Education- House Early Childhood Subcommittee
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Representative Denise Garner
Unverified
2:00
Thank you. take a seat and get started if we could. Welcome everybody and thank you for being
here. This is a meeting of the Early
Childhood Education Subcommittee and I just wanted to let you know that it's a little bit different than our
normal committee meetings so we don't have legislation that we're working on right now we're not in session but this meeting is to make sure that we get information about what's going on with the child care issues and the questions get answered for stakeholders in the community and and educators
and families and then we see where where we go from here so those are the goals of this meeting And I think we have good representation from each of those groups, and we will hear from those folks and then have questions from the members. And we'll start with the education subcommittee members first, then questions from the education committee, and then general questions from members, House and Senate.
So with that, let's go ahead
and get started. And we'll start with the Department of Education. And if Secretary Oliva can
come up and answer some questions.
Speaker 20
4:23
Good afternoon, Jacob Oliva, Secretary of Education.
Representative Denise Garner
Unverified
4:33
Thank you. I know there's been some drastic changes and some communication efforts that maybe have not gone where we wanted them to go, so we really appreciate you being here. This meeting is not to blame anybody, state, federal, but it's to figure out what's going on and how we can fix the issues. thank you for being here. It's
Speaker 25
4:53
my pleasure, thank you. Thank you for having me. And actually thank
you for everybody that's here today on different committees to kind of get an update and even some of our providers who are here in the audience with us today to get kind of a better understanding on where we are with child care and making sure we define quality and how do we deal with voucher programs and some of those components as it deals with federal investments as well as state investments so if i could i'd like just kind of give an overview to give some background knowledge on where we are and why we're having to act with a little bit of sense of urgency and then maybe
talk about some solutions or some next steps if that sounds
Representative Denise Garner
Unverified
5:35
fair that sounds great and and i think there are some communication um some miscommunication about covid funds so when you talk about covid funds i think when most people talk about they think about arpa funds for covid so if So if you'll talk a little bit about the waivers and how those have been changed.
And it's not really ARPA funds, but just explain that a little
Speaker 25
5:59
bit better. Sure, I'd be happy to. So first thing I'd like to do is clarify, unlike some of the social media posts,
I am a big advocate for early learning, and I'm a big believer in high-quality early learning programs. I've spent most of my career supporting education. I'm getting over 25 years, close to 30 years. I started most of you know as an elementary school teacher when I was an elementary school principal I added early learning programs to my school when I became a school superintendent we added early learning programs to all of our elementary schools so unlike some of the narrative that's been going around I do want to clarify and advocate for early learning since day one when
I've come to this state that's part of the investment that I've incurred the legislature school districts private providers communities to rally around and and if we know anything about the The research and the studies that we see in that space, there's some studies that say every dollar that you invest in early learning gets about a nine-time return. And when you talk about quality of life, you talk about overall well-being, you talk about students are ready to be successful beyond high school and also coming to school kindergarten ready.
So anything we can do to support any kind of investment, our agency stands willing to work side-by-side with you to make sure that we can provide high-quality learning environments for all of our students and families and make sure that access becomes a real reality. One of the things I think is important to note, too, is that the legislature and the state does make some pretty significant investments in early learning. I think the biggest program that most of you are familiar with is the Arkansas Better Chances Program,
most people refer to it as ABC. That program serves about 22,850 students currently, and it's about $114 million annual appropriation by the state legislature. Additionally, the state legislature appropriated $22 million for related services for special education students, so that may be in the form of speech, language therapy, occupational therapy, physical therapy, But also in this space to help support access to high quality learning environments is there some federal funds and some federal grants that we receive as a state.
And so in 2025, I think some of the biggest grants, and I'm not going to go through all of them, that we need to look at and consider is the child care development block grant, which is where we're probably going to have most of our conversation today. But additionally, there is some American, America Recovery Act, ARA funds that were part of the COVID funds. There's about $2.9 million that went through this fiscal cycle. Also, the state had a preschool development grant, which is around $18.6 million. We also receive a Head Start grant, even though it's not part of our agency, but it's still an investment in early learning.
And that's around $110 million. But I think most of the question that we are getting asked about, and we've recently issued some guidance, because we're getting ready to go into a new fiscal cycle, which is October 1st. And there's some concerns that we have in regard to the revenue received and the amount of reimbursements that are being paid in the child care development block grant, the CCDBG grant. So I think it's important for folks to understand what the purpose of that grant is,
and then we'll talk to you about where we are and then maybe some ideas for next steps. But that is the main federal law for governing child care programs for low-income working families. And in that law, it identifies seven broad program purposes. So I just kind of give everybody the same background knowledge. The seven purposes is it allows states flexibility in developing programs and policies. It promotes parental choice to empower working families. It provides consumer education to families and promote family involvement.
It's to help deliver coordinated care to maximize parent options and support independence from public assistance, to improve quality through health, safety, licensing, training, and oversight, improve child care and development of participating children, raise the number of and percentage of low-income children in high-quality care. So within those goals, and we look at prioritizing the types of students and families that we want to serve in this program, some of the biggest priority groups include children and families with
very low income, children with special needs, children who are engaging or experiencing homelessness, and foster care children. So one of the kind of good things about that program is we have more families accessing those opportunities to be in these voucher programs now than we did even if you go back to pre-COVID levels. In fact, we have about 1,100 student waiting lists that was established in February. Now it's important to note because I've seen a lot of misinformation going around on how these funds are allocated and dispersed to states. The CCDBG grant is a formula
grant, right? So that comes through the health and human services education committees. It comes to us as a state. We take the dollars that we receive from the feds and apply that to a methodology that historically has been aligned with a program called Better Beginnings here in the state of Arkansas and we disperse that funds. I've been getting asked a lot of questions about well you just got a grant to expand charter schools why can't you use that money to offset costs and shares in early learning why don't you care about early learning why do you only care about charter
schools well like when you look at examples like the charter school grant that was a competitive grant that's a there's a difference between a formula grant that helps fund different programs So like in K-12, think about Title I, Title II, Title III, Title IV. This is similar, even though it comes through a different agency. But then also the federal government, through their active registry, advertises for competitive grants. And I can tell you that as an agency, anytime we want to apply for a grant, that can help make our program stronger, regardless of where they fit on the educational spectrum.
It's in our best interest to do that and bring dollars to support our learning community. And if there are competitive grants on early learning, I can promise you we'll be the first ones to have our applications in because this is something that we want to invest in and make sure that we keep as a priority. So one of the things that I've been getting asked questions are as we go into October 1, right, so things that we're monitoring at the federal level, one, we don't have a continuing resolution to maintain a budget, right?
