Following Major Progress on Fair Pay for Early Educators, DC Must Preserve Child Care Funding

Chairperson Mendelson, members of the Committee, thank you for the opportunity to testify. My name is Tazra Mitchell, and I am a Chief Policy and Strategy Officer at the DC Fiscal Policy Institute (DCFPI). DCFPI is a non-profit organization that shapes racially-just tax, budget, and policy decisions by centering Black and brown communities in our research and analysis, community partnerships, and advocacy efforts to advance an antiracist, equitable future. 

DCFPI would like to commend policymakers for making bold progress on fair pay for early educators. We commend the Office of State Superintendent (OSSE) and the DC Health Benefit Exchange Authority (HBX) for their remarkable implementation of the Early Childhood Educator Pay Equity Fund (PEF), which benefits over 3,000 underpaid early educators, most of whom are Black and brown women. My remarks will focus on the performance of the PEF and steps policymakers can take to further promote equity in DC’s early learning system, including:   

• Giving greater weight to providers participating in the child care subsidy program in the PEF equity adjustment;  
• Providing stakeholders an opportunity to provide feedback on the long-term compensation program;  
• Using the PEF to ensure that directors of early learning programs receive pay commensurate with the credentials required by OSSE licensing beginning December 2022; and,  
• Reinvesting savings in the child care subsidy program to expand eligibility to more moderate-income families struggling to afford child care.  

Pay Supplements and Health Care Are Boosting Early Educators’ Economic Security

Beginning last fall, OSSE’s Division of Early Learning swiftly delivered PEF funds to underpaid early educators, who are the foundation of our early learning system and shape the most defining years of infants’ and toddlers’ development. More than 90 percent of the licensed early childhood teachers and teacher assistants eligible for the program have received a pay supplement of up to $14,000, with the amount varying by position type and full-time status.^[1] For full-time early educators earning the pre-PEF median wage of $36,337, $14,000 payments increase wages by almost 40 percent, or about $1,170 per month. Educators have shared with the Under 3 DC Coalition stories about how they can now afford to invest in long-put-off family and health care needs, underscoring how valuable this program is.

The high take-up rate in the pay supplement program is in large part due to OSSE’s thoughtful and collaborative leadership and advocates’ outreach to teachers encouraging their participation. Throughout the program design process, OSSE welcomed feedback from stakeholders, provided regular updates on implementation, and offered technical assistance to providers and teachers. OSSE should continue to use stakeholder input to guide the design and implementation of the long-term compensation program, which beginning in October 2023, will distribute operating funds directly to child development facilities (CDF) that will in turn directly increase early educator pay. 

DCFPI would also like to thank you, Chairman Mendelson, for convening the Early Educator Equitable Compensation Task Force, protecting pay supplements from benefit cliffs,^[2] and allowing excess PEF funds to finance health care premiums for CDF staff. Because of your leadership, and tireless efforts from HBX, more than 110 CDFs—a quarter overall—and 610 staffers now have access to no- or low-cost health care coverage through the Health Care for Child Care (HC4CC) program.^[3] HC4CC is available to CDF staff regardless of where they reside and job title, and DC-based workers have the option of family coverage. The program is significantly improving the affordability of insurance for hundreds of families and many small businesses.

HBX is focused on boosting participation among CDFs, providing technical assistance to employers and staff, and soliciting feedback on ways to further tailor HC4CC to meet CDFs’ and workers’ needs. They are also working closely with the Department of Human Services to monitor workers who lose Medicaid coverage due to higher pay, with a plan to quickly enroll affected workers in HC4CC. As OSSE and HBX continue to design and build out the compensation program—a complex endeavor—protecting all PEF dollars is crucial to advancing gender and racial justice in the sector and improving the quality of early learning for DC’s children.  

Ensure Stakeholders Have An Opportunity to Provide Feedback on the Long-Term Compensation Program  

As required by the fiscal year (FY) 2023 budget, OSSE will soon submit to the Council the parameters that they will use in the long-term compensation program. This includes the funding formula for disbursing funds to CDFs, the equity adjustment that will provide additional funds to CDFs serving families with fewer economic resources, and a salary scale that puts early educator pay on parity with their counterparts at DC Public Schools. The design of these elements, particularly the equity adjustment, carries crucial implications for the program’s ability to build towards a racially just early education system and thus warrants an interrogation from Council and stakeholders. 

OSSE should limit the extra funding that the equity adjustment provides to CDFs participating in the child care subsidy program to ensure that children in families with the most significant barriers experience the greatest benefit. The funding could be based on the percentage of enrolled children whose families use a subsidy, as the Task Force suggested.^[4] Such targeting would help mitigate current and historic inequities that make these CDFs less likely to have the resources to meet the PEF’s salary requirements and provide families with high-quality care. An added benefit is that this adjustment could incentivize additional subsidy participation, which would increase the supply of high-quality slots for DC’s most vulnerable children.

