Aging & Legislative Affairs- House Children & Youth Subcom.

All right, Chair calls this meeting to order. We're going to pass over the approval of the minutes from the October 10th meeting for now. We're going to move on to item C on the agenda. Ms. Williams, yeah, you're here. You can approach the table and state your name for the record? Is the green light on? It is now New buttons up here. I haven't been here obviously for a minute. Thank you so much, uh, chairperson, and thank you to the committee for having us. Thank you for having a whole discussion about early childhood. We believe that's very important in the office of Early Childhood. I'm Tanya Williams, and I'm the Assistant commissioner at the Department of Ed for Early Childhood, very specifically. So thank you for being here and you're recognized to present. Yeah, so as you can imagine, there have been a lot of things happening this past year with the passage of the Learns Act, uh, there are 6 pages dedicated to early childhood. Let me see if that's get this a little better. Is that better? OK. Um, one of those was moving the former division of childcare and Early Childhood Education at DHS over to the Department of Ed. We have physically transferred the central office staff that were at Main Street. Um, and if you county staff in Pulaski to two Capitol Malls, so we're very close now. Um, we've been there for a little over a month. Um, I wanted you to sort of see the structure of what we're doing because, and I'm not gonna go into details, but it's really more about the fun. of the office and not the program. I think before we operated more about. The program area or the funding. So we had staff doing ABC programming. We had staff doing childcare development block grant, and we've unified that into, it's in the services and operations, so everywhere where we serve children directly where we actually pay for childcare or early childhood education is in that services and operations. So this org chart and this org structure is really about the functionality of the office and we hope that it will help both providers as well as families as we move forward and continue with our alignment work. Sort of restructuring and, and I will say it's a lot of change and, and with change and staff, it can be challenging, um, and so we're just trying to keep, keep everybody on point about what we're trying to do. I mean, I think essentially it's about helping, uh, children and communities and families be ready for children to come to school. Because I always say kindergarten readiness is not just about children, it's about communities being ready. It's about that school being ready too. So we think about it pretty global. But we hope to structure and this org, um, organization reorganization will help us with the alignment to what we're trying to do in the Las Act. I'm gonna spend some time on a couple of very specific initiatives in the Learns Act, um, that have been happening very rapidly, I think, for, uh, those of us in state government, and this one is really about local leads. So in the Lans Act, there's a section about unifying early childhood and the Office of Early Childhood Funding, a local entity to really start to look at how the infrastructure locally is working for early childhood and business and industry and families. So, I think I was here last year after we had funded cohort one and the map was pretty slim at that time, and I know a lot of people ask questions about that at that meeting, and we're very concerned about their areas. I'm really excited to let you know that this represents both cohort 1 and cohort 2, which covers really 64 counties in the city of Little Rock. We have a 3rd request for proposals out right now that is due back at the end of the month to cover those counties that are Maybe white or grayish in color. Um, and that's those remaining 10 counties and the rest of Pulaski County, if that makes sense. The city of Little Rock is doing Little Rock proper, but we want to make sure that we have the, uh, county covered and so we'll be looking for an application for that area as well. Um, we have 21 entities right now and they are covering about 65 counties including the city of Little Rock. And we will announce the, uh, awardees, um, for the cohort 3, probably the 1 or 2nd week of October, once we get approval for that. So we'll announce that and show the coverage for the state and it will update on our website, and you'll have the contacts. We have a page on the website for the Office of Early Childhood at the Department of Ed that has local leads and it has the contact information for all of these areas, how to reach them by email. So if any of you are interested in your respective areas and want to who's doing the work in your community. Um, I will tell you we're really early in the work and they are meeting their initial work has been about bringing in the early childhood world and starting to develop relationships with them. They are doing child counts to see if we can establish an unduplicated camp for where children are being served to help us identify and be strategic about building out capacity in communities. Um, they are working on a collaborative plan that's really about their work with the early childhood. Professionals and providers in their community. But then essentially we'll be building out a strategic plan for their community or their respective areas. Some of these are a city, um, we have a couple of school districts, we have several that are doing multiple counties, so they all look a little bit different. And Jennifer Douglas on our team, um, is leading this work at the state level and she will say, um, no, two are the same. They all look very different and for obvious reasons that you all know, every county, every community. Looks a little bit different and so we want to be respective of that, but they're bringing people to the conversation that maybe have never been a part of that conversation to help us think about the work that we do at the state level that can better support those local communities and early childhood, um, and this whole business industry component of it, um, as part of that strategic plan is how do we work and engage? The business community because we know that it's all part of the economic development structure for our state. We need the early childhood, we need it to be high quality, um, we need it today for the families who are currently working to be able to go to work and do their jobs, but we need to build that for the future workforce as well. Just a moment on a new tool and I was talking to Representative Springer. I know she's had some constituents that have had questions, but we have for in Arkansas for many years used a tool to do program assessment called the Environment Writing Scale. Um, I would stand here as an early childhood professional and tell you it's a wonderful tool. It's a, a tool used in a lot of national research. The Learns Act asked us to look at a tool that might be more predictive of child outcomes, and that's not to say that ERS would not produce child outcomes, but There's a lot of research that's happened since 30 or however many years the state's been doing that as well before I came here. Um, the tool that we, and there aren't that many tools, and at the time, there wasn't another tool when Arkansas chose that one, so that's why that one was selected many years ago. Um, and it really looks at the environment. It looks at the interactions in those classrooms, but it also looks at some of the environmental things. Um, I have heard over the years many, um, complaints or concerns about the environment writing skill. I've always tried to work with communities and programs about that. This tool, and I just was summarizing it in a nutshell. The difference between the two. The class tool is really about the teacher and the interactions of the teacher with that child. And that's really important because there's incredibly good research evidence that that is probably the most predict one of the most predictive, uh, parts of a high-quality program and good child outcomes. So those teacher interactions, it also looks at the teacher in that classroom and what she's doing, how she's organizing her classroom and how she's implementing curriculum and activities for the day. So I feel like programs are going to have more control. The teacher has more control over what's happening rather than the environment controlling the score. It is a scoring at scale just like ER the environment writing skill is. But this is the tool we are piloting right now. We are starting that piloting. We've been doing training since really last fall. Um, I would like to share that I have probably more than a dozen staff and it is a very rigorous process to go through the. Training and then you take a test. Um, I've heard many of my colleagues who've been working in early childhood for a while, say, I didn't pass the first time. So you have to get certified on this tool. And so, I think it's my staff are passing it. I'm really excited. I think it's because they're not trying to unwind any pedagogy that they may know or practices that they've been doing in their classrooms, but we are moving, I think we're going to have about 74 certified observers, um, within the next couple of weeks. Uh, we just had a team go through and I've seen some, some of my team that have passed it, but we're just building out this whole team of people. Ultimately at the end of this, the program staff will be trained. So your program leader, your director will be doing the observations in her program. We will come alongside if this is a tool that we choose and do a state observed from an outside once a year. So they'll do one of their own. We want them to own this. The teachers, their staff, their building leadership, and then the state would have or the local lead will have someone that comes in and does an external. So that we can see and compare how that looks. So, but right now we are in the piloting. We are piloting in cohort one of local leads, all of those programs that we're going to be up for a review this year, um, unless they're wanting to level up and better beginnings. They, they voluntarily chose that. It's their choice. And so we've got, I believe about 238 programs that we will start doing reviews on any day. Um, we have a lot of people doing practice reviews right now to make sure that they, once they've passed, that they stay in practice. Um, but it's a really exciting tool, and I encourage you, you can go out and Google. There's some, uh, free videos that you can observe if you're really interested in that and happy to pass on any of the materials if you have an interest in it. I wanted to share because I think really before the pandemic, but certainly during the pandemic, there was a lot of discussion about the importance of childcare and early childhood. And we did a lot of work. We have a lot of data as you can imagine in the Office of Early Childhood about the number of programs that are licensed in the state, the quality of those programs. Um, and so we were watching during the whole pandemic because we didn't shudder like some states in Arkansas. We