District of Columbia Council Budget Oversight Hearing: Committee of the Whole

Testimony of Kathy Hollowell-Makle, Executive Director, DCAEYC

District of Columbia Council Budget Oversight Hearing: Committee of the Whole

June 3, 2021

Chairman Mendelson and members of the Committee, thank you for the opportunity to provide testimony. My name is Kathy Hollowell-Makle, and I am the Executive Director of the District of Columbia Association for the Education of Young Children (DCAEYC). DCAEYC advocates on behalf of young children, families, educators, and community organizations to assure high-quality early learning for all children, birth through age eight. Today, I will focus my testimony on the District’s plans to use federal American Rescue Plan Act (ARPA) funds to stabilize and support our city’s early care and education (ECE) workforce.

The COVID-19 pandemic has made abundantly clear the critical role that ECE educators play in supporting our city’s working families. The public health crisis has severely impacted the District’s ECE educators, who are simultaneously not generating enough revenue to meet their basic operational costs and incurring additional pandemic-related expenses, while managing staffing shortages and navigating new COVID-19 regulations. As we emerge from the pandemic, we must do everything we can to preserve and rebuild the early care and education sector, which is essential both to the District’s economic recovery and the development and education of our infants, toddlers, and preschool-aged children.

This begins with strategic efforts to stabilize the ECE workforce.

With the passage of the ARPA, there are two sources of relief funding that could be readily applied to supporting the early childhood workforce – (1) the $24.9 million in discretionary Child Care and Development Fund (CCDF) allocations that were recently allocated to the Office of the State Superintendent of Education (OSSE) from the U.S. Department of Health and Human Services and (2) the over $3.1 billion in Coronavirus State and Local Fiscal Recovery funds allocated to the District from the U.S. Department of Treasury. DCAEYC offers three recommendations to use these ARPA funds to meet the needs of the ECE workforce and District families with young children. They are as follows:

1. Invest the $24.9 million of CCDF discretionary funding to address staff compensation and provide access to child care subsidies for more working families.

2. Allocate $60 million in recurring local funding to the child care subsidy program to cover livable wages for staff, the true cost of providing quality care, and adequately support ECE educators post-pandemic; and

3. Spend $39.7 million of the District’s Coronavirus State and Local Fiscal Recovery Funds to temporarily supplement wages of the ECE workforce by offering “premium pay.”

Please allow me to provide additional detail on these recommendations.

Use the federal funding as a down payment for the Birth-to-Three Law, sustained with local funds

The District’s Birth-to-Three Law outlines a clear vision for equity, affordability, stability, and resilience of our city’s early childhood education sector. However, OSSE’s current plan for boosting workforce compensation as required by the law falls short and is based on unrealistic cost assumptions. The current cost modeling assumes a $15 per hour wage for child care educators, which is not a livable wage for a District resident. For example, cost-of-living data compiled by researchers at the Massachusetts Institute of Technology found that a single adult in DC without children needs to earn a minimum of $20.10/hour, and families with two working adults and two children in DC need to make about $25.63/hour to be able to cover basic family expenses. The $24.9 million of discretionary federal funding can act as a down payment on increased wages for the ECE workforce.

In addition, this funding can also be used to expand eligibility for working families. Given the high cost of living in the District, this expansion would allow more families to have access to high-quality early care and education programming for their children.

Ultimately, the one-time federal funds will not be adequate to sustain the structural changes needed to rebuild our ECE system. The FY 2022 budget is an opportunity to build back better by adding $60 million in recurring local funding to the child care subsidy program.

Offer premium pay to child care educators

The District is also receiving $2.31 billion in Coronavirus State and Local Fiscal Recovery Funds from the U.S. Department of Treasury ($1,802,441,116 state allocations + $137,083,470.00 county allocations + $372,859,344 metropolitan city allocations). These funds, in addition to the $755 million allocated to the District to make the city whole after the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), amounts to $3.1 billion in funding. These resources provide substantial flexibility for the Council, in collaboration with the Mayor, to meet our local needs, including support for households, small businesses, impacted industries, essential workers, and the communities hardest hit by the crisis.

These funds provide the District with an additional opportunity to temporarily supplement wages of the ECE workforce by offering “premium pay” to essential workers as part of an effort to stabilize and promote economic recovery. Given the significant risks that child care educators have faced to operate during the pandemic, child care educators are categorized as essential workers. The guidance also states that “any premium pay or grants provided using the Fiscal Recovery Funds should prioritize compensation of those lower income eligible workers that perform essential work.”

As the District is already struggling to maintain its current ECE workforce due to the COVID-19 pandemic, the District should offer six months of premium pay—directly or through grants to private employers—as an incentive for ECE educators to return to programs. Premium pay is defined in ARPA as “an amount up to $13 per hour in addition to wages or remuneration the worker otherwise receives and in an aggregate amount not to exceed $25,000 per eligible worker.” Assuming an estimated annual average salary in DC of $31,949, six months of premium pay at $13 per hour would not exceed the 150 percent threshold. This would be a salary increase of $13,000 per worker, for a total of $39.7 million, or about 1.3 percent of the State and Local Fiscal Recovery Funds (including CARES Act additional funds).

These changes will support the District’s recovery while supporting and stabilizing the ECE workforce. Thank you again for the opportunity to testify, and I would be happy to answer any questions from the Committee.