So there's some very concerns about a budget government shutdown, and these are the funds that we use to reimburse providers at the rates that have been established and the dollars that we allocate to families. But when you look at the current rate of spend and the amount of revenue that we're receiving, it's lopsided. And we knew that we were able to offset some of the spending costs because this grant requires about a 12% set aside for improvement and professional growth and defining quality.
And we were able to use some of those COVID ARPA funds to offset some of those grants so that we can maintain a fund balance that we want to carry over as high as we can for reimbursements. One of the things that we didn't know that was going to happen to us is in this last quarter when we got our allocation and we get quarterly payments, the formula changed and we had an $8 million reduction that wasn't being anticipated for. So that caused us to already go back to and look at the reimbursements rates to say that's a pretty significant hit. As we're getting ready to go in the next fiscal year, what does that look like?
Because we have not gotten our appropriation. typically by this time of year we get what's called a GAN notice the government anticipation notice an award we have not received that yet because congress is still going through the process of developing their budget the last I've seen is there's a little bit of a different in discrepancies between the house and senate side on what that amount should be but our feeling is most of the feedback we're getting when it comes to this grant it'll be level funded so until we get that award we don't know if that level funding is going to include an eight million
dollar reduction that we weren't planning on last quarter moving forward to the next quarter another contingency that's factoring into how we support early child care and we don't know because we don't have a budget yet is another grant called the preschool development grant the pdg grant last year that grant for the state of Arkansas was around 18 million seven hundred thousand Right now, it's not funded on the House side, but it's level funded on the Senate side.
Until we get a budget, we can't plan on spending those dollars. So we had to start immediately really looking over the last few weeks because these were short notices. And I think a lot of criticism I'm hearing from providers, and it's very warranted, is that they didn't have a lot of time to plan and make some decisions. Because we received really short notification that the current revenue and future revenue may look different depending on what our congressional awards are. So we immediately started researching opportunities and things that we can look at to put into place.
And one of the things that we needed to look at was the rates that we're reimbursing our providers. Our current rate scale ranged anywhere from, I want to say it was about $39 up to $75. And then also implementing a sliding scale provision for families. Part of even the spirit of the grant is that participating families are expected to contribute to the cost of care on a sliding scale basis. We hadn't really been implementing that for a while or at all. And so one of the things that we wanted to accomplish moving forward into October 1st is establishing a fair sliding scale that would make sure we prioritized our families in greatest needs
so that they wouldn't have a copay, especially if they were under 45% of the state medium income all the way up to the 85% state medium income, which is part of the threshold for qualifying for that grant, so that the copayments wouldn't be typically around 4% of what the reimbursement rate is. So as we've been rolling this out, we've talked with our local leads. I've heard from several providers. I'm sure you've heard from several providers as well. And some of the things that the feedback that I definitely hear pretty consistently is that they would like to have a little bit more time, right, to figure this out, that this kind of sprung on them pretty quickly.
And they want to make sure, like, if we have to make adjustments, that they can do that with due diligence. And one of the concerns that I've been sharing with them and I've been sharing with legislators is, without knowing what our future appropriations is, is every week that we put a pause, We have to look at the fund balance that we have in our grant, not knowing when the next award is going to be. We can't make allocations for programs for revenue and dollars that we don't receive. So we know that this has been quite a change and quite a lot to happen and digest in a very short amount of time.
But as I stated, I've been meeting with a lot of folks in this space. In fact, I had a great meeting with about eight providers earlier today before we came in to sit down at the table and say, how do we make this palatable, right? And I think what's great about our field is that they understand that if we have to make changes, they just want to be a thought partner and have a seat at the table and be a part of the process. And I can tell you from our agency is we want to do everything we can to mitigate like any changes to levels of service for students and families.
And we don't want to do anything that's detrimental that are caused great undue hardships overnight. So one of the biggest asks that we have received continuously is like, can we just pause for like 30 days before the new rates go into place and the reimbursement rates go into place and get a better understanding because they're under contracts. They have employees. They have budgetary concerns as well. And is that something we can consider? And so we've kind of gone back and looked at current payment rates.
And one of the proposals I think that we could look at is one thing that we do need to do is start implementing the sliding scale for families. And my recommendation is to keep that on track to go forward with an October implementation. We've been notifying families. We've been notifying providers. But if we pause for 30 days or went to November 1st on reimbursement rates and get kind of a really good working group around here to maybe come up with some better ideas, I think we can do that and make that happen depending on what happens at the federal level.
Hopefully all of those budgetary discussions get resolved. across the finish line and we can get the appropriations to make it but what I can assure you is as I've met with everybody the current model that we have is unsustainable and when we look at the current ways that we have a wide range of reimbursements we can't keep funding at that level unless the state or somebody else makes a significant contribution so right now if we just said well what if we want to leave everything alone and leave it all the same it's probably
about 80 million dollars a year that we're that we would need to invest as a state so that's that's the conversation that y'all would need to have obviously I don't have the authority to to make those kinds of decisions but I do think there's some strategies we can implement such as the sliding scale that should be implemented less than five percent of our families were given anything on a co-payment and then continue to work with providers to come up with a reimbursement rate that recognizes quality, that gives providers an aspiration towards improvement,
is something that we are willing to continue to do so that
Representative Denise Garner
Unverified
20:27
we can get this right. Before we go on, could you just talk a little bit
about the amount of money that has been withheld and what the gap is
Speaker 25
20:39
and how that's different? Sure. So if you look at the fiscal year 24 allocation, for the CCDF allocation, it was, and I hope it's okay if I round a little bit, it was about $137 million in 24.
That's the amount of allocation that we received in 25, and then we were notified last quarter that that allocation was reduced to 127. So if we're looking at level funding moving forward, we have to plan for that to be 127 because that's kind of where it left off and that's what we're expecting. And then, Chair, if I could also, I think part of that was in 24, we received $9.6 million
dollars in the preschool development grant which is what we received in 25 which would be scheduled to sunset in December and we don't know if that's going to be picked up in the legislative appropriation for next coming school
Representative Denise Garner
Unverified
21:47
year or not as of now see the CCDBG and the the PG PDG there's a lot of fun acronyms there are and and actually I do want to let you know that I did put some acronyms on the on the table for the members I know there's a lot I thought
there were a lot in medicine until I got into education but anyway there are some acronyms and they're not nearly all of them so if you don't mind just kind of make sure that we sure we get that when you're talking but anyway
the the right now those two grants are level right and so no we know
Speaker 25
22:26
ma'am and that's why I I want to be clear. At least in the Senate. Correct, but it's not in the House. And that's why we have to be very realistic and cautious about building a budget
Representative Denise Garner
Unverified
22:38
because we don't know what it's going to be. So it's actually a nutrition that's been cut completely, right? And the college program, those
two were cut. The parents, the student parents.
