Indiana Capital Chronicle: Child care legislation coming, but pricey ideas iffy

Indiana lawmakers expect to file and advance significant child care legislation during the upcoming session, after years of advocacy from Hoosier parents, child care providers and worker-strapped businesses.

But it’s unclear how ideas with price tags will fare in a non-budget year, with leaders intent on keeping the state’s coffers firmly shut.

Sen. Ed Charbonneau, the architect of numerous expansive pieces of health care legislation, admitted he was surprised when his health-focused interim committee was tasked with finding solutions to the lack of available and affordable child care.

Sen. Ed Charbonneau, R-Valparaiso, passionately defends a health care bill on the last night of the 2023 legislative session. (Whitney Downard/Indiana Capital Chronicle)

“It certainly opened my eyes to how big an issue it is,” he told the Capital Chronicle. “… Child care is an infrastructure issue for the state of Indiana because it affects every aspect of our economy.”

He plans to carry a bill incorporating as many of the 10 recommendations as possible. Some come with a cost.

Assuaging Indiana’s child care crisis will “take money,” said Charbonneau, R-Valparaiso. But he wants the bill he files to come back clean: $0.

“I don’t want to take a chance on the bill moving along — and everybody happy — (and) it get skewered because of the fiscal impact,” he said.

But he said he believed — personally — that the bill could be among leadership’s priority bills. Leaders have said there will be fewer this session to signal a “less is more approach.”

Child care unavailable for most kids

Indiana’s 4,195 regulated child care providers can serve about 206,000 kids when operating at full steam. That’s according to data from Brighter Futures Indiana, a partnership between the state’s Family Social Services Administration (FSSA) and Early Learning Indiana.

But those providers would meet just 41% of the demand, as an estimated 502,000 Hoosier children may need child care.

And some providers aren’t running at full capacity.

Early Learning Indiana, for example, manages 13 early learning centers in Marion and Tippecanoe counties. It serves 1,000 children daily, said President and CEO Maureen Weber — but 15% of its seats are closed off as staffing challenges strangle operations.

“It’s a challenge for our bottom line and our mission,” she said.

Parents who can find open seats may encounter costs that eat up significant chunks of income.

Full-time child care costs a stunning $660 monthly on average in Indiana, according to Brighter Futures. The calculation includes all age groups; care for infants ($790 monthly) is the most expensive and drops as children age.

The average annual cost was just 6.4% of the median Floyd County household income — the lowest — and 15.8% of the median Delaware County household income — the highest.

Lawmakers last session raised income eligibility for two key child care subsidies, growing the pool of parents who qualify, and raised reimbursement rates to providers.

They also authorized expansion grants to providers alongside a new employer-sponsored child care fund and employer child care expenditure credit.

Legislative leadership has signaled an appetite for more change.

“Frankly, we’ve regulated ourselves into this problem,” House Speaker Todd Huston said at a November session preview.

Recommendations run the gamut

Charbonneau’s interim committee heard four hours of presentations, testimony and discussion in August.

Committee members and stakeholders coalesced around recommendations split into four categories.

To speed up a third-party evaluation of the child care system, the group suggested moving up the Indiana Early Learning Advisory Committee’s (ELAC) due date and having FSSA adjust its regulations sooner.

ELAC released the first evaluation on the state’s quality ratings system — with initial recommendations for new standards — in December. The second evaluation is in progress.

Courtney Hott, the director of ELAC, outlines a subcommittee on childcare workforce issues before the Early Learning Advisory Committee (ELAC) on Dec. 20, 2023. (Whitney Downard/Indiana Capital Chronicle)

FSSA’s Office of Early Childhood and Out-of-School Learning said it was “working with a vendor to develop external and internal policies that drive consistency and equity across programming types, while remaining compliant with federal regulations” and that it’s still reviewing recommendations from the interim committee and a licensing workgroup.

“The interim study recommendation accelerated that timeline because I do think there’s an urgent need to streamline the requirements for early learning settings,” said Weber, who also chairs ELAC. She was optimistic the idea would become binding and was planning accordingly.

“The new date, I believe, requires us to have that done by May 1 of next year. So it will be receiving our full attention in the first quarter,” Weber said.

To ease the system’s workforce shortage, the committee recommended making child care workers at licensed programs categorically eligible for public child care subsidies, allowing Hoosiers to seek tuition and fee coverage for child care credentials under the existing Workforce Ready Grant, and reducing certain workforce age requirements.