had schools that closed but not early childhood as a whole. So our programs were operating the entire time. They had intermittent closures sometimes if there was a, a child or a staff with COVID that the health department recommended, maybe they showed her a classroom until everyone's well, but we were open really essentially the entire time. So I was tracking openings and closures, but I wanted you to see because I felt we, we've definitely come out of that from our perspective. Um, in August of 2022 to August of 23, we approved 161 new licenses over the state. Across the state with the capacity of 14,201 children. There were 31 entities who closed their license permanently. So sometimes schools will move a classroom down the hall and it'll be a new license, but it's just a, it's really just essentially, uh, A pass there, it's equal, but these are programs that actually closed and their capacity was 2,7706, but we had a net capacity gain of 11,495 slots. August of 23 through August of 24, we had 105 new licenses approved with the capacity of 11,124.4 licenses closed last year permanently with the capacity of 261. And again there, I, I point that out because they're We are opening facilities across the state all the time. I think what's really more important about this data, this is very high level data, but it's really drilling into this data to know, is this in all the right places? Just because we had that many doesn't mean it meets the needs in every single community. And we also have to think about, we have communities that are very rural. I grew up in Newton County and so there's some very rural population areas that you probably couldn't open up a center. But a family child care home might work perfectly in that community, on a much smaller scale. So I think it's drilling into these types of, um, data sets that will really help us be more informed and intentional. About the work. So I wanted to sort of end on this and share, uh, because I don't know that this has gotten a lot of play, but Arkansas was ranked number 1 for the 3rd year in a row. Not for one part of its early childhood system. Pre-K has a lot, we, we have a lot to be proud of for our Arkansas Better Chance program in the state. And we do get a lot of accolades. This is for our early education system, and this is the 3rd year that WalletHub has ranked Arkansas's number one. I share that because they look at 12 metrics, they're looking at Across many early childhood pieces, um, of what our work looks like, our policies, our pre-current state investment into pre-K is one of them. But it's also how we use our federal investments and how we have policies in place to do that work. So one area, because I never set out to be, you know, this will sound crazy, but number one, like you're doing the work and you're trying to improve the work all the time. So I'm always thinking about improvement. And so access, I, I wanted to dig into the report, like, what could we improve on? And it's access, which is no surprise, right? It's probably why we're here today. How are we getting more children in programs, um, particularly infant toddler care is a gap and school aged care in just about every community in the state. But there are some real deserts um in some parts of the state for infant care specifically. We have pre-K slots in every county, but not infant toddler care. So I'm gonna stop there. We are Working on a strategic plan with the subcommittee of the State Board of Education focused on early childhood, and I hope to share that at some point. Um, but it is really focused on access, quality, and our workforce. So I will stop there and see if there are any questions and then I know we have a very full agenda. Well, thank you. I believe Vice Cha Springer has a question or two. Presenter Springer recognized. Uh, thank you, Mr. Chair and thank you once again for being here this afternoon. Uh, we go way back. Uh, I just wanted you to, uh, share with us those um 12 key metrics that allowed you to be ranked number one so that I can, we can all be aware of what those things are you named a couple of those, but I just would like for you to share the memorized, uh, this is a pretty new thing for Arkansas. The first year that we got the recognition, I believe I was at DHS and Kessa Smith sent it to me and I said that's got to be a. I think it's for the Department of Ed, not for us. But then I realized it was really a much broader, but I'll get you those 12 metrics at Reperton Springer. I, I did list a couple of them on there, um, but it does have to do with the policies and the way we implement or administer our federal childcare block grant and how we coordinate services across early childhood between Head Start and ABC and our childcare development block grant. Thank you. Seeing no more questions, Ms. Williams, thank you for your update. Next on the agenda is Mr. Ann. All right, here you go. Alright, Mr. Ann, please say your name for the record. Yep. My name is Angela Duran, and I am with Excel by 8. And you're recognized to present. Thank you. So yes, I am with Excel by 8, which is a network of hundreds of individuals and organizations from around the state who are interested increasing health and education outcomes for young children. We build local models for change. We identify and try to work with legislators and other policymakers to resolve policy barriers, and we really focus on trying to develop a public understanding of early childhood development. As local steering committees in some of our Excel by 8 communities identified the biggest barriers in their communities related to young children and families. The lack of affordable, quality care, especially for infants and toddlers like Tanya was just talking about, kept coming up over and over. Several years ago, we formed a task force of local and regional chambers of commerce and economic development entities, and also some philanthropic organizations to take a look at the challenges within the childcare market and to make recommendations for addressing those challenges. What began as a task force has now grown to a statewide business coalition with over 75 members. As you can see by the map, it's very diverse in terms of geography, but also in terms of economic sector. We have Saint Bernard's up in Jonesboro. And then we also have Toro Intimidator, a lawnmower manufacturer in Batesville, as well as Pilgrim's Pride and the Queen and Nabholtz and Conway. We've also got the Hot Springs Women's Leadership Alliance, and all kinds of other small and large businesses around the state. What these businesses have figured out. is that there's a childcare crisis in Arkansas. And it can be solved with a pretty simple math equation. As you can see here, strong families and strong businesses will make a strong economy for Arkansas. So let me break down each part of the equation. So we know that families really need two things when it comes to childcare. First, as many of y'all know. We know that the most brain development happens in the 1st 3 years of a child's life. So parents need to know that their kids are in a quality childcare setting while that brain development is happening. But Only 15% of working families can find quality care for their infants and toddlers in the state in some in some counties, it's even, even lower. Second, Child care is expensive. At the median price point in the market, parents are paying about 6000 or $7000 a child. If they want higher quality care, it's closer to $10,000 a child. So if you have an infant and a toddler, and you're paying for childcare, you're going to be paying anywhere from 15 to $20,000 a year, which is a pretty significant chunk of the income of the median wage earners in the state of Arkansas. So let me talk about the employer part of the equation. The lack of access to affordable quality care is a recognized and growing threat to workforce recruitment and retention. Our state's workforce participation rate is at record lows. 34% of our Kansans say they or someone in their household either had to leave a job, not take a job, or had to greatly change jobs because of childcare challenges in the last 12 months. And if you look at Gen Z, so those youngest workers who are in their twenties. They place a very high value on child care as a benefit over half, in fact, 57% of Gen Z workers would take a pay cut if their job offered childcare as a benefit. Child care provides a clear return on investment for employers. When childcare benefits are provided. Employee satisfaction improves. Absences go down. Turnover goes down. And these kinds of benefits make employers who provide them very competitive among their peer companies. Finally, because the childcare crisis is impacting families and businesses, it's also hurting our economy. The state loses about $1500 in income and sales tax revenue for every parent that's not in the workforce. And annually, the childcare crisis in Arkansas is costing us almost $900 million and lost tax revenue and in lost revenue for businesses. So to summarize our equation, If families can have access to. Affordable, quality childcare. Their children will be on a trajectory to academic and career success. And the financial situations of these of these families will improve as well. Businesses bottom lines will improve and the state's economy will grow. So what can we do? As a state to help solve this equation. We do have some things, some investments that have been made in recent years, um, when the American Rescue Plan dollars came in. Tanya's shop was able to put a lot of money into improving quality, um, and increasing the number of slots around the state, as evidenced by some of the things Tonya just shared. Um, they've also been able to increase the rates that they're paying childcare providers so they're more in line with the cost of care, of the cost of quality care. There's also an existing sales tax or an existing tax credit on the books, um, which incentivizes businesses to open their own childcare centers, um, on their, on the side of their business. So this really shows that there has been An interest in state policy in supporting child care employers' investments in childcare. But what we found is at least so far this particular tax credit hasn't had much uptake, mostly because employers say we're in the business to make lawnmowers or to take care of people's health care. We don't really want to run a childcare center. But they, as we have learned, there is a growing interest to help their employees cover the cost of care. And so our business coalition has been thinking of ways that we could use policy to incentivize that. One idea that's being tossed around is building on something that exists already at dependent care assistance plan and incentivizing employers for making a contribution to those accounts and it would set things up in a way that the employer, state government, and the employee are all working together to to cover the cost of care. Another idea and we've seen some employers that are doing this around the state right now is to basically purchase slots at a local provider or a set of providers in that community, um, that are reserved for their employees so something may