Speaker 25
22:59
Yeah, and I don't know how much we received as a state in that one because that was a pretty small allocation at the federal level. I want to say it was like a $75 million federal allocation nationally.
Speaker 39
23:13
So. Are you talking about the child care access means parents in school? Yes. Yeah. That one had a $75 million national funding level. So I
Speaker 25
23:32
don't really know how much. If we got any as a state, I'd have to investigate that. Yeah, so it was probably a small amount. But we don't know.
Speaker 52
23:43
Like, they're still negotiating through Congress. Okay, great.
Representative Denise Garner
Unverified
23:46
Okay, members, questions? Representative McKenzie. thank you thank you chair um
Representative Brit McKenzie
Unverified
24:05
so secretary lieva appreciate the time today uh two questions really come to mind there's a lot of subject matter here um
and it's important it's a good conversation to
have and i'm sure a lot of providers would like to just talk in a more fulsome way two things that have come to mind one since we spoke about this subject previously was a call i received from a provider in Northwest Arkansas relative to direction they received regarding an authorization form for the new reimbursement rate that's going to take effect October 1 and that they can then now go and apply the differential copay amount to parents to make up for any of that stopgap that does exist but they still need an authorization form in order to fill it out per per student to
figure out what that differential is that they need that I believe by my information today was they need that that form filled out and complete and submitted back to OCE or ADE tomorrow the beginning of the new fiscal calendar for you guys but they still hadn't received that form yet so before we go any further have you maybe some folks back there at ADE can help us understand or if that's a federal limitation how we can go ahead and facilitate providers getting that authorization form so that they can start to track on the out-of- pocket that parents will have
Speaker 25
25:19
to make up yeah so thank you for the question I
I think that's part of the work that we're working on to make sure we get that transition, which is why I think we're looking at if we had to do a quick little pause for implementation, it might give us a little time to work that out. But we need to know moving forward that there's some real grave concerns about the spending levels. So without a significant investment, we're not going to be able to
Speaker 20
25:41
continue operating the way we always have. Understood. Okay. In that same vein,
Representative Brit McKenzie
Unverified
25:45
I'd love to have a better context. You've done a good job of illuminating. I think a lot of us have been hit with questions and emails and then some of the ad hominem about, well, money in this bucket versus money in this bucket.
And we all know education dollars aren't created equal because they come from different revenue sources. But can you help me understand the population of those that have been drawing down SRA benefits? Because I know, I think, based on what an AI summary told me, that in 2007 is when the CCDF as well as the PDG really began in earnest. we did enacting legislation in 2008, and then from there, ADEs promulgated the rules. Can you help me understand the population? So like any other entitlement, and I'm not trying to lead the witness here, but like any other entitlement, sustainability of these programs is really dependent on the size,
the eligibility, and the accountability on the back end. So if we know on an apples-to-apples basis that in 2008 this served 6,000 kids and now it serves over 24,000 kids, we can help illustrate the strain by the pure number of applicants and people on the program. - Yes,
Speaker 39
26:51
I wanna say, if I can read my own handwriting, 'cause sometimes I can't tell if this is a nine or a three,
Speaker 52
26:59
but prior to 2019 to today, we're serving about 19,000 more,
or 9,000, excuse me, 9,000 more students. -
Representative Brit McKenzie
Unverified
27:07
Okay, that's rough numbers, I appreciate that. To that end, and the conversation I had today with a great provider who's feeling the effects of this or will feel the effects of this goes into action tomorrow, a lot of the basis of this, and I think we both understand, as well as anyone that's on this subcommittee or in the greater committee, that in education we work on these policies and specifically the money in a proactive way.
Adequacy takes two years. It's a very long, arduous and important process. one seems a bit we're reacting and and that's okay because like you mentioned there are some dependencies that are outside of our control I'd love to understand in your opinion and again Chairman Garner did a great job of we're not just not to point fingers we're just trying to figure out problems arise how do we create solutions that benefit everybody and not create too much disruption in your opinion what happened how did we get to this point where besides the federal government doing what the federal government does which is wait and delay and defer did we get to this place where we're kind of
having to make quick action within two weeks and then
Speaker 25
28:12
possibly a hold yeah so i think that's a great question and you know one of the goals i think we've all had is that we want to increase access and eliminate deserts and islands and make sure that every family that wants to participate in high quality child care can and um if you can qualify for this grant or this program or this voucher or something else we want to help you do that as we've brought in more families the pot of money hasn't grown and as we've increased quality and we're
paying for reimbursements at a tier level per rate it's a good problem to have in the in the sense that we're increasing quality or increasing access but it required us to create a waiting list if I could go back and in hindsight because we knew that the amount of seats that were going to be available or becoming limited when we established that waiting list in february that waiting list didn't slow down the spending as much as we had hoped or anticipated but we were still monitoring it
but we weren't planning on getting a federal reduction right like at the last minute so we knew that there was going to have to be some adjustments made if if we could have went back in time in february and started implementing the copay based on a sliding scale back then it would offset the speed of spending and started getting these programs in line with where payments met the revenue and um part of the challenges that we have today which is why this is going so fast is because october 1st is the next fiscal year and as we've been receiving federal allocations whether they're
forward funded or current funded and this program is current year funded when we're looking at the reductions that we've received not knowing what the legislature or congress is going to vote on and approve and sign into law we have to make plans based on the revenue that we can strongly predict and that's where these decisions were made one more that's
Representative Brit McKenzie
Unverified
30:13
all right certainly thank you um so i'd
love to know and this may be something you don't have access to but um again
like i mentioned earlier entitlement programs it's important to create a program that has long-term sustainability do you have any access to information or is it something that's percolated up to ADE or OCE relative to the percent of parents who draw an SRA that do pay a copay because through some of my research in preparation for this committee meeting there's some facilities that just don't they just don't collect it a because the math and the admin time that goes into figuring out what the percentage of the deferential you're allowed to apply is either nominal or it's it's hard to extract that money and we all know that
people that have owned or operate businesses chasing that money can be more of an investment of your time but I'd love to know how much how much of the burden share is actually happening with SRA applicants and families that draw down currently the number that was shared
Speaker 25
31:06
with me is less than 5% of the families have a copay right now. Thank you chair, thank you for the latitude.
