including ensuring parents are able to rejoin the workforce following the COVID-19 pandemic.
But parents should not necessarily expect cheaper child care costs under the House proposal.
State representatives want to provide financial assistance to early education centers to stabilize their funding stream and workforce after two years of economic turmoil. Yet top elected leaders, sketching out vague budget parameters during a news conference, stopped short of highlighting direct relief or subsidies to families, in a stark comparison to Gov. Charlie Baker’s budget proposal.
Baker in January recommended creating a pay scale to ensure families eligible for subsidized child care program pay a fee that is only 7% or less of their income in fiscal 2023, according to the governor’s office. Baker also proposed doubling the tax credit for dependent and child care, which the administration estimated would help around 700,000 families.
Some 721,000 Massachusetts benefited from the expanded child tax credit made possible by federal COVID relief dollars. Families had received $3,000 per child aged 6-17 and $3,600 per child under age 6, under a credit that’s now expired from the American Rescue Plan.
House Speaker Ron Mariano on Monday outlined more than $100 million in new investments in early education and child care that will figure into a broader budget presentation Wednesday, with the bulk of that funding — $60 million — earmarked for increasing the reimbursement rate for educators’ salaries. There’s also $10 million in grant funding to early education providers to alleviate other staffing costs, plus $16.5 million in grant funding to Head Start early education and care programs across Massachusetts.
“We’re hoping that helps retains staff (and) helps attract staff,” Mariano said of the reimbursement lump sum, which is a $40 million boost. “And another sort of thing that really drove me crazy was the voucher system, and we want to pay you based on enrollment, rather than attendance. You know, there is no way you can run a business when you’re unsure of what you’re going to take in.”
The House wants to ensure that places like Ellis Early Learning are able to flourish, Mariano said after he and colleagues toured the facility.
Nationwide, the pandemic led to the loss of more than 131,200 child care jobs since February 2020, according to the Center for the Study of Child Care Employment at the University of California, Berkeley. As of December 2021, the percent of child care jobs was at 83.3% compared to the February 2020 baseline; the percentage had plummeted to 48.6% in June 2020.
Mariano said the House plan would help stabilize job losses plaguing the industry by ensuring higher pay. But Monday’s announcement is only the beginning of the state’s commitment to early education and childcare, Mariano said.
“It’s going to take more than just us in the State House. It’s going to take the federal government, and it’s going to take businesses leaders,” Mariano said. “I’ve heard from a number of different businesses about their inability to attract workers. Well, one of the reason is a high cost of daycare, the high cost of childcare.”
State Rep. Aaron Michlewitz, the House Ways and Means chair, echoed that concern as he framed early education as a catalyst for statewide economic growth.
Massachusetts finds itself in “admirable” budget situation, Michlewitz said, due to financial planning amid the coronavirus pandemic and the state’s rainy day fund.
“We have an opportunity to target the middle class with investments that benefit them (for) years to come …” Michlewitz said. “By funding early ed and making a significant investment in the rate reserve, we will allow our educators to access better-paying jobs. We will also, in turn, allow the parents of the children in those classes to have sustainable, affordable childcare and thus allowing the parents themselves to re-enter the workforce and increasing their own household income.”
That rate reserve for early child workers’ salaries — predicated on employment, rather than attendance, at centers — is three times greater than any previous budget allocation, Michlewitz said as he garnered a round of applause.
Using Massachusetts’ budget surplus to help the middle class is the “strongest thing” that lawmakers can do to provide economic relief, said state Rep. Andres Vargas, the House vice chair of the Joint Committee on Economic Development and Emerging Technologies. In Haverhill, Vargas lamented the vast majority of his constituents cannot afford to enroll their youngsters in early education programs.
“So this is a huge, huge win for Gateway Cities — a huge win for middle-class families, for all working families across the commonwealth,” Vargas said, referring to municipalities such as Springfield, Worcester and Holyoke seen as critical hubs for economic development.
Still, Mariano acknowledged to reporters that it’s difficult to pinpoint how the new early child care funding would support working families directly — other than the intangible benefit of a more stable learning environment, made possible by workforce investments.
For now, infant care can account for 22.7% of the median family income, with Massachusetts ranked as the second most expensive state for care nationwide. That’s based on an average annual cost of $20,913, or $1,743 monthly, according to the Economic Policy Institute.
The House’s funding approach is tailored for subsidized child care programs, which state Rep. Alice Peisch said would support “our most vulnerable students and children.”
The House has decided to focus on immediate solutions to resolve “a system in place that is not working,” Mariano said. Massachusetts can afford to fund these childcare initiatives for at least the new few years, the speaker said, though the long-term outlook is contingent on the “vagaries of the economy.”
“I think if you went around and talked to the teachers here today, they’d be thrilled to know that salary support system is going to increase by three times,” Mariano said. “So that, if anything, will give us — we hope — a consistent and reliable workforce.”
The pending fiscal 2023 budget also encompasses new loan forgiveness programs, including $20 million within the Department of Mental Health and $10 million for homeless shelter workers, Michlewitz said. House lawmakers intend to allocate $15 million to support teachers of color, $20.4 million for workforce and technical training, and $28.5 million for summer and year-round jobs for youth from low-income families in the budget as well, among other investments.
Lawmakers did not delve into workforce pipeline projections, including how many new early education, mental health or shelter professionals could be hired through participating in loan forgiveness programs.
Similar to problems in the early education field, State Rep. Adrian Madaro said the behavioral health care sector is impacted by low wager, large caseloads and high barriers to entry, which all hinder workforce recruitment and retention.
“These funds will help us restore and strengthen our state’s mental and behavioral health services by caring for the people who form the backbone of our health care system,” Madaro, the House Chair of the Joint Committee on Mental Health, Substance Use and Recovery, said of the new budget investments. “We can increase the pool of skilled people with diverse experiences serving those with mental and behavioral conditions. This will lead to a more equitable recovery from COVID and, in turn, better outcomes for patients.”
Mariano, when asked if he planned to address tax breaks during Wednesday’s budget reveal, quickly responded: “No.”
“I think we’ve very clear that the revenue growth we’ve seen here is an opportunity to reinvest for FY ‘23,” Michlewitz chimed in. “There’s gonna be other pieces in the budget that come out Wednesday that you’re gonna see reinvesting in other sectors of our economy.”
Yet Gov. Charlie Baker for months has prodded the Legislature to consider his proposed $700 million tax relief package targeting seniors, low-income renters and families, among other vulnerable Massachusetts residents who have suffered economic blowbacks dealt by the COVID pandemic.