be close to their place or that has, um, hours that are in line with the shifts that they offer, etc. So that's another thing that we can incentivize, um, through tax credits. And then the last idea, um, is right now. The teacher retirement system, if you are a pre-K teacher who works for a local school district, you can participate in the teacher retirement system. But childcare, uh, workers who work in a nonprofit or a for-profit center do not have access to the teacher retirement system. So one idea is to open up a class of educators, so it lines up with what the teacher retirement system is about, um, that would allow their the centers to join as an employer and provide that benefit. There wouldn't necessarily Be a state match, but it would at least be a vehicle that those employers might otherwise not have access to. Thank you for your time. Are there any questions from committee? Thank you for your testimony. Oh, there is a question. All right, Representative Ray, you recognized. Thank you, Mr. Chairman. Um, I appreciate your presentation. I've got several questions if the chair will permit me. So, um, I have a seven year old daughter and a 4-year old son, so I'm. Not very far removed from the sticker shock that came with this whole experience. Um, My, my first question is just about the business coalition, is that made up of companies that are currently offering. Uh, child care to their employees or is that just a coalition of businesses that is, that are interested in this issue. Um, one of the newest members that just joined is Farmers Bank and Trust from Blighville, and they just did an assessment and figured out they had 10 number of employees, um, who needed care and they said, let's look at the budget. Let's see if we can do this. And they're like, yeah, we can do it. We're going to provide childcare for these employees so we don't lose them. OK. My next question is about, um, something that wasn't in your presentation, but I'm sure you're familiar with, which is the dependent care FSA. So when I was Confronted with the, the sticker shock of childcare for two kids at the same time, I thought, um, I, I started researching this and came across the dependent care FSA and found out that it was available to state employees. That saved about 30% through, through taxes on the cost of that. How do you view, so a couple of things on the dependent care FSA. How do you view that as a solution to solve this? Number 12. I'm not, I just was trying to do some quick searching on my computer. I'm not sure is that something that employers offer or is that something that the federal government offers that anyone could sign up for. So I mentioned the dependent care assistance plan, so that's one of the tax credit ideas we're looking at is for employers to make contributions. So that is a federal vehicle. Um, through federal tax law, but it is, uh, but it is something that employers have to offer and there are benefits companies in the state of Arkansas that offer those just like other benefits. I will say one, On one limitation to them, but we're trying to work with an existing vehicle because it would make things a lot easier to administer as they're capped at $5000 right now. And that's a problem we should, we should petition Congress to increase that to at least 10,000. I'm serious. No, and there have been several pieces of federal legislation to do just that. None of them have moved yet, but yes, I agree with you. So, um, I do think we should, we should look into that because Congress is going to have a debate in the upcoming year about what to do with the, the 2017 tax, tax cut provisions that could fit neatly into that debate. Um, So, uh, this is just a note maybe for the chair and whoever else is working on this issue, I mean, that was such a tremendous benefit for. Um, us affording child care, I mean, I think the state and every other employer in Arkansas that offers this ought to make a concerted effort to make young parents with young children aware of this. Benefit because it, it makes about a 30% impact on the price of childcare, um, the, the next thing I want to ask you is. I is this just a, I mean, I, I think y'all are in Arkansas based organization, right? Is this a uniquely Arkansas problem or is everyone experiencing this problem. It seems like everyone is. Yeah, I mean the cost of care is definitely an issue nationwide, um, and, and, and the lack of infant and toddler care is also a problem that you see around the country, so, um, and there are some examples of other states. I mean, we've tried to look for ideas in other states or what they're doing and there are some business coalitions. Coming together in other states as well. And then last can I ask one more thing. This is the last question I promise. OK, so, um, last question. I, you mentioned, and everybody that I've heard talk about this issue mentions affordability on the one hand and quality on the other. And I know we all want to have everything. But it seems like there's some, at least some tension between those two concepts and the more, um, the more requirements that we put on early childhood care providers, the more, um, qualifications we require the workers to have and all this stuff, all of these things have a downstream effect to raise the price. And of the parents that I talked to. They're more concerned about the the the affordability component than they are the quality component. Can you share from your vantage point. How that, how those two items, uh, how we should think about those two things. Yeah, so if you look at just the childcare as a market and the business model behind a childcare center, the biggest cost of a childcare center is the staff. Um, and quality is directly related to the skill level of the staff that's in there, how many staff are, uh, the ratio between staff and children. And so those are the things that really drive up the cost, um, and it is, it is a tough thing because the true cost of quality care would be more than most parents can afford, but that's why we're trying to find some ways around that. Representative Shepherd, you recognized? Thank you. I'm over here, ma'am, and thank you for your testimony in in some ways representative Ray asked the question that I was going to ask, but if you can elaborate on that a little further, what are the requirements? I just heard you mention staffing, but additional requirements to be considered as quality child care, right? So one of the things that the Office of Early Childhood has is the better beginnings rating system and Tanya could definitely talk more to this, um, but they're, you know, as you go up the quality scale being able to have people with higher levels of education to be able to have lower staff to teacher ratios, those are all parts of the quality, um, being able to. have the right developmental activities for children, all of those things. One of the biggest scenes with that brain development is being able to have the back and forth conversations. That's how language development gets done with a baby. And so if you've got one baby or 5 babies to 1 teacher, it's tough to have those individual conversations. So some, those are some of the things and Tanya and probably others in this room could talk more about that as well. Follow up. Yes, ma'am, recognized. Um, high quality staff in small programs? Is that what you're saying ratios, so one adult to fewer children allows for more quality interactions. Thank you. Yes, ma'am. Representative Mayberry. Thank you. In the 3 solutions that you have there, um, what is the business coalition considering, um, we're talking about tax credits and being a part of the retirement program and all that. And this is probably an impossible question to ask, but who knows? Maybe, maybe you have an answer, um, but do you have any idea what type of fiscal impact that would have on the state? Has there been any research on that or any other discussion that has already taken place. I think as legislators, we can start asking those. Questions, but if you have any information, please share. So on the teacher retirement piece, the only cost would be in the administrative cost to the teacher retirement system, um, because we're not suggesting that there be a state match for these, um, employees. For the two tax credits, we have not done that yet, but I know one of the things we have thought about is, you know, putting a cap or something on there so that it's manageable. OK. A cap just overall or a cap per. Business based on the number of employees, has that been kind of I think those are some things still to be decided, but yeah. Appreciate the hard work. You bet. Thank you. Thank you. Representative Springer. Uh, thank you, uh, Mr. Chair. Thank you again for being here. Maybe I missed this. Did you tell us how much the state has increased the water to reimbursement rate, what is it currently it's gonna be increased effective 101. That's on your, and Tanya could probably answer a lot more of those questions. I shouldn't probably be the one. But Alright, seeing no more questions. Thank you for your testimony. Thank you all. All right. Next on the agenda is Ms. Dickie with Do the dot Consulting. My you state your name for the record, then you're recognized to present. Gina Dickey Consulting. I work in systems work, um, predominantly systems that support the adults that support children. Uh, the majority of that work is in early childhood education at both state, your name for the record, then you're recognized to present. Gina Dickey Consulting. I work in systems work, um, predominantly systems that support the adults that support children. Uh, the majority of that work is in early childhood education at both states, national and international levels, but I happen to be in Arkansan. So excited to be here. The, uh, my colleagues that came before me have uh covered many of the points. I wanted to make sure we made, so I am gonna pretty much throw this PowerPoint. Deck out and and kind of go off the cuff, uh, and I really, really appreciate your questions because we're actually going there too. Um, so to, I just, one of the things I want to talk about really is this, how complicated it is. I think that those members attending today know that. That's probably why you came so you could get a little bit more detail and how inextricably linked this access and affordability and quality are. And so that's what the, my colleagues that behind me are going to try to dissect those a little bit so that you really have a really nice foundation to understand like how complicated it is. Um, one of the things I'd like to point out is we're going to talk about some challenges, but as, um, as Ms. Williams has already said, like, the state's kind of rocking some systems pieces. Um, we have really looked as um colleagues across the state, um, she brings in a lot of input for that. And we look at the best approaches to how to spend. What we have, but I think that's where the rub is, right? It's just not meeting the need. Um, so it's not, there's no criticism to the current system at all. It's just that we often the system that we're responsible for currently as a state, it's kind of an outside in. Like