Representative Denise Garner
Unverified
31:30
okay thank you representative fought thank you madam chair
Representative DeAnn Vaught
Unverified
31:38
and so you said less than five percent have a copay right now so what is their copay as of right now and what will the new
Speaker 39
31:51
copay be well many of the recommendations with the copays let me see if I have it here in front of me is to make sure that
students that are in the greatest needs don't have to have a
Speaker 25
32:05
copay so if you're below the 40 percent of the state medium income and it it's kind of a nuanced question because it also depends on if you have an infant a toddler or an after-school care so it varies a little bit but for just kind of overall perspective if you are less than 40% of the state medium income that you would still maintain a zero copay zero dollar copay if you're between 40 and 60% and
I'll use toddler a full-time toddler for example for example the copay recommendation six dollars and ninety-five percent and then if you're greater than sixty percent it was ten dollars and forty three cents which which is about 4% of what the recommendation is for the family wage. The feds say you can go up to 7%, but these were set at 4%. Okay. May I ask
Representative DeAnn Vaught
Unverified
32:59
another one, ma'am? Thank you, ma'am. So I think we would all agree zero to five is one of the most important stages of education that there is, correct?
Correct. And I know that some went to a meeting this past weekend, SREB, and I want to say Hunt Institute, where no other state was talking about this. And we're the only state talking about this. So I want to know why we are the only state who's talking about these cuts when we know zero to five is the most important time for education to take place. I know that I personally had one daughter who was about to have her third child.
It was too expensive for her to actually work, and we want people in this state to work, so we have to find a way for them to have care while a parent is working, right? So my
question is, I don't understand why we're the only state talking about this. We're not, and I don't know why they're telling you
Speaker 20
34:01
that, because I've been talking to a lot of other states. Can you tell me where those states are? Indiana, for one, had an allocation readjustment based on their federal guidelines that I know for a fact.
And you keep saying we're talking about cuts, right?
Speaker 25
34:16
Like, we get so much money from the federal government that we redistribute. And we started making recommendations around reimbursement rates, whether they're the right ones or the wrong ones. I'm not disagreeing with you about the early learning investments. What we're talking about, you want to compare us to other states. If you look at our proposed rate for infants, and I'll just look at infants, our proposed reimbursement rate is $36.11, Missouri's, who touches us, $24.50,
Oklahoma, who touches us, $20, Tennessee, who touches us, $34, Texas, who touches us, $31.80. So our recommendations is still well below the federal recommendations for a sliding pay scale, which is
Speaker 96
34:58
significantly higher than the states that surround us so that we can do exactly what you're saying is keep that high-quality investment but make sure that this program is sustainable. Because the last thing I want to do is set up a reimbursement rate that at Christmas we've got to call everybody and say we're done, we spent all our money.
Representative DeAnn Vaught
Unverified
35:21
And I can understand that. But, again, we do know this is the most vulnerable group. And, again, Southern Regional Education Board, where they were talking about this exact thing, there was no state in the southern region who was talking about this. Well,
Speaker 20
35:36
and I can't speak for what they're telling you, but if you
Speaker 96
35:40
just Google funding cliff and early learning, this has been written about for several years, and states have been grappling with this for several years, because we got a large amount of money during COVID to incentivize providers to open.
And we did that. The state did a wonderful job. They said, you're the most important people to us. We want to give you the most amount of dollars that we can, and we established rates that did that. That $60 million has all been obligated. So we can't keep maintaining that level of payment if the revenue doesn't match it. What I'm telling you is I made recommendations based on the federal appropriation we see. If the state wants to make a state recommendation or appropriation, we're willing to roll up our sleeves and help make that happen.
but I can't make a federal pot of money increase when I have no control over
Representative DeAnn Vaught
Unverified
36:30
it and I understand that I I know you're getting aggravated I'm not going at you I'm not going at you it's but when you're saying that no other state
Speaker 96
36:37
is dealing with this that's not true but I'm sorry at
Representative DeAnn Vaught
Unverified
36:40
SREB no other state brought it up well maybe that's why I don't go to their meetings we were the only state who brought it up so that that is a red flag for me when no one else is bringing it up and I'm not going at
you again sure again i believe this is the most important years of children and if we
want to read on a third grade level this is a very important need that we need to figure out how to sustain and i do believe it has to be sustainable i'm very conservative whenever it comes to money so i totally get what you're saying but i also would like for us to figure out some way to help these uh these providers thank you madam sure thank
Representative Julie Mayberry
Unverified
37:22
you representative mayberry hello thank you thank you madam chair um i've got quite a few questions but i'm going to try to
give just a few and then get back in the
queue um i'm i'm perplexed with why we did not have to promulgate rules for this significant of a change. Can you help me understand why we aren't going through a rules change when we're going through such a drastic change on
how we're funding this program and how we're looking at this? Can you explain that? It's a
Representative Julie Mayberry
Unverified
38:04
Okay, but it's still run through our state, and we have rules governing the Arkansas Better Chance Program. Which is a state program. And this
Speaker 39
38:18
money goes through. And that's why I'm trying to make sure
Speaker 25
38:22
we understand. The ABC program that we have rules around is a state-funded program. And if the legislature wants to invest in that state program, which I don't think has had an investment increase in quite some time from what I'm being told, if we want to expand raise payments rate quality do all those things that's a state program we're
willing to help work with you and make that happen that's up to this legislative delegation what you're speaking about is a federal allocation that they have on a formula that we redistribute as a state agency because we're in charge of distributing that
Representative Julie Mayberry
Unverified
39:03
federal allocation It's not a state program. Okay. So in the past, we've been paying based on the level of care that the daycare is providing,
that the early childhood center is providing. I absolutely love that. We want to increase the quality of that care. And actually one of the things that I absolutely loved about the LEARDS Act is that we moved early childhood education from DHS and moved it over to the Department of Education because I felt like, okay, this is a great step forward that we're seeing these years as really very important years, the pipeline to reading by third grade and all that.
And so it was set up to allow those early childhood learning centers who were providing that extra step, whether that's, you know, all the different levels that are there and all the different things that they have to meet to get to that higher level. And now it's a flat rate. So when did that idea come up? Because I can't imagine that that just suddenly came up in the last week or two based on the information that you can easily find online now about what you're doing.
