Improvements Needed for the Early Childhood Educator Pay Equity Fund

Chairperson Mendelson, members of the Committee, thank you for the opportunity to testify. My name is Tazra Mitchell, and I am Chief Policy and Strategy Officer at the DC Fiscal Policy Institute (DCFPI) and an Executive Committee member of the Under 3 DC Coalition (U3DC). 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 commends the Office of State Superintendent (OSSE) for making bold progress on fair pay for more than 3,000 early educators, most of whom are Black and brown women, over the last year. In April, OSSE submitted to Council the parameters they will use to disburse Pay Equity Funds (PEF) to child development facilities (CDFs).^[1],[2] DCFPI is deeply concerned that OSSE’s funding formula deviates from the recommendations of the Early Childhood Educator Equitable Compensation Task Force (the Task Force), reducing average pay by up to $6,700 for early educators.^[3] DCFPI, however, supports OSSE’s decision to factor anticipated administrative expenses into the formula and to make eligibility for equity adjustment funds contingent on CDFs’ participation in the child care subsidy program.

DCFPI encourages the Council to work with OSSE to make the following improvements to the funding formula and evaluation process:

• Redesign the formula to reward experience: Calculate the base award as the difference between average salaries in the new salary scale and the average current salaries for each eligible role, rather than as the difference between minimum required salaries in the new scale and average current salaries. Pegging the base award to minimum salaries means that, on average, CDFs will only receive enough funding to pay teachers entry-level salaries, regardless of their years of experience.
• Protect against supplantation: Require CDFs to use 100 percent of the base award to raise salaries for eligible roles by including a supplantation prohibition in PEF contracts. This would ensure that CDFs allocate maximum funding to higher pay for eligible roles.
• Improve the evaluation process: Require OSSE to include more detailed data on how CDFs are using PEF dollars in the report they must submit to the Council next February.^[4] One data point that OSSE must report on is staffing costs associated with applying the early childhood education (ECE) salary scale. When OSSE reports on these costs, they should publish the share of the base award and equity adjustment dedicated to higher pay for eligible roles, independently and overall, by facility type, and by status of subsidy participation.

These recommendations would better position OSSE to fulfill the promise of the Birth to Three for All DC Act (B3A), the blueprint underpinning the PEF, and build towards a racially-just early education workforce and system.

The PEF Funding Formula is Out of Step with the Task Force’s Recommendations and the Birth to Three Law

Most of OSSE’s proposed parameters for the next phase of PEF payments are in lockstep with the Task Force’s recommendations, including a formula with a “base award” built on the number of eligible teachers and assistant teachers per facility; funding to cover new administrative costs associated with raising salaries; and an equity adjustment targeting additional funding to CDFs participating in the subsidy program in order to offset historical economic harm.

The biggest deviation from those recommendations and the B3A, and a major flaw, is OSSE’s decision to peg the base award to minimum required salaries, rather than average salaries in the new salary scale (or Step 5, as defined by the Task Force).^[5] This is possible because the PEF law that Council drafted and approved gives OSSE the discretion to build a formula based on minimums.^[6] The result is that OSSE will, on average, only provide CDFs enough funding to meet educator salary minimums at the bottom of the scale—that is, the pay intended for those with zero years of experience in the field. This limits the ability of participating CDFs to pay eligible educators based on credentials and experience, which was the intent of the B3A.

A design based on minimum salaries shrinks educators’ pay, on average, by between approximately $3,900 to $6,700 in fiscal year 2024, compared to one based on average salaries, or Step 5 as the Task Force recommended (Table 1). For a teacher living in a fair market two-bedroom unit in Marshall Heights in Ward 7, $6,700 is enough to cover more than 5 months of rent.^[7] This reduction undermines Black and brown early educators’ economic security, particularly as DC requires them to meet new credentialing requirements by December. The reduction also undermines efforts to dismantle the racist legacy of underpaying early educators compared to DC Public School teachers. Importantly, by failing to incorporate experience into the base award, the PEF law and OSSE’s formula is out of step with the vision set forth in the B3A, which mandated parity and defined it as “compensation equivalent to the average base salary and fringe benefits of an elementary school teacher employed by District of Columbia Public Schools with the equivalent role, credentials, and experience.”^[8]

This design works against efforts to retain staff and reward them for the value they bring to our early education system. Such shortcomings reiterate the importance of the DC Council protecting the non-lapsing status of the PEF and ensuring adequate funding to reward experience in future years. This would enable OSSE to redesign the base award to follow the recommendations of the Task Force and implement the intent of the B3A.

DCFPI commends OSSE for recently announcing that they will adjust the base award each quarter to reflect staff changes and growing credential levels among early educators.^[9] This will better position CDFs to adapt to changing costs and/or growing minimum salary requirements in a timely manner.

DCFPI Supports OSSE’s Design for the Equity Adjustment

OSSE’s formula includes a strong equity adjustment, which provides additional funds on top of the base award to CDFs serving families with low and moderate incomes enrolled in the child care subsidy program. A CDF’s equity adjustment will be calculated by multiplying the share of total licensed slots comprised of subsidy slots by 40 percent of the base award. For example, a CDF that fills all its licensed slots with subsidy vouchers will receive an equity adjustment equal to 40 percent of their base award; if the share of filled licensed slots drops down to 50 percent subsidy, the CDF will receive an adjustment equal to 20 percent of their base award.

Providers predominantly serving families participating in the subsidy program need more funding to offer pay parity and high-quality care because they face ongoing and historic inequities that force them to operate on tighter margins. Families with low incomes are eligible for vouchers that they can use at licensed providers, but the reimbursement rates providers receive from OSSE have historically been insufficient to cover the cost of everything that goes into providing high-quality care.^[10] This includes fair pay for a skilled workforce, rent on valuable ground floor levels, licensing requirements, utility bills, nutritious food, supplies like diapers and toys, and more. Because providers can only charge what families can afford, they cannot rely on parent fees to pull them above water or contribute more to higher pay for educators.

The additional funding resulting from the adjustment may also incentivize additional subsidy participation among CDFs, which would increase the supply of high-quality slots for DC’s most vulnerable children. OSSE should evaluate outcomes associated with the equity adjustment to ensure the program is meeting its intended equity goals, and refine the 40 percent threshold, as needed, over time.

OSSE Should Take Additional Steps to Strengthen Teacher Pay, Protect the PEF

Teachers and teacher assistants are the intended beneficiaries of the salary provisions of the B3A and PEF laws. Until lawmakers expand benefits to other staff in CDFs—an expansion that DCFPI supports—OSSE should require CDFs to use 100 percent of the base award for higher pay for eligible roles by including a supplantation prohibition in PEF contracts. This would best ensure that CDFs allocate maximum funding to higher pay for eligible roles, particularly given the base award formula shortchanges salaries for more experienced educators, on average, compared to the Task Force’s recommendations. One exception could be to allow a small portion of the base award to cover costs associated with hiring a substitute teacher who covers a classroom for an eligible educator taking time off. The additional funding set aside for administrative costs should make it possible for CDFs to implement this proposal.

Also, the Early Childhood Educator Pay Equity Fund Amendment Act of 2022 requires OSSE to submit to Council robust triennial reports beginning next February.^[11] One data point that OSSE must report on is “staffing costs associated with applying the ECE salary scale.”^[12] When OSSE reports on these staff costs, they should be required to publish the share of the base award and equity adjustment dedicated to higher pay for eligible roles, independently and overall, by facility type, and by status of subsidy participation. This will help lawmakers assess how well the funding formula is getting higher pay in the hands of eligible educators.

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