OSSE should make public their program design when they share it with the Council and solicit feedback through a public comment period. Given OSSE’s update will come after today’s performance oversight hearing, DCFPI also encourages the Committee of the Whole to hold a roundtable with key stakeholders to assess the strength of OSSE’s program design and to offer improvements and implementation recommendations. As OSSE moves closer to implementing the permanent compensation program, they should continue open communication about instructions and deadlines, as they have done with great success on pay supplements.  

Expand the PEF to Include Fair Compensation for Directors  

Throughout the COVID emergency, directors of CDFs played a key role in stabilizing the sector and stood with educators to serve young children and their families. Much like school principals, directors set the educational tone of the program, train and support educators, and manage their facilities’ administrative and financial well-being. Directors have been essential partners to OSSE on the rollout and success of pay supplements by keeping teachers “staff type” accurately updated in the licensing data, which is used to govern their eligibility for higher compensation. And as of December 2022, OSSE licensing requires directors to attain a minimum of a bachelor’s degree, reflecting that what early learning program directors know and do has a significant bearing on the quality of education young children receive.

Using the PEF to ensure that directors receive pay commensurate with the required credentials could motivate more of them to stay in the field and incentivize quality leadership in the child care sector. The Task Force discussed the importance of including directors in the compensation program to prevent loss of leadership in early learning programs. Their report listed wage compression as a risk to monitor, among other ripple effects of increasing teacher salaries without doing so for directors and other staff. Wage compression occurs when there is little difference in pay between colleagues—such as teachers and directors—despite significant differences in things like skills, experience, and job responsibilities. 

Under the long-term compensation program, original estimates for minimum salaries range from $39,250 for an assistant teacher with less than a Child Development Associate credential to $66,735 for a teacher with a bachelor’s degree or higher. That highest minimum salary for teachers is nearly double the pre-PEF median wage for educators, and higher than what some directors earn. Director salaries range between $53,216 to upwards of $93,128, according to salary estimates in the District’s cost of care model.^[5] Larger and better resourced programs are likely to be on the higher end of that scale, with the largest and best resourced programs likely offering salaries greater than indicated in the cost of care model. OSSE is updating the minimum salary requirements to reflect parity with the new Washington Teacher’s Union (WTU) contract, which significantly raises public school teacher pay; they are also updating the cost of care estimates. A public comment period and a COW roundtable would allow stakeholders an opportunity to provide feedback on the new salary minimums and model and flag any wage compression challenges that may arise.  

As OSSE builds out the compensation program, it is important for the Council to preserve the non-lapsing status of the PEF given the many uncertainties about the costs of, timeline for, and participation in the program. Future WTU contracts will grow the cost of parity, and there will undoubtedly be other pressures such as growing health care costs. Policymakers can use the $17 million in unspent PEF dollars in FY 2022 to support growing costs of the program on a one-time basis.  

Use Savings in the Child Care Subsidy Program to Expand Eligibility    

Protecting and strengthening the child care subsidy program is critical to any racially just early education system and inclusive economy. DCFPI supports Mayor’s Bowser’s proposal in her “Comeback” plan to expand the subsidy program to include families making up to 300 percent of the federal poverty level (FPL, about $90,000 for a family of four). A supermajority of the children who stand to benefit are Black and brown, according to Census data.^[6] The Under 3 DC Coalition supports that goal, given affordable child care is out of reach for many families in the District, with infant care for one child taking up nearly 29 percent of a median family’s income.^[7] Low- and middle-income families feel this unsustainable burden most because child care costs exceed the federal affordability standard of 7 percent.  

The District can reduce this growing financial burden on families by making more households eligible for the subsidy program. The good news is we can afford to let more families in. Utilization rates for the child care subsidy program have been dropping rapidly over the last two years across the District, as demonstrated in point-in-time data provided in OSSE’s oversight responses.^[8] The utilization rate is the number of children using subsidies compared to the number of licensed slots. Policymakers can reinvest savings from underutilization to expand eligibility to more moderate-income families struggling to afford child care. Experts believe the drop in the utilization rate is largely due to a declining birth rate and the mismatch between supply and demand, with some CDFs having long wait lists for infants while having difficulty filling other toddler slots. Barriers to the application process may also be a factor causing utilization to drop.  

Preserving and improving the quality, accessibility, and affordability of child care is an ongoing need of the early education system. Every last cent in the child care budget is needed to continue addressing each of these dimensions to ensure that every child has access to high-quality, affordable early learning. DCFPI asks policymakers to preserve all existing funding for child care, including local child care subsidy dollars, TANF funds for child care subsidy, the Early Childhood Educator Pay Equity Fund, and dedicated funding from sports wagering.

Thank you for the opportunity to testify. I am happy to answer questions.