Indiana has previously focused largely on the demand side of the child care shortage equation, said Samuel Snideman, a vice president of government relations for the United Way of Central Indiana. The organization leads the Early Education Works Coalition.

“We can’t serve more families if providers can’t open seats,” he said. “… All the subsidies in the world don’t mean anything if there’s no place to use them.”

Samuel Snideman, the Vice President of Government Relations for United Way of Central Indiana. (Photo from Snideman’s LinkedIn)

Weber said child care workers often struggle to find care for their own children while they’re on the job. Making them all eligible for federal Child Care and Development Block Grant money or state On My Way Pre-K vouchers could help.

Snideman added that the change could entice back workers who left the industry because of their own care responsibilities or low wages.

“If the state doesn’t want to get involved in actual pay conversations around what child care workers make, it’s really important that we find ways to get and keep more money in child care workers pockets so that they can still have a decent quality of life,” he said.

To expand access in “hard-to-serve” areas, the committee proposed piloting a micro-center model, in which one “hub” handles administrative services for a multitude of small centers. FSSA should also allow background checks done at one of a provider’s locations to be valid at its other locations, and should establish mobile fingerprinting, the committee said.
And to boost data-informed decision-making, FSSA should publish a monthly data dashboard and — along with the Department of Revenue — document the outcomes of the employer-sponsored child care fund and expenditure credit. The group suggested that the Indiana Economic Development Corp. provide lawmakers updates on child care support funds associated with a major state economic development grant program and a recent federal microchip law.

Navigating price tags

Agencies can often accommodate smaller regulatory and data requests with their current staffing levels, resulting in proposals with little to no fiscal impacts.

But increasing the pool of Hoosiers who qualify for public child care help could come with additional costs.

“We’re still working on that,” Charbonneau said. “We don’t have a final — it’s still bouncing back and forth between folks. That’s one that may have to be looked at yet.”

Snideman said about half of child workers are already income-eligible for the support, and that the state typically doesn’t max out the money it’s appropriated for those programs.

Sen. Ryan Mishler thanks Family and Social Services Administration Secretary Daniel Rusyniak and Indiana Medicaid Director Cora Steinmetz for their communication on $713 million shortfall in Medicaid funding, at a State Budget Committee meeting on Tuesday, Dec. 19, 2023. (Leslie Bonilla Muñiz/Indiana Capital Chronicle)

The pilot, however, could cost more — unless lawmakers find creative funding solutions.

Charbonneau said the pilot concept was still under consideration, but similarly bouncing between groups of people.

“It hasn’t been easy to come up with the language,” he said. “But I think we’re getting close.”

Once the draft is finalized, he can submit it to the nonpartisan Legislative Services Agency to generate a fiscal impact statement.

Key lawmakers have repeatedly said they want to keep the budget closed. And a surprise $1 million hole in Medicaid funds discovered in December could cement that approach, with Senate Appropriations Chair Ryan Mishler commenting, “That’s why we have a budget every other year.”

“There’s been a philosophical decision to not do anything, supposedly, that impacts the budget this session from the majority party. I don’t know that we’ll be able to make much of a dent this year, although it is truly a crisis for our state, for our families and for our economy,” said Rep. Carey Hamilton, D-Indianapolis. She’s the House Democratic caucus’ point person on child care.

She said she would continue to support a child care tax credit, although House bill filing rules mean that could come in the form of amendments.

Is this the year?

Charbonneau emphasized the unanimous approval of the 10 recommendations by representatives of all four Statehouse caucuses and the collaboration with a range of stakeholders during drafting.

“I hate to say: hopefully this goes without a lot of significant opposition. I don’t know what the opposition would be,” he said.

Maureen Weber. (From Early Learning Indiana)

Advocates were hopeful.

“I’ve heard from legislators who are definitely aware of those recommendations and I am optimistic that we’ll see language around all of those things,” Weber said.

But, she said with a laugh, “I’ve been wrong before — I’m optimistic. I didn’t say I’m certain.”

Snideman, for his part, called himself “perhaps pathologically optimistic” for anticipating substantial bipartisan support.

Others were more skeptical.

“I hope we can start to really move the needle. I don’t see it happening this year, unfortunately,” Hamilton said. “In the next budget cycle, we need to make big steps forward if it’s not going to happen this year.”