Bill seeks to increase eligibility, cap copays for families receiving child care scholarships

A bill from Rep. Alice Buckley, D-Bozeman, that has bipartisan support and was heard in committee on Tuesday aims to provide an estimated additional 1,000 children in Montana with Best Beginnings Scholarship program eligibility to offset child care costs for low-income Montana families.

House Bill 648 puts the Best Beginnings program into statute, increases the eligibility from 150% to 200% of the federal poverty level, caps copays parents would need to pay for their child to be eligible on a sliding scale for families making more than 100% of the federal poverty level, and changes how the Department of Public Health and Human Services pays rates for each child on a scholarship to child care providers.

The bill received no opposition during its initial hearing Tuesday in the House Health and Human Services Committee. But a dozen people spoke as proponents of the bill, including representatives of the Montana Chamber of Commerce, Zero to Five Montana, Raise Montana, Sibanye-Stillwater, the Montana Nonprofit Association and the Montana Budget and Policy Center.

“This investment in child care is a win; I think you already know that. And it helps families gain access to child care for their children and also more security in their work situation,” said Liz Moore, the executive director of the Montana Nonprofit Association. “We all agree we want Montanans to experience the good life. We don’t want anyone to be left out of that, and this is one way we can build a bridge to that opportunity.”

The Best Beginnings Scholarship program has been in place for 30 years but needs changes as wages increase along with the cost of child care, Buckley told the committee. The scholarships are available to families at or below 150% of the poverty line as of the start of the year after the eligibility cap was raised to 185% during the COVID-19 pandemic.

The program helps pay for child care when parents are at work or at school, for teen parents in high school and if parents or caretakers are receiving assistance through the Temporary Assistance for Needy Families program.

There are some eligibility criteria attached to the program. Two-parent families have to work at least 120 hours a month, and single-parent families have to work at least 60 hours a month to be eligible for the scholarships. If parents are going to school or attending training full-time, there is no work requirement, but if they are doing so part-time, there is a work requirement based on their education or training.

In addition to raising the eligibility income level to 200% of the federal poverty level, Buckley’s bill seeks to cap copayments at $10/month for families under 100% of the poverty level. For families making 100% of the federal poverty level up to 200%, their copayments would be based on a sliding scale capped at 7% of their monthly income.

Under the proposal, DPHHS would pay the facilities caring for the child or children based on a child’s enrollment and the monthly authorized amount determined by resource and referral counselors – based on how often the child needs care rather than on a child’s attendance, as is currently the case, Buckley and proponents said.

Meghan Ballenger, the executive director of Raise Montana, which contracts with DPHHS to serve as a resource and referral agency, said the cap on the copayments would prevent families who are currently paying up to or more than 14% of their monthly income for child care from having little-to-no disposable income after paying their rent or mortgage.

And she said the changes to how DPHHS would pay child care facilities would keep those facilities from receiving less money each month if a child has to miss three or more days of attendance in a month, which currently leads to the facilities eating the difference or charging the family of that child more.

“Child care providers provide the service that allow parents to work and stay, or become, self-sufficient, and therefore are key to any effort to reduce reliance on future ongoing financial assistance and support self-sufficiency among low-income families,” Ballenger said. “… Child care is necessary infrastructure for a healthy economy and we need your help in making it work for our workforce.”

Heather O’Loughlin, the executive director of the Montana Budget and Policy Center, explained that the current 150% of the federal poverty limit cap puts that at about $38,000 annual income for two-parent households and about $15 in hourly wages for single parents. She said the current cap is forcing some people to decline extra hours and pay increases just so they have their child care payments supplemented by the state and can afford the rest.

Additionally, she said, as someone’s income goes up, the current structure incrementally raises the copay amounts, and some people are paying 15% to 20% of their monthly income if they are on the upper end of the scale – hundreds of dollars and sometimes in places where the average rent can be nearly three-quarters of their monthly wages.

She said a single parent making $14 per hour would see their copay decrease from $320 per month to $85 per month, for instance, under the measure. Families between 140% and 160% of the federal poverty level currently pay from $322 to $446 a month in copays, but that would drop to $107 a month under the measure, and families in the 180% to 200% federal poverty level range would see their copays drop from $700 to $800 per month to $200 to $240 per month, O’Laughlin told the committee.

“This is really a workforce bill and really helps families that are really trying to access and afford child care to be able to do that and take those extra hours, or that pay bump, and still be able to stay in the workforce and access child care,” she said.

The bill seeks to appropriate $10 million in general fund revenue to DPHHS annually to fund what the department would pay child care facilities beyond the copays.

A fiscal note on the bill said the program would serve 993 extra children’s child care services on top of the 2,894 who are currently eligible if the eligibility was bumped from 150% to 200% of the federal poverty level, with an average monthly cost of care of $786 per child.

Subtracting offsets from copays, the bill would cost an additional roughly $9.04 million to administer with the added eligibility on top of the money the department already receives in federal Child Care Development Block Grant awards. Human Services Executive Director Erica Johnston, who testified as an informational witness, told the committee the most recent block grant award was $43 million and that it had historically been about $34 million during the past six or seven years.

The current general fund allocation in House Bill 2 for the Early Childhood and Family Support Division, which administers the Best Beginnings Scholarship program, is $12.4 million for the next fiscal year and $12.6 million in FY2025. An amendment to HB2 requested by Rep. Mary Caferro, D-Helena, that would have appropriated an extra $9 million each of the next two fiscal years to the Best Beginnings Scholarship program was shot down Tuesday, the Montana State News Bureau reported.

The House Health and Human Services Committee did not take executive action on Buckley’s bill on Tuesday.