we, we put the things in place as to, um, comsistant Commissioner Williams just stated, around these, um, policies, procedures, rules and regulations, but what we really I want to talk about the remainder of this afternoon is what kind of what needs to be happen from the inside out. Um, the early childhood industry is loose at best, really what holds us together is that we all agree to be a part of the minimum licensing system. Otherwise, we're a very diverse, mostly made up of small businesses, um, that kind of do the best with what we have and what you've already pointed out is that the conflict between quality and access is big. So what I, um, something to think about this access conversation is that when, when a constituent tells you, I can't find care. That can mean one of three things. It could mean there's not a slot available which both the colleagues before me said, and if it's an infant toddler, that's a very, very likely, um, it could mean that I don't feel comfortable with the slot I have found, which is a quality issue, which is a different solution than it is for having a slot available, or it could be that I can't afford it, right? So there's really all these things mixing together that I, I, what I tell people is if it was easy, we would have fixed it already. Right, that there's, so this sort of trilemma is something I talk about where cost, quality, and compensation are really have to be addressed simultaneously if you're going to see a mark. I think the state's done a great job getting us where we are and we've kind of hit a place where unless we look at the workforce itself. And how we support these small businesses, we can't move us off the dime. Um, so what the colleagues that come behind me, we're going to talk, uh, Doctor Lorraine McKelvey does a lot of research for us around early childhood education as an analyst. She's gonna talk about a cost model that was recently done at the request of the Office of Early Childhood to inform the reimbursement rights that we use for federal funds. Um, and she's going to give you a lot of like how the variables you you change one thing. Changes a lot of things. One of the things I appreciate you mentioning. Those quality standards, as Angela said, that the ratio is really one that adult child interaction, she talked about the importance of serve in return for, um, the quality. I, when we think about that, right? Think about the requirements we put on these small businesses to have a certain number of big people in a classroom with a certain number of little people. I want you to think about a family who would blessed with quintuplets. And there's no way that the community doesn't just rally behind them. Like the church has got a like a sign up sheet for um food. But we place young women, 18 years of age or older, in classrooms with 5 babies every day. Like the answer to the access is not to reduce the quality. So we have to be really, really careful about that being part of that formula. Um, and as, uh, Tanya had mentioned, we're moving or we're piloting the new class tool that talks about adult child interactions, thus making the person in the classroom, even more important than they've ever been before, but it is not uncommon for my colleagues to be making minimum wage, doing brainbuilding work with 5 babies. So there's some Complications that the those that come behind me are gonna hit up on, um, the 11 number I did want to leave you with. We're going to throw our line numbers today. And it's just 11,500. I think one really exciting thing for us is that we are now officially part of the B16 continuum for education in Arkansas, right? We're think we fall under the Department of Education. We're thinking about birth through higher education and that foundation starts now. And so this number if you don't carry any of them with you pass a day, I, it, it would be an honor if you have this in your head, seared in there was that if when this baby starts to an early education program, let's say at 8 weeks when her parents go back to work and to school, and they go to work every day and they got an 8 hour day and so we factor in some lunch in the commute like a 9 hour day, she's in care. And taking out vacations and holidays, the amount of time she'll be in an early education program, enabling her family to go to work or to school is 11,500 hours at the most critical part of her brain's development. She will not duplicate that time again. Until the day she enters kindergarten until the end of 9th grade. So I used to work with a group of employers in Tarrant County, Texas. That's the Fort Worth area. They call them their corporate champions for children. And our chair used to say an investment in early education is a three-fer. That as businesses were already invested in in education system. We pay taxes, part of the K-12 is part of our system, that an investment in early education gets you a better return on that investment. They also knew, um, Norman Robbins was my chair, uh, at one point. He worked for Northrop Guman, and he would say, you walk around this building at 3 o'clock, and I guarantee you work has stopped and people are checking in on their school age kids to make sure they got home. That we know quality early education and after-school programs increases employees' productivity, which Angela already mentioned. And then the third thing, if this really is the foundation for education, when we're looking at those soft skills and those executive functions like perspective taking and effective communication, they started long before you got to kindergarten, which is what we all want as employees. It's what I want in my team members. So I'm gonna turn it over to Doctor McKelvey to talk about, um, the cost model that she's created, if there's no question. Senator has a question. So I see here that I, I know this is a, this is a national problem. It's been a national problem for 40 years. Yes, ma'am. Um, but I noticed here you've got some things that other states are doing. How are they? What have you seen, um, from other states, um. Julie Yarberry is here representing the Arkansas Early Childhood Association today, and they have a policy agenda that they've put to place. We consider this an industry-led solution, right? These are 1200 early educators in the state of Arkansas looking at just that thing, um, and we're very fond of the work that was done in Louisiana, and Louisiana will tell us that they took that and made it better in Nebraska. And they're looking at a suite of tax credits that, um, benefit all the stakeholders. So it's looking at what resources can be made available for middle-income families to make it more affordable. What can be given to businesses to incentivize them to participate in supporting early education in their community. It also gives a tax benefit to the program. And the thing I'm most interested in is a tax credit to the workforce itself. A way to, uh, we. I hope before I die, we will see pay parity for my early educators who work in it with 0 to 5 children to our K-12 counterparts when we are equally qualified. Um, we're way off the mark. Um, so anything that moves us in the right direction and we have the Nebraska, um, tax credit for the workforce has retained staff and increased, um, uh, educational attainment. So what kind of a tax credit are they getting? So in The workforce is one I paid much attention to. Um, it's, it's refundable based on your credentials or certification. So about 6 years ago, we rolled out the teach scholarship program with money through the, uh, at the time Division of Early Childhood with some childcare development fund dollars that came to the state. There was a, a bump across the country for every state. Um, we rolled that out and then we received additional funds for additional scholarships during the ARPA, with AARPA funds from the state. Uh, we now have 400 scholars in that program, so people wanting to go back to school to improve their own. Um, pedagogy, um, but right now we don't really have a way to pay them when they get out, right? They, you get your associate's degree and I maybe can give you a few more cents. The complicated pieces I can't improve my workforce without burdening my family. That's the rub. OK, thank you. Thank you. Thank you for your testimony. If you'll state your name for the record, then you recognize to present. Hi, I'm Lorraine McKelvey. I work with UAMS, uh, and I have been doing, uh, childcare financing work with the state for the last 10 years. Oh, Is that better? OK, sorry about that. Uh, so what I wanted to do today was really think through the business side. So I'm going to use the cost model that we use with the state. Um, my role with the state is to help determine the cost of care. And so our reimbursement rates are set appropriately. Um, and so these models are give us lots of opportunity to look at different characteristics of programs, uh, from quality to, to neighborhood context kind of questions. So I'm going to walk us through some of that, uh, but very briefly, cost models are hypothetical budgets that are set, set, um, and based on the required standards for care. So these include level 2, which you'll see in my slides, which are basically minimum licensing, um, all the way up to level 6 of better beginnings. They allow us to explore differences in financing, uh, for programs, uh, and, uh, what I want you to keep in mind as we're looking at is they are currently set up for the rates that will go into effect on October 1st, uh, and so our models are really best case scenarios because right now, the voucher rate is set as the private pay rate, um, because it's not really the state's responsibility to try to figure out all of the, the, um, individual. Financing issues that might come with providers. Um, so the big takeaway that we've heard today is that childcare financing is, uh, limited, especially for infants and toddlers. And these are some of the ways that I'm going to walk through, uh, different hypothetical models for you about businesses. So we're gonna look at some characteristics of program size, um, And the age mix of children served, and then we're going to look at quality standards. So what I have for you on the left hand side is the urban cost model. So if you look across the licensing data and you see the number of children that programs can serve what we typically have are is a program with 5 classrooms. They have 2 infant toddler, 2 early childhood and 1 school-age classroom. And the maximum number of children that can be served is 116. And as you can see from that graph, apart from regulated care, most programs are doing OK. They're able to make ends meet and pay bills. The graph on the right is what happens in rural programs. So there are fewer children in rural areas to to be in programs and what we tend to see are are distribution of classrooms that's different. We see 3.5 classrooms instead of 5. They're serving a maximum number of 74 children, and as you can see that really impacts the program's bottom line. So what this is getting at for you is the economy of scale. When I started this work 10 years ago, we talked about 100 children being kind of the, the baseline that you