So this must have been some idea that internally has been discussed, but perhaps externally has not been discussed. And that's why you have all these folks sitting here going, where did this idea come from? Yeah. And
Speaker 25
40:41
question. And this came from we had to look at what our federal allocation was, still not knowing what next allocation is going to be, but using our best prediction and had to reduce about $6 million a month in allocations of spendings that we're not receiving revenue for.
so yeah this this was a big deal it hit us fast but when you're spending six million dollars more a month than you receive and you have a
Speaker 96
41:07
new federal fiscal year starting with not enough fund balance to make it through a month you have to do something drastic so do we want to do a quality indicator and a tier and recognize for service and support a thousand percent I think we're all on the same page here I know like a lot of people are frustrated this is a federal allocation if we want to make a state state investment then we need to talk about that but
i can't control the allocation that we get in a formula but i also know that i can't start making payments that are six million dollars more a month than i have in that grant because by christmas when when you think we're upset now and i tell everybody we spent all of our years allocation you're all are closed you're definitely getting those calls too and i do want to remind this legislature that this is one grant and we don't have a budget for a lot of federal grants that cover a lot of things
Speaker 25
42:00
to do at education that we need to stay on top of to make sure because i i
think there's more deeper conversations coming so
Representative Julie Mayberry
Unverified
42:07
so again kind of following up to to to ask when did this idea come up
because the idea has been you know a sliding scale that a level three would be compensated differently than a level four and a level five right um so when did that conversation about three
Speaker 125
42:25
weeks ago three weeks ago that idea was never
Speaker 96
42:29
brought up no because we we don't have enough money to keep paying for a system that's not generating the revenue it gets so we had to
model out and we looked at what neighboring states are we looked at what a sliding scale is going to be we looked at what we can do to help prioritize the needs of our providers while students serving the most students and families that we can is started with a rate and that's why even in our guidance we said we are going to build out a tiered quality as we move forward but we have to reduce the amount of dollars going out the door that are coming in fingers crossed congress gets things across the finish line grants are restored things get better with a need i can go back to the field
and say good news we got more than we projected but when you're projecting like a low amount and we can't keep sustaining that at the point because we're not allowed to run a negative balance. We're not Congress, right? Like, we have to present level balanced budgets, and I know it's painful and it's not fun, but I think when I talk to the field, they understand that there's probably some adjustments that need to be made. They've asked, like,
Speaker 25
43:36
can we just not do this so quickly? Can we have about 30 days to help process?
Let us work with you. Let us look at these amounts. Let us define quality. I'm willing to do that. But I'm willing to
Speaker 96
43:48
do that to make sure this legislature knows that if this government shuts down for another three weeks, there's no
Representative Julie Mayberry
Unverified
43:55
money to pay these people at all. Okay. But also going back, so let's just say three weeks ago, this is when the idea came up with you and you all became aware of the situation. Was there any phone call or meeting to people who this might greatly affect and say,
hey, this is what we're being told. We want to come up with some ideas. Was there any effort to involve
the stakeholders in trying to come up with a solution instead of finding out in seven days this is the solution, no ifs, ands, or buts? And I think that's where there's a lot of frustration in the situation that's going on. Which is why I'm publicly saying, I hate that
Speaker 96
44:34
we're here. I didn't ask for this. I don't disagree. Do we want to be transparent? Yes. Are there things we can look
Speaker 130
44:40
in the rear-view mirror and say, I wish I would have done differently,
which is why we say the windshield is this big, the rear-view mirror is this big. These folks
Speaker 96
44:50
want to come to the table and have that conversation. But when you're under the gun to have an October 1 budget, it's hard to get a lot of input. So did we meet with local providers? Did we talk to our team? Did we look at
Speaker 130
45:02
other states? Did we ask as many people as we could? Yes. Is this the perfect solution? No. I'm not disagreeing. But we have to do something.
Representative Julie Mayberry
Unverified
45:11
Okay, I'll let someone else ask questions. Thank you.
Representative Stetson Painter
Unverified
45:17
Representative Painter. Thank you, Madam Chair. Secretary Lee, I appreciate
you being here today. I know we've thrown some numbers and different things out there. What is the exact amount of dollars that the gap is of decrease in funding? Right now, when
Speaker 25
45:36
we look at our current spend rate and our projected revenue, it's about $6 million to $8 million a month. It's hard to give you an exact number because it depends on days of reimbursement and how the different categories factor in.
But it could be somewhere around $80 million a year. Gotcha. And sorry for my
Representative Stetson Painter
Unverified
45:57
lack of knowledge in this area, but those co-pays are paid every day, correct? Well, I don't know. Or not paid every day, but that amount is every day. Factored in every day. Yeah. And I think you mentioned earlier, too, and I appreciate you saying we're not like Congress, and I'm very thankful that we're not like Congress and can run up a debt we can't afford. But you said you might take a pause for 30 days. What does that look like, and what does that look like for our providers?
Because when I think of a pause, that's a little concerning if I was in their
Speaker 39
46:30
shoes about that. What I think the providers, and they've
Speaker 25
46:34
been not afraid to share their opinions, said can we not implement this October 1, like can we pause on the implementation of the new rates or reimbursement rates till November 1st, let's just say 30 days, rounding numbers. And I feel like we can, but what we can't pause on is starting to implement the copay. We have to start reducing spending in this grant.
If we can still reimburse the providers at their current rates while we come up with maybe a different methodology while starting to implement the sliding scale, we should be able to have enough fund balance to get us through that next month or hopefully through the next quarter if we can get an allocation or a continuing resolution signed and
Representative Stetson Painter
Unverified
47:20
across the finish line. Do you, Secretary, anticipate maybe some future more
Speaker 138
47:26
allocations from the state in this area?
Well, I think that's the conversation we
Speaker 135
47:32
should have. Just based off what things are going on at the federal level. If this is the
Speaker 25
47:38
standard that we want to provide as a state, right? So let's say, like Representative Mayberry says, we love these tiered services. We want to pay for these tiered services and these qualities. At the current level that we're paying right now, keeping everything in place, will we need to invest as a state? Yes. And it's going
Speaker 144
47:58
to probably be about $80 million a year.
Okay. And just $80 million, is that correct? That's
Speaker 25
48:05
a rough number. Rough estimate. Right. I'm just giving you a – that's why I say it's hard to calculate because the reimbursements are different. But if the state wants to make that investment, they can. and I will remind folks that this is a federal grant. So the state has an investment in this federal grant. It's around $10 million, right? If we increase that, that means we've got to do that in perpetuity because the maintenance effort for a federal grant was supplemented to supplant.
The state also has an ABC fund that's a state program that's $114 million. If you want to build that out, maybe make an ABC 2.0, look at reimbursement rates, look at tiered quality, invest in a state program, access quality, we could do that too. Right. I appreciate
Representative Stetson Painter
Unverified
48:54
that, Madam Chair, and I just want to reiterate for the record that you're looking at doing a pause until November 1st with the current rates. Yeah, make sure I
Speaker 25
49:07
What we're looking at is not changing the reimbursement rates to providers for about 30 days so that we can get them a little bit more comfortable. they are businesses too and they have contracts they have payroll they have been very clear like I feel for the most part they understand the need to make some adjustments to this program they just need a little more time and want to have more voice to help make those adjustments and we're willing to do that I do think we need to start implementing the sliding scale for co-pays
for families because we can't just pause this program we'll run out of money by the end of the month.