needed to keep a business running. And that's pretty much more around 120, um, now. So unless programs have in-kind contributions, it's really hard for them to serve less than 120 kids and stay solve. I was ambitious in what I could cover. I'm gonna skip that one. So, uh, we've been talking about infant toddler care and infant toddler care being more expensive, you'll recognize the graph on the left. That's the same urban model that we've been talking about with the age mix of children. The one on the right is if you took the 5 classrooms at all things being equal and made all the classrooms serve children under the age of 3. And as you can see here, um, programs would really struggle financially to make that happen. So what this is helping us see is that programs are using the revenue from older children to help offset the cost of providing care for young. Now I'm gonna move into quality. Um, so the purple lines are the graph that we've been looking at on the right or on the left-hand side of the screen. Um, so level 2 care is essentially regulated care, uh, level 6 care would be something akin to an early Head Start Head Start program. And as you can see when, um, quality increases the cost that it takes to provide that by child drastically increases. So these numbers are similar to what Angela showed earlier, we have about $6000 a year for regulated care and $10,000 a year for level 6 programs. And that's for all children. So you would have to have families paying $806 for their school-age child as well. And then if you look at the turquoise line. This is actually another indicator of how infant toddlers cost more, um, in an, in an infant toddler classroom like an early head start, a business would have to charge about $14,000 a year for infant care. So, uh, this is also just on the cost of quality side. Uh, one of the things, uh, Angela said earlier is that personnel costs are really the driver of, of business costs. And this increases as quality increases, so, um, as we've mentioned, you want people who have more pre-service education and training, uh, and that means that we need to pay them a little better. Hopefully we pay everyone a little better, uh, but they, they expect to be paid better and to have some benefits. So, uh, personnel costs go from 70, uh, I'm sorry, 57% of expenses up to 70% of expenses once we start moving up in quality. This also means there's less opportunity to cut expenses to make ends meet, because it's all in, it's all in people. And then this is just the other side of the continuum, which is related to that first slide and that program size matters. And so when we start talking about quality and taking care of fewer children. Her adult, you have less revenue. So putting it all together, uh, program size matters and small centers likely struggle financially. Enrollment matters and that's related to program size, so you have to stay as enrolled as you possibly can if you, if you can't have a few kids for a few months at a time, that can really impact your bottom line. Age matters and programs that serve mixed ages or stronger financially. Infants and toddlers are more expensive. Uh, there are fewer children that you can generate revenue on on the same number of adults. Quality costs more to provide and has the potential to earn you less revenue and personnel is the largest cost driver for provider. And then I just want to take a second to end on Workforce data. I would be remiss to not talk about what this means for, uh, the people caring for our babies. So if we look at the 78% of the folks who participated in the last workforce study who work full time. They are poorly compensated, half of them are not provided health insurance. Almost 70% of them aren't provided any sort of retirement savings. Half reported not being able to meet their basic needs and 40% of them almost reported food insecurity. Half of them almost use public assistance to support their families and 42% of them are screening positive for depression. And as you might imagine, that means that they're not likely to stay in our jobs very long. So thank you. And here's my contact information, happy to answer any questions. Senator English, you're gonna ask for a question. Thank you. So I guess one of the things I'm wondering about and I should know better, but when we talk about childcare, are we including childcare, pre-K, all in the same. Conversation or are they two separate conversations, so these models are specific to businesses, um, that you can include pre-K that has state funding in these models, but these that I was showing you are, are not that. So these are not, these are not ABC centers, unless they also have private pay. Families, so I guess one of the, the things we, we want little people to have a be ready for kindergarten, so to speak. And so I guess my question is whether or not I, I think as a parent or no my daughter was looking for kids, parents, I mean, uh, they care for her. She wanted my her kids to learn something. So in my mind that all kind of goes together. It's not just babysitting, it's, it's, what are you doing to to teach my child, so how does that all go together, which I think it needs to, um. So, so that is definitely more likely in the better beginnings levels 45, and 6 that you saw that, that where there was an increase in revenue, uh, well, towards the end there, there was an increase in overall, um, Net gain for the for the for the programs, um, but it does, it does cost more. And as I was saying, and I, and I see that. I, I just was thinking about we have so many, um, pre-K programs in schools. They're out at 2:30 in the afternoon. What happens to those little kids after, after 2:30 in the afternoon. I don't know what the percentage of young little people is in schools. To you would know that, but I don't typically go to wrap around. Services. So sometimes they'll go into programs, uh, into aftercare. That's that tends to be what happens. I like school aftercare regular school sometimes yeah, sometimes schools, sometimes private business depending on any in my mind it sort of we we need to figure out what this bigger, bigger conversation is about what we're, what we're talking about because obviously. Daycare doesn't end. When somebody goes to kindergarten or daycare doesn't end when they're in pre-K at school the urban models that I share do have a school age component, so those are including aftercare, aftercare, just a little bit I'm sorry, the, the models that I included, particularly the urban model, the base model does have a school age component, so those tend to have one classroom of aftercare school-age kids. OK. All right, thank you. You're welcome Representative Springer. Thank you Mr. Chair and thank you for your presentation and I don't want to put you on the spot, but I, I'm just curious to know, do you have any recommendations to present to address the cost and you don't have to state them if you don't want to at this point in time, but that would be good for us to have some ideas to ways, recommendations to address these costs. Um, I have may I provide um documentation at another time just because I know I have people coming behind me and I've said, I've got a set of recommendations that Tanya and I have been talking about and if you could send that to Blake and then he can give it to the committee. I thought maybe you would. OK. Thank you. And then Representative Mayberry. Thank you. um, so on the last page it says the annual salaries range from 24,000 to 45,000 depending upon the education, years of experience, etc. I'm just curious if you are seeing any of our early childhood educators now leaving that field because they know that the starting salary, if they were to work K-12 is now 50,000. Is that, is that an issue yet? It's just curious. It was an issue when we did this in 2018. So we've done multiple, um, workforce studies. It, it did come up at the time, um, We do see a lot of turnover in the field just in general. I think the last director workforce study we had was, uh, that every program experienced like 60% turnover in staff in a six month period of time. So it is, um, it is definitely a problem. Uh, pay parity. Uh, seeing no more questions, Doctor McKelway, thank you for your testimony. Thank you. If if you'll state your name for the record, you're recognized to present. OK. My name is Tammy Roland James, and I'm with the Northwest Arkansas Family Child Care Association. Um, You guys have heard a lot of research and a lot of information, and I have to say, I'm not a researcher. I don't have any of that kind of information other than what I do on a daily basis, which is go inside family child care homes in northwest Arkansas. I work for an organization that was founded in 1980. We were supported by the University of Arkansas and a Levi Strauss Grant. And the reason that we were started was to improve quality inside family childcare homes. And we do. That by training, mentoring, and, um, sponsoring the CACFP, the USDA Food Program. We now serve family childcare in 6 counties in northwest Arkansas, Benton, Carroll. Um, Boon, Logan, Madison and Washington counties. And our commitment has proven because 69% of the homes in our association participate in the state's quality assurance program, Better Beginnings. Of those, 28% of our association members have earned the six-star rating and achieved national accreditation. But my passion for family childcare comes from my own 26 years, opening my home as Miss Tammy of the Top Spot Daycare. I provided a loving and safe environment, and I also was a nationally accredited home. I delivered the best care that I possibly could, and I eventually had to close my home to take care of my father who was 99 years old when he passed away. But my passion to this commitment for work that my commitment to this work has gone on. That's why I'm now part of the association. Now I want to pause for a minute to clarify what I mean by regulated family childcare, because many still think that we're a little more than babysitters. Recently, I spoke with someone who believed institutionalized settings were best for the education of young children. But after visiting some of our homes in northwest Arkansas, she changed her mind, and I want to show you why. Yeah OK So these are the licensed family child care homes in Arkansas. I hope you noticed the homelike settings, the smiles, the learning, and the diverse age groups that were interacting together. Family childcare is so much more than just watching children. It's a nurturing educational experience. Currently, there are 203 regulated family child care homes in Arkansas, and 57% of them participate in the state's Better Beginnings program. I know you've heard all the challenges and of accessibility and affordability in childcare with sinners struggling financially and facing staffing shortages. Many Arkansas families can't find or afford to, to, um, to find the care that they need. Some are forced to have one parent stay home or work separate shifts, which is such a problem with families. But I want to ask you, what if we had abundant high quality child care that was affordable and available in every community. What if families had a range of choices that reflected their cultural and religious values and had providers that spoke their home language. What if siblings could stay together in a homelike setting with consistent caregivers. I believe family childcare can provide that solution. These homes can offer care at a much lower cost. They also can offer flexible hours for those people that need to work different shifts, and they can offer care in the childcare deserts that cannot feasibly handle a center. So why aren't there more family child care homes regulated. In 2008, Arkansas had 759 regulated family child care homes. Today we have 203. Many providers start this process wanting or needing to stay home with their children and supplement their family income. But when they investigate becoming regulated, they are deterred by the process which is expensive, time consuming and difficult. So they choose to remain unregulated. In the state of Arkansas, you can keep 5 children without being regulated. For example, I've been working with a home since January, trying to get her licensed in Northwest Arkansas City zoning is requiring that she becomes a commercial property. Now please understand that I am not advocating for deregulation. I wholeheartedly believe in and support a system that holds providers to a high standard. Our children deserve nothing less. However, we cannot expect a provider to start her business at the same level that it's taken years for most of these providers to achieve. We need to make it more feasible for providers to enter our system a graduated license of some sort or streamlined registration process that could help provide get started and then we could offer them the support and the training that they need. We need cities to support the oversight from the state and not add barriers to regulation. By doing so, we can increase the numbers of affordable regulated homes, especially for our infants and toddlers and improved childcare access across the state. Should we care if providers are regulated? Absolutely. Regulation ensures safety, healthy environments, providers who are sensitive and responsive to children's needs and stronger family engagement. It keeps providers motivated for the long term. So should we care? Only if you care about children and their future. Thank you for your time. You take any questions? Yes, Thank you for your time. You take any questions? I believe Representative Ray has a question. Thank you, Mr. Chairman. Um, and I apologize, I missed the front end of your introduction because I had to step out for a second. When you say, when you say family childcare, you're, are you referring to sort of smaller in, in, in inside a residence type childcare inside a home inside Arkansas, there's unregulated and there's regulated. There's registered, registered homes, and there's licensed homes. And so an unregulated home in the state is not, is not regulated. The state at all. They can keep 5 children. Some cities don't allow unregulated providers at all. But then if you become regulated through the Office of Early Care, you can keep, um, anywhere from, you know, 5 up to 16 inside your home according to the different regulations. OK. Um, a lot of things that you said were really interesting and what you said. Resonated quite a bit with me, I mean. The The number that you, the numbers that you cited over 700 facilities in 2008 versus 203 today. Um, you attribute that, it sounds like to, um, a lot of the barriers that come with. Uh, going through the process of being regulated and then also it sounds like there are. Could you specifically give me some more details about cities that are making it difficult on these types of providers that that you said that some cities don't allow. And unregulated providers. Um, that's what I, I actually work with cities quite a bit. I work with, um, the providers trying to get them through the regulation process. And so I've worked with a lot trying to educate up in northwest Arkansas, and the problem is a lot of it is just the, the fact of the unknown. A lot of them worry about how much traffic, how much noise, how much, you know, of the security, those kind of things. And so they put a lot of, of regulations and rules on to keep that from happening. I actually, after being, um, a nationally accredited licensed family childcare home for over 20 years, moved to a city in in northwest Arkansas and was not allowed to because they were worried that 8 children would cause too much traffic inside a, inside my neighborhood. So I was able to be voluntarily registered luckily, so I was able to stay part of the system, but it's those types of things. We had a home in another city that, um, had to completely pay. Her driveway because they wanted to make sure that, um, fire trucks could get down there. The reasons for these regulations in thought are very, very good. They're thinking about the safety of the children, but they're not thinking about the fact that it's a small group of children. It's not a large center. Yeah, I, I could say as a member of the city, county and local government affairs Committee, um, it's very disappointing to hear that cities are throwing up roadblocks like this, but unfortunately, not surprising to hear or to learn, um, so I'd like to connect with you offline about some of these issues, um, but I thank you for your testimony. I'd like that. Thank you. Representative Mayberry. Thank you. Um, we did have a bill last session which we can talk about too that might have helped a little bit. I think we can tweak that and possibly help more with the city regulations, but that's, we'll, we'll move on. My other question is, um. So if, if there's. A possibility if I'm hearing you correctly, maybe some type of stair step process, so you can have 5 children and no regulations. But, um, perhaps you, I don't know, give me an example of something that is required. Well, that's what and when I became licensed in 1991, I actually had to have plug-ins in the plug-in, you know, in the, in the, um, sockets. I had to have a covered trash can, a fire extinguisher background checks. And because you're allowed to keep 5 children without doing any of that. So they allowed me to keep 5 children inside my home with just those small things. And then as I worked my way up, then I was able to become licensed for for more children. And that's kind of what I was hoping to be able to go back to is some sort of step-in process that just took in the safety of the children and not so much of, of some of the other things that are required like the scheduling and the, the curriculum and, and some of those things that. That do, it, it's one of those things that we train them to do those things. We, we bring them up to bring those things and, and make them higher quality. So if I'm hearing you correctly, then that's somewhere in Arkansas history, we have a track record of showing these stair steps and registration process. I I used, I think I use the word licensed and I apologize for that. I was actually voluntarily registered when I first started in '91, and you were able to become part of the system, do a few small things and keep 5 children in your home but be part of the system. And then I became part of the association and they trained me up from there and then I became licensed and, uh, it, it caused, there were other things that you had to do become licensed and keep more children. Because since you can keep 5 without doing anything, wouldn't it be nice to have a regulation to where they had some oversight and they had the support because without that support, how are they supposed to know what they're, what they're gonna, you know, what, what best practice is. Right. Thank you, yes. I see no more questions. Thank you for your testimony. Thank you. Members without objection we're going to go out of order and move on to Miss Sutton. Hi, if you state your name for the record, you're recognized to present. Melissa Sutton. Um, I'm honored to be here. This has been a great experience. I want to, um, say, Miss Rowland showed us a beautiful video of what quality care looks like. And I've been asked to come and talk about two different types of quality. We've all discussed a little bit about quality throughout and I just a little bit of information about what I do. I'm not a researcher either. I work for, um, a state childhood Services and we are the boots on the ground. We're the ones that are out supporting childcare centers all types, family homes, all of the, um, different ABC sites, childcare centers, and so, um, what I'm, I'm here to talk about is two different types of, of quality that we experience here in Arkansas. So structural and process quality in early childhood programs is what I want to talk about today. In an early childhood program, structural quality refers to the measurable, often regulated aspects of a program like Class size, Teacher child ratio that we've talked a lot about today. Staff qualifications as well and physical space while process quality refers to the day to day interactions between teachers and children, including the quality of teaching practices. Curriculum implementation and the overall learning environment. We have 3 documents in Arkansas that provide infrastructure for structural quality. And these three documents have kind of been looked at and mentioned in some form or fashion this afternoon. So first, we have minimum licensing requirements. Mineral licensing requirements established minimum standards for children's health and safety. Teacher to child ratio, staff qualifications, and physical space. Second, we have the Arkansas Child Development and Early Learning Standards birth through 60 months. This is a vital set of learning goals that describes the trajectory of development and learning for typically developing children during the 1st 5 years of life when the brain is developing at its most rapid pace. And third, we have the document of the Arkansas workforce Knowledge and competencies for early care and education professionals. This document defines what the workforce should know. When they're with children and be able to do with children and. It gives us the competencies to know what that would look like. So these three documents are in place so that early educators can effectively support children's development. Teachers need paid planning time away from the classroom to use these tools in the way they were designed. We see variations from program to program. For example, subsidized programs such as Head Start tend to have the financial resources to provide paid planning and professional development time. Other programs, however, often cannot afford to schedule staff planning time during the workday and cannot afford to pay overtime. In this case, quality suffers, and Arkansas's tools for teachers end up sitting on a shelf. But these are wonderful tools that we want. Childcare providers to have access to. They have access, but when is time allowed for them to dive in and really learn from there. So now we'll talk about process quality. Many young children, as Gina stated, spend so many hours, 11,500 in an early childhood program before they enter kindergarten. The adults who care for them are