Representative Stetson Painter
Unverified
49:45
Right. No, I appreciate that. Thank you, Madam Chair, for
Representative Denise Garner
Unverified
49:48
the great amount of questions. Thank you. Thank you. And I just want to clarify a little bit about the parent copay for October 1st. So if we're saying that we're going to take a 30, we could take a 30 minute or 30, 30 day pause. How are we working the copays for the parents? We're talking to parents still that don't have any idea that this is happening or what's going to
happen. So well, and that's where we
Speaker 44
50:12
It would have to provide additional support to the providers and communicate with
Speaker 25
50:17
the parents. Like I said, if you're under 40% of the threshold, there's not a co-pay. 40% to 60%, there's a little bit of a co-pay. Above that, it's a little bit more. If we stay the status quo and don't get a congressional delegation, there will be no money in this pot to give providers. I get
Representative Denise Garner
Unverified
50:35
that. I do understand that. I'm just a little bit concerned, a whole lot concerned, actually,
that we've given less than a pay period to these parents
to figure out how they're going to pay for child care. Right, and
that's why I'm saying. With the co-pay that goes up by October 1st. And
Speaker 25
50:53
I want to work with the providers. I want to work with this delegation. What I'm telling you is if we don't do something, this pot of money will not have any money in it, and somebody's going to have to fill this pot of money with money from somewhere else, and I don't have the authority to do that. okay representative brooks thank you madam chair secretary oliva thank you for being here and
Representative Keith Brooks
Unverified
51:19
and all the information also want to thank all the providers and initiative parties for being here as well i know that it takes a lot to step away from day of work and so appreciate everybody so a couple questions probably general follow-up on um some that have already been asked uh just to re-clarify the re-clarification from representative painter so the pause of 30 days we have the money in the pot for
Speaker 39
51:43
the pause of 30 days to continue provider payments as long as we don't have a long-term
Speaker 25
51:48
congressional shutdown of at the federal level we should get our next
quarterly payment if they sign a continuing resolution that would help fill in
Representative Keith Brooks
Unverified
51:55
that gap okay because obviously i think this is you know a primary issue is businesses have payrolls and families have budgets and that's what we're trying to all wrap our minds around so when it comes to um so two more questions madam chair when it comes to the communication i know we've uh this this runway has been very short in terms of uh communications to providers and to families what what has the communication been to providers uh specifically in as well as families letting them
know what the change is and and what will that look like if we haven't done it as comprehensively as we need to what will that look like in coming days to make sure everyone is very aware of
Speaker 25
52:35
what's going on and and we can continue doing a better job of communication but we we did host a couple webinars for providers we know some fighters weren't able to do that we sent them everybody in our system some emails and follow-ups that included sample letters that they could share with families they could tailor it to however they wanted to to help provide that information
Speaker 39
52:55
Okay, so the providers would be expected to communicate to the individual families? That would probably be the best line of communication, yeah.
Representative Keith Brooks
Unverified
53:04
And so we've talked a lot about the different tiers, the six different tiers within our system.
Can you give just a little bit of a background as to what, and you may have already said this, and I apologize if I missed it, but what the different tiers are and what the difference is in those relative to reimbursement as well as relative to a quality discussion of those tiers?
Speaker 25
53:25
Yes, I don't know if I have the current tier system with me, but I know like for early childcare, it could range based on the lowest level from about $39 per day, all the way up to $75 per day based on the quality index. And do you know what, and if
Representative Keith Brooks
Unverified
53:44
we don't have the information, Madam Chair, if we could just request maybe get that from staff out to the members, but do you know what those different tiers represent from a quality standpoint in terms of the recognition of different reimbursement levels?
Speaker 25
54:02
an instrument on how the program's been evaluated using the environmental rating scale. I think when you get to the higher tier, it also looks at ratios, which is why they're reimbursed a little bit at a higher level. So it looks at those different factors. There isn't as many level sixes that are at the upper, upper level, but I think where you see a lot of our providers are on that three or four index. Thank you, Madam Chair. Thank you.
Speaker 165
54:30
Representative Brown. Representative Brown. Thank you, Madam Chair. Representative, Representative,
Representative Matt Brown
Unverified
54:35
Secretary Oliva, thank you for being here today. Could you just sort of from a 30,000-foot view tell me the difference or if there's an overlap between
the federal program we're discussing today and the ABC program? Yeah, so
Speaker 25
54:51
I wouldn't say there's really that much of an overlap. I mean, maybe some of the criteria for qualification if a student or family might want to participate,
but the ABC is a state-funded program. It sets a daily rate. It currently serves about 22,847 students and it's a flat rate of 5,105 and it's required to have 178 days of instruction, which is about $28 a day for reimbursement. But then there's also, I want to say about a 40% in-kind match, which is why you see mostly schools doing that because they can provide space and power and furniture and electricity as the in-kind match.
where the CCDF funds is a federal allocation. Thank you. And so they both
Representative Matt Brown
Unverified
55:43
serve the same age group? Well, ABC, I believe, was recently
Speaker 25
55:49
expanded from birth to five. It used to primarily be three to four to five-year-olds, but it was just recently expanded. And the CCDF?
Representative Matt Brown
Unverified
56:00
Well, it goes all the way
Speaker 25
56:02
up to, I want to say, age 13 is a qualifying age.
Representative Denise Garner
Unverified
56:07
But from birth, you can qualify all the way up to age 13. Thank you. And did you say how the
Speaker 41
56:20
parents were notified of the rate changes? We sent sample letters to providers to share with families. I
Speaker 25
56:24
don't know if we have direct access to all their information. Oh, and they send an e-mail to every family as well. So
Representative Denise Garner
Unverified
56:31
you sent an email to every family and then the provider? If
Speaker 20
56:35
it was in our kid care system, they received an email.
Representative Denise Garner
Unverified
56:39
If they're not in our care care system, they don't have it. Order, point of order. If the audience will hang in there with us, we'll get some answers to these questions. Thank you.
Okay, so you sent an email to the families that you have information on? If they're in the
kid care system. And then sent the information to the providers? Yes, ma'am. To make sure that they could tell the families? Yes, ma'am. Okay, and they were notified that they needed to tell the families? They were
Speaker 20
57:04
given a sample letter they could even share with families. Okay, thank you. Okay.
Representative Jessie McGruder
Unverified
57:10
Representative Magruder. Thank you, Madam Chair, Secretary Oliva, and your staff. We really appreciate all the work that
you all are doing. I'm hearing everything that you're saying. It seems as if you're trying your best to lay down on a sword in this situation because this is a federal government situation. But lack of a better phrase, I would trust Dracula at a blood drive before I could trust what the federal government is doing right now.
We are truly suffering, and this is an issue that we must address. I've done the numbers. 13, 1306 total kids are on our wait list. 29% of these centers that are being affected about this are in Senator Murdoch's district, and this is a real concern. what can we do to stop situations like this happening? Because I'm a father of six. My children were a part of the ABC program.