responsible for having the knowledge and skills to provide a planned and purposeful environment where children feel safe, connected, and ready to learn. A high quality childhood program has many characteristics. We heard some of them today, and I'm gonna dive into 5 of them. A safe and structured environment where children can focus on their learning is clean, organized, predictable, and led by a consistent teacher. Paid planning time allows teachers to be prepared for the day. So that they may respond effectively to children's needs and focus on warm positive interactions. I think everybody's kind of mentioned interactions today between the adult and the children in care. Low adult to child ratios allows more frequent and richer teacher-child interactions, enabling the teacher to better individualized learning experiences for all children. The ratio matters, and we know we all mentioned that today, that it's expensive. There is a there is a price when you have quality. But I don't think we can go without it. Well implemented curriculum is skillfully and playfully guided by instructional practices that engage children cognitively. Physically Socially and emotionally and supports the development of the language and literacy skills. Community building opportunities also happen in a quality childcare. This happens when the teacher strategically uses mealtime, clean up time, and whole group times to engage the children in opportunities to demonstrate the act of valuing others and working well together. These early experiences lay the foundation for the long-term goal of productive adult adults who can focus. Display self-control, communicate, have critical thinking skills and be self-directed citizens and members of our workforce. There are some characteristics of a quality experience we want for all children. But this is not typical for many. When in the field supporting teachers, we sometimes see high quality programs with skilled staff and enriched learning environments where children are thriving. However, more often we see classrooms where there is a lack of both structural and process quality. We see children who are experiencing, who are not experiencing a safe and structured environment, which is affecting their development and learning and often calls what Looks like challenging behaviors. Staff frequently appear to be overwhelmed because they do not know what to do and how to do it. A common cycle is that we see is a teacher who quits because she doesn't know what to do. The director needs someone in the classroom, so she grabs the most available, next available person. This person doesn't know what to do either, and they don't come back when they leave for lunch. So this workforce problem is very real in our state and our children are paying the price for a broken early childhood workforce. When teachers have knowledge and skills and are paid a worthy wage for such. They will be competent. The children will thrive, and the families will be confident in their child care choices, causing them to be productive employees, which we all noticed today as well. Investing in early childhood years really, really is a win-win for all of us. So, thank you. So you know, questions Miss Sutton, thank you for your testimony. Thank you. And moving back up, we're going to hear from Ms. Yarberry. Please state your name for the record and you're recognized. I'm Julie Yarberry, uh, president-elect of the Arkansas Early Childhood Association. Thank you, Mr. Chairman, for this opportunity. Um, and I want to thank my colleagues for sharing data about accessibility and affordability, as well as some possible solutions today. Um, I have been working in the early childhood field here in Arkansas for more than 25 years as a preschool teacher, a center director, and now I support directors and coaches, um, as Melissa said, boots on the ground through Arkansas State University Childhood Services. Today my message is on behalf of the more than 1200 early childhood professionals who are members of AECA. Who are the people that were expecting to do this work during the children's crucial development years. As a Ms. Dickey stated, many are young women with high school diplomas, some juggling college, some with full-time jobs, some with young children of their own. Um, Doctor McKelvey mentioned the 2022 workforce study where 78% of the workforce were working full time but still could not afford basic necessities. And I just want to share a few snapshots of some of those professionals that I worked with as a director at a center in Midtown Little Rock. Alexis lived at home with her mother and sister and her sister's children. She had a second job at a store at the mall, on the weekends, but she was always requesting more hours, um, at our center. But it was common that she wouldn't show up for her scheduled afternoon shift. When I checked in to see why, I found out she didn't have gas money to get to work. In her mother's car, she couldn't afford her own car, but her mother needed gas money. On another day she had to take the bus across town to pay a utility bill before her electricity was shut off. Callie was a young mom that needed money to fix a flat tire. Jordan was a student worker and she needed money to pick up a prescription for strep throat that she caught at the center. Terra needed money to buy tennis shoes because when she came and interviewed with me, she said, I only have flip flops, Miss Julie, and I know that's not the right thing to wear to be safe. Teachers want to do what's best for children, and they want to earn a living wage. At least the same as their counterparts in other service industries. It's heartbreaking for directors to continue to lose staff to retail outlets and fast food restaurants. It places centers in the position where the administrators have to be the ones in the classrooms. While they're searching for more untrained staff to fill the positions. We recognize that families cannot afford to pay more. And we feel that our solutions will come from outside of our sector. Including the early childcare workforce in any strategy will allow us to continue to offer choices to families that we've heard about today. Families need accessibility to a variety of choices based on their needs. In addition to the typical 6 a.m. to 6:00 p.m. childcare center, we need extended hour options for shift workers, part-time options, faith-based nonprofit run centers, Head Start centers, urban and rural centers, and of course our family child care homes. We desire to keep all of those options available for families. But programs sometimes have to close classrooms due to staffing issues. We know that Arkansas's child care crisis won't be solved by a single initiative. We consider the early childhood workforce the key to any policy solution. We are worth investing in. We are the workforce that every single Arkansas industry relies on, and we're instrumental to the state's economic stability and productivity. When the early childhood workforce is valued as an integral part of our state's infrastructure, then we will be able to retain staff, provide essential professional development. We will be better able to serve Arkansas families, and in turn, we will give our youngest Arkansans the quality early childhood experiences that you've heard about and that they deserve. Thank you. So, thank you for your testimony. Members, we had a, um, a last minute edition, so we're going to hear from Miss Lisa Farrell, former member of the General Assembly, Ms. Lisa Farrell. Welcome back. When I was here we didn't have accommodations. It's really impressive. I'm kind of jealous, so. Thank you. Uh, I'm here today, uh, as a, uh, individual representative of a group of business leaders in the area that have become concerned about early childhood education from the economic and business perspective in addition to the quality of life perspective. Uh, many of us have employees, uh, or have other experiences with having children ourselves, uh, that have, uh, caused us to recognize the importance of this issue. Several of the committee members are here with, with me today and the audience Haskell Dickinson, John Riggs, Elizabeth Small, and Jennifer Wilson Harvey. And there's other, others of us that over the past year, we've had the good fortune to hear from many of the experts in in this room today so that we could better. understand and see if there were ways uh that the business community could assist. Um, we put out a, uh, we, uh, distributed a handout, uh, and a lot of it that you all, I think, have. If not, I'm sure, uh, Blake can, can get a copy to you. Uh, I start out by citing, uh, the US Chamber, uh, study, and they did a study of every state in the country and the impact, uh, that the lack of quality childcare was having on every state and as, uh, Angela mentioned before, uh, the figure is close to 900,000 annually, so it's, it's a significant impact not only from, again, quality of life, but economic as well. Other states, um, are addressing this issue, and one of the things we as a committee did was visit with the US Chamber of Commerce to find out what other states were doing, uh, if they had a proposals themselves, wanting, of course, to learn from successes in other states. What we have concluded is what has been effective in other states or has the potential to be effective is uh a series of tax credits. Now that said, uh, we are supportive of the work of other folks here. It's not an either or, it's not do this, not that. Uh, there's many, many good solutions that have been laid on the table, and we trust the wisdom of the General Assembly and the governor to come up with final good All incoming solutions. I'm going to run through them briefly, um, rather than go into great detail, but we're certainly willing and able, um, if you all have questions, uh, or would like to visit with them more. To, we tried to think of this as to how do we hit. Uh, affordability? How do we hit quality? How do we help childcare providers and how do we help staff? So we looked at tax credits that impacted all of those. For employers, we recommend a 50% tax credit for use at any licensed early childhood education provider. Again, it's the state of Arkansas that would do the licensing. We're not getting into the details of who qualifies, who doesn't qualify. The state already has that in place. And then our hope to increase uh the quality of childcare, um, in the state while increasing affordability would allow employers a 75% tax credit, uh, for use at early childhood, um, education providers who meet a high rating on the state's early beginnings stand um. Ranking system So this would enable employers to contribute 75%, so and receive a tax credit, um, that would, um, help offset the cost if there's an increase in cost. And then also if employers, uh, do their own centers again, tax credits as well. Now there are employers and we visited, um, UAMS's new childcare facility. I encourage y'all to visit that if possible. We visited it before it was open while there were not children present, it is impressive. Walmart has used the same company, um, that is working with UAMS. Large organizations and entities can do this, but small business owners. Small companies. Uh, really can't, uh, do an early childhood center themselves. So it's, uh, we also view this as benefiting small business. We also wanted to benefit providers by providing them tax cuts, uh, I'm sorry, tax credits, excuse me, to help them increase, uh, the quality of their care. So we're proposing a one time $10,000 tax credit per classroom so that they can bring their classroom up to higher quality standards. Again, as set by the experts at the state. Uh, for classroom materials, uh, classroom education. And for nonprofits or others, we would like those tax credits to be sellable. So, uh, a nonprofits have faith-based is not going to, uh, need the tax credit, but they could sell the tax credit, um, to get the money to do the improvements. Uh, also tax credits for credentialing staff, um, so that, uh, we, uh, propose 110% of the cost of paying for staff to have additional credits as a tax credit. And then also apprenticeship funds, um, I worked, uh, for DWS and know that there are many, as did Senator English, know that there are many, um, federal programs emphasizing apprenticeship and currently looking for apprenticeship opportunities in what are traditionally, uh, female industries. For the, uh, education. Staff, the workers, uh, we propose 125% tax credit for them for the cost of increasing their credentials so that, uh, if they are going to school, getting educated through many of the programs and certificates at, for example, two year colleges, I could see two-year colleges around the state offering these uh, these credentials, both helping the two-year colleges as well as people get the education they need in a close by setting. We would like to see, uh, EC early childhood education workers compensated at the equivalent of their local public school. Now, not the teachers some may be a teacher's salary of $50,000 but there's also AIDS and others uh that aren't receiving that teacher's salary, but are still, um, uh, compensated by the local public school. And again with these increased tax credits for employers. Um, and service is, uh, service providers and others hopefully compensating that increase in wage so that some of those factors that you heard, food insecurity, depression, reliance on public resources, uh, for their families to continue, uh, to exist, um, there, that can be removed and they can get wages similar to those in their local school districts. Um, then finally a tax credit for families up to 33% of the cost of providing early childhood education, um, in a licensed facility. A couple of funding sources we looked at again, we, we do not claim to be the experts, it's you all that know this, um, but there's been, uh, changes in casino gaming and online gaming, is that a potential resource, uh, medical marijuana, if it's made legal, uh, is there taxing for recreational marijuana, um, we're not advocating for that against that. We're just looking at what pots may be out there. Is A portion of the surplus that can go for one-time tax credits and then there, there might be others. Again, we looked at it from the business perspective. Uh, we've also included a chart that one of our members, Haskell Dickinson, uh, has worked, uh, extensively learning about the Tri-Share model that's been done in Michigan. Uh, where the family pays a portion, the employer pays a portion in the state pays a portion. And so Haskell put together a, a potential sample of that. This is an issue that other states are grappling with, um, uh, Alabama, for example, has passed tax credits for employers, up to $600,000 per employer, small employers to small business, uh, they receive 100% tax credit, uh, larger employers receive a 75% tax credit of the cost. Michigan has done this Tricare, uh, Trishare model, um, Missouri is working on. The issue as well. Uh, there's been, as was mentioned, uh, other things in Louisiana. There are other states that are working on this issue much more extensively, um, because it's recently reached the forefront. Um, to, to such that it's risen to the level that the US Chamber is involved, I think you're going to see a lot of states and for Arkansas to remain competitive, attract young workers who want to raise, uh, their families here. We also need to be ready to, um, offer, uh, means for them to be able to have a quality childcare, um, and big employers like Walmart and UAMS have figured that Out, um But there's a lot of small business that don't carry the weight and heft of those large organizations that could use uh assistance in helping their workforce, uh, succeed and thrive. Thank you. Will you take any questions? I will, but if I need to, I'm going to do what is it? What is that old show a million dollar question or whatever it is where you get a a a a lifeline from the audience, yes. I will then Representative Mayberry, you recognized for a question. Hopefully my question's not very hard and you don't need to phone anybody, but just, just curious because I, I, I even had a proposal last year of some income tax benefits for businesses and and folks and and all that and we weren't able to get it anywhere, so I understand and believe in the, you know, some of the things that you're presenting right here and I think some answers are there, but I've also had people say, you know, in the state, we continue to reduce the corporate income tax and we continue to reduce the personal, um, income tax. And as we continue to do that, some of these incentives are not. As incentivizing, I guess I should say so and and if the goal is to eventually do away with them, what does that eventually mean for these businesses that then are relying on these incentives to make things work. Just a big picture. Anytime you make a change, there might be unintended consequences with it too, and that is an excellent question because it's a tax credit, it whatever corporate tax is paid, it comes off their tax bill. So if they're paying any, any level of tax, it would come off their tax bill because it's a tax credit. We actually had the discussion about this is another way to reduce corporate income tax, while allowing them to shift those dollars that they would pay for income tax to the benefit of their workforce. So kind of a win, win, win. The state's reducing their tax burden, they're able to then deploy that money to help stabilize and recruit a strong workforce. Thank you. Thanks for sharing and we are aware of your efforts and appreciative, and we understand those came late in the session, um, I think that, uh, there's a strong. We've talked to business leaders throughout the state, not just central Arkansas, and I think there's a strong support for action from the business community. I mean, you've seen the head of the Arkansas State Chamber write letters in our editorial opinions in Arkansas business about this being an issue. Thank you. Representative Ray. Thank you, Mr. Chairman. Um, Ms. Ferrell, my question should be really easy, um, can you repeat, who, who was it that you were representing again? So there's a group of business, uh, folks that have gotten together over the past year. I'm speaking as an individual today, um, reflecting the work of that committee if there's probably, I should do a count, but probably about 15 of us. uh all of the other speakers that preceded you, we have a copy of their, uh. slide deck on the, you rattled off a long list of proposals there. Could we get a copy of that for, oh, do I have that in my stack? I, I, I gave that and, and if you don't have it, we'll make sure you get one, but, but we did bring, uh, 15 copies, uh, today for the committee. So thank you, thank you for asking that. And the last question I have, I guess is a little bit more philosophical and I think. Representative Mayberry was. Touching on the same thing, but. There's all sorts of things that. Policymakers from time to time want to try to get. Businesses to incentivize, right, whether it's, whether it is providing childcare for employees, helping them with that, whether it's hiring people with criminal records. There's all sorts of things that we would like businesses to do, not every business' needs are the same. There are some businesses who their workforce just simply isn't made up of people who would have childcare needs, for example. So, I mean, I guess instead of just, um, carving out holes all throughout our tax code. To try and get businesses to do the sorts of things we want them to do, would we be better off just simply in a broad-based way, lowering the rates for all businesses and allowing them to use those savings for whatever benefits their, their type of business or industry the most because in some instances it may be. You know, expanding their business or opening a new location to reach more customers in some businesses, it may be helping retain their workforce or attract new workers like you're talking about doing with childcare. Can you, can you? Offer any thoughts on that? A couple of questions. First, I want to make clear that participation by the employer would not be mandatory. I just want to make, make clear if they chose not to offer the benefit to their staff, um, then they would not be eligible for the tax credit, of course, but they are not required to do that. So I wanted to make that clear. Well, you know, that you're you're asking a really good question. I think. Our, our tax rate in Arkansas is fairly low. Thanks to many progressions. And this problem persists. Uh, I also, as a small business operator myself, um. Uh, are always trying to make decisions on on how to spend funds and Having an incentive, I know there's, there are times I've taken advantage of incentives. They've kind of, if you will, steered me in the, in, in a course that has allowed me to assist the community or or something else. I think that other states are using these tax credits. I think that. Arkansas may be compared to, say, if someone is looking to locate and they see. Uh, Alabama is offering 600,000 in a tax credit, it might make it easier for them to choose to go to Alabama, um, And not Arkansas or something like that, so I think, think you're, you're asking a great question. We sort of need to look at what that does from us from a competitive, uh, standpoint as well. I mean, just, I guess was it your employer that provided the FSA or the state? Well, it's, it's the, yeah, so, so by being a legislator, is that, I, I, I don't know how that works. I'm not familiar with it. Yeah, OK. And so that, that. was a benefit, I guess the state offers state employees. Yeah, I got it. I got it. Uh, so that's a, that's a good option that the state offered. Yeah. OK, thank you. Thank you. Alright, no other questions, Ms. Ferrell, thank you for your testimony. Thank you. I appreciate your time. And if we can, and my main message is uh a lot of smart experts today have worked very hard on this. Uh, issue and if we as a business community can assist in achieving a goal that helps the state both economically and helps the quality of life of our families. We certainly want to be of assistance. Thank you. Thank you for all the presenters who came in today to share with us, Ms with no other business for us, we are adjourned.