I loved it. But I was part of that 5% that had to make a payment. So there were days when I was dodging the provider because I didn't have the money to pay it because I was a young man who didn't just have the funds. And I know working on a budget is very difficult. And this is very hard for the families who are experiencing this right now. And I know it's fright. I know they're worried because your children depend on you. We are elected by a group of 30,000 people. And I know the audience wants to make comments, but you need to be reaching out to your legislators right now so they can make comments for you.
You need to know exactly who represents you in your area. I thank you for laying on the sword, but my question to you and my question to us all, what can we do to help in this situation? because I don't want these families suffering because, thank God, my baby is 16 years old and I don't have to deal with child care, but I will have grandchildren and everybody isn't financially stable enough to pay $300 for child care or even the $50 that they're asking for per week. It's a bad issue for people to be facing right now,
especially people in the low socioeconomic background. And this is what ABC has designed for children from zero to five, which was great in 1991, to have that education background before they get to school. So I just want to know what we can do to help alleviate some of this stress. I thank God that we're holding over until November 1st, if possible. But I know that's right around the holiday season, and everybody's going to be pinching pennies during that time and making sure they can get something done. So what can we do as a body? Do we need to be reaching out to our U.S. representatives or what?
Speaker 25
59:51
I don't think that would hurt. I mean, and that's why I go back to there's a different funding recommendation on the House side than the Senate side. I think the Senate side may be a little bit more favorable to the folks that are in this room to reach out to them and encourage them to adopt the Senate proposal would be a little bit more funds back into this program. But then I also go back to as a state, like you're referencing ABC, which is a state-funded early learning program. If this is the quality of care that the state wants to provide for all the students and families,
then it's going to take a significant state investment because I don't know if we can rely on a federal allocation to make sure that you can maintain the program the way it is. Right now, with the allocation we're projected to receive, it can't maintain that same level of service without a state investment.
Representative Jessie McGruder
Unverified
1:00:46
Thank you, and I believe he's correct as far as the state investment, and we have him doing so many different jobs right now. And everything we're handing over to the Arkansas Department of Education,
they can't continue managing all this. I'm speaking for them. He hasn't shared that with me, but we've got to figure out something here at the state level to help out. Okay,
Speaker 185
1:01:19
Representative Steele. Thank you for here, Madam Chair. Thank you, Madam Chair. My first question, I have
Representative Tracy Steele
Unverified
1:01:23
just a couple, but my first question is along the lines of Representative Mayberry, so it won't take long at all.
The question, I'm going to ask to when did you see this coming? She actually covered quite a bit of that, but my question is a little different. It's more along the lines of you're a person that's here in this chamber just about as much as we are. My question is, why didn't you let us know before the decision was made? I think there was an extensive presentation by you a week ago, and we talked about education, the future of education.
Absolutely no mention of this situation. The way I found out about it was from my constituents. I'm the elected one and should maybe be the other way around if we're informed. But my question is, why not come to us before you make the decision so that we can have this type of dialogue and maybe come up with a solution
to this problem? Sure. I think that's fair feedback.
Speaker 25
1:02:34
And I think the reason why this happened so quickly is because when we started getting a handle on these allocations, We knew we had to make quick decisions and act with urgency because we wanted to give people as much information or time that they knew or so that they would know. But as this stuff comes forward, I'm more than willing to involve any stakeholders. We meet with lots of different committees, lots of different legislators. So we want to, if we need to do better at that, we can do that.
Representative Tracy Steele
Unverified
1:03:07
Yeah. Well, my question is, why not tell us as legislators first so we would better be able to respond to our constituents when something like like this happens? Yeah. And I
Speaker 25
1:03:18
meet with a lot of legislators. I don't meet with every single one, but we have been meeting with with key legislators as well. We probably could do a better job giving you more information so that you're
Representative Tracy Steele
Unverified
1:03:32
better informed on the front end. Let me also ask you about the quality of care, evaluation, reimbursement process.
Mr. Secretary, would you agree that quality of care sometimes costs resources? Yeah, and I think we've
Speaker 25
1:03:46
had that discussion. If we can come up with a way to recognize quality of care and incentivize providers to provide more opportunities and better serve their students, then we should recognize them for that.
Representative Tracy Steele
Unverified
1:04:02
But in the reimbursement process, as it is now before you change it, the reimbursement process already has built in different reimbursements
based on the number they receive from their evaluation.
Speaker 44
1:04:15
Is that correct? Under the Better Beginning scales,
Representative Tracy Steele
Unverified
1:04:19
the two through six? Yes, sir. Okay, so with that quality of care reference, some of these individuals who own these child care centers have invested resources to get better trained people, higher educated people, so that they can provide the quality of care that our children deserve. So they've already made that investment. So how do now, in a short period of time, they go back?
Speaker 25
1:04:46
Like I said, I'm not disagreeing with you. What I'm telling you is we can't continue to pay for that quality of care under the amount of dollars we receive. So if the state wants to
Speaker 130
1:04:58
make an investment, we can go back, work with these providers, get this across the finish line. The
Speaker 20
1:05:05
federal appropriation that we receive can no
Speaker 185
1:05:08
longer sustain that level. I understand that. But this process, this legislative process, which
Representative Tracy Steele
Unverified
1:05:12
if we would have known this train was coming a little sooner,
Or if we would have been informed a little sooner, there could have been an opportunity where we could have done things a little differently, even including the governor's office in this. There is something called a special session, and I'm not advocating for that, but I'm just saying when we as decision makers come together and discuss and dialogue, it's amazing sometimes what we can do. But what we find out after the fact, and it's already done, it's much more difficult to go back and undo something.
Representative Andrew Collins
Unverified
1:05:56
Thank you, Madam Chair. Thank you. Representative Collins. Thank you, Madam Chair. Thank you, Mr. Secretary. So there have been different ideas, you know, thrown out here about communication and about maybe moving things a little bit, delaying them. I think my personal preference would be to not make these changes. And to do that, I understand we may need to backfill some money that won't be coming from the Feds. You said $80 million.
I realize that's not an exact figure. But $80 million, are you saying that that is what has been cut from the federal allocation that we have? And just so I am clear,
are you saying that that is all the CCDBG money? that is being cut yeah so
Speaker 25
1:06:46
there's a couple programs that i've talked about that have been maybe reduced a little bit which is the ccdf allocation we don't know what the preschool development grant is going to be which is around 18.6 and the reason it's 80 million is because
we've been building off a fund balance to make these reimbursements rates that we were able to to as we looked at the sunsetting of COVID dollars and paying some grants off we were able to use these grants or these funds to build up a fund balance which is why we're able to continue these payments we knew that this fund balance was going to start deplenishing which is why we put in the wait list in February it didn't have the impact probably as quick as it should like I said if I
could have gone back in time I probably would have started implementing the copay on a sliding scale or recommended that in february to slow down the spending but the spending at our current rate is going to leave about an 80 million dollar deficit this
Representative Andrew Collins
Unverified
1:07:48
next fiscal year okay so you know as we you know i think have all agreed there it's unlikely that this won't be reauthorized and it may be reauthorized at a flat rate i'm talking about the cc dbg fund so you're saying that 80 million dollars was our burn rate from that COVID money that we were spending down a balance at the rate
Speaker 39
1:08:07
of 80 million dollars a year currently if if this is why I go back to we're spending about six to eight million
Speaker 25
1:08:16
dollars a month than we receive so if I take the amount of money we receive and then look at the additional dollars that we've been putting towards it it's about six to eight million dollars a month which is why we've got to slow down that spending which is why we added a wait list. So
Representative Andrew Collins
Unverified
1:08:31
it's really not what's been going on on the federal level. It's what is running out from, I mean, I guess in some way it's federal money, but you're saying it's a hundred percent of that
80 million, whatever it is, six to $8 million a month is COVID spend.
Speaker 39
1:08:45
Not a hundred percent. Okay. Because about $30 million was part of that's
Speaker 25
1:08:50
part of a reduction as well. So it's a combination of both storms hitting us together at the same time. And what's
Representative Andrew Collins
Unverified
1:08:58
the $30 million reduction? We
Speaker 25
1:09:00
got a reduction in quarter four on the CCDF grant, and we still don't know about the future of the preschool development grant. And
Representative Andrew Collins
Unverified
1:09:09
how can you break out what's what there, what's CCDF and what's preschool development?
And so you say $30 million, can you separate out those
Speaker 25
1:09:23
two? Yeah, I mean. I just want to know where the $30 million is. We received, our fiscal award for 25 was just about $136.5 million in CCDF. We got a fourth quarter notification that the formula was updated. We actually received about $127.5 million. So round off about $8 million or so. If that's carried forward to next year, that's $16 million.
The PDG grant was funded at $18,670,000. That sunsets in December, if that's not reauthorized in this budget, that's another reduction that we don't know if it's going to happen or not. And do we have confidence that that's not
Representative Andrew Collins
Unverified
1:10:02
going to be reauthorized or a reasonable belief that it's not? Well, it's not in
Speaker 35
1:10:08
the House budget, but it is in the Senate budget. But this is why we don't know, right? We
Speaker 25
1:10:15
don't have a continuing resolution and we don't have our next fiscal year budget.
We have not received a GAN award. And that's, I think, is important for folks to know, because typically by this time of year, we get our government anticipation notification award on this is what you should be expected to receive. We have not received that. Our fiscal year
Representative Andrew Collins
Unverified
1:10:36
starts tomorrow. Okay. So just so I'm clear then, so the $8 million sounds like that's from the CCDF. $18 million, you're saying, may not be reauthorized. It may be reauthorized. If it is reauthorized, by the way, and we have made these changes, where does that money go?
Speaker 44
1:10:52
I think that's where we can go back to the providers and say, we've gotten some more dollars
Speaker 25
1:10:58
than we had planned for. And this is where we could look at those tiers of quality, look at reimbursement rates, look at reducing co-pays. I think it gives you some more dollars
Representative Andrew Collins
Unverified
1:11:08
to be flexible with. Okay. And you've put the two years of the
eight together. So that's where you get the 30. So were you saying that you were spending $50 million then in the COVID money?
Speaker 20
1:11:19
I don't know the exact number, but it was pretty significant, yeah.
Representative Andrew Collins
Unverified
1:11:22
Okay, but I'm just trying to dig down a little bit deeper to know because, again, my view, my belief, maybe not everyone's belief is this is where we ought to be, is where we currently are, not making these changes, finding the money. So if we're finding $50 million versus $80 million versus $40 million or $30 million, those are very different things. Sure. And we have to make those decisions as
Speaker 25
1:11:44
a body. And that's why I think it will help when
Speaker 213
1:11:47
we get our next fiscal budget from our congressional delegation, because it could change that number. Okay.
Representative Andrew Collins
Unverified
1:11:53
And the last thing, and thank you for the latitude, is, you know, a lot of these providers have done a lot of things in reliance on the current system as it's been set up. You know, they've made investments to set up things in the way they've done it. So, I mean, I would definitely feel more comfortable leaving things as they are while we wait for these things to resolve themselves rather than, you know, go one way, then another way, and then possibly back to the first way if the will is there to make things right under the current system.
Speaker 36
1:12:23
That's more of a comment. Thank you. Representative
Representative Stephen Meeks
Unverified
1:12:38
Meeks, I apologize. I missed you. Where are you? Way down there. thank you madam chair so I have a question that may not be a very popular question but the concern I what's the total budget that we spend on this program every year I haven't heard that total dollar amount or if I have I've missed it so how much one total are we spending on this every year well I can
tell you what we've or what have we spent because you said there's like an 80 million dollar short fall
Speaker 25
1:13:11
potentially so what's so in 24 the total fiscal year expenditures with all the grants because it it varies
Speaker 76
1:13:17
based on reimbursement rates was about 208 million and in 25 it's around 226 and a half million so
Representative Stephen Meeks
Unverified
1:13:24
just in the last year we've had almost 20 million dollars in growth of the program and obviously i think it'd be reasonable to expect that program to continue to grow and My concern is, is kind of like what you've stated, if the state wants to backfill for every dollar we give them to help them out, we've taken that dollar from another family.
And so taking a dollar from one family to give to another family, it gets to be concerning, right? So my question is, a lot of times when we get these federal grants, we make sure that, and as we pass them through the state, we make sure that the recipient of the grant understands that this is federal money and it could go away at any time. We try to stipulate that up front. And it sounds like we've gotten here in part because a lot of the providers have grown dependent on this grant.
Do we send out information to them to try to reiterate to them that this is federal money, that we can't control it, and it could go away at any point to try to help them plan for these kind of eventualities, or have we just kind of gone by the assumption that this money is always going to be there? Have we tried to, in the past, I don't mean, obviously right now everybody knows it's an issue, but I mean, have we been alerting them to say, hey, this is federal money, it could go away at any time?
time, be prepared for that eventuality? Have we done any of that training in the past? Or is it just, boom, all of a sudden, surprise,
Speaker 20
1:14:54
it's gone? No, I think that's part of the understanding when
Speaker 25
1:14:58
you take a federal allocation, especially
Speaker 52
1:15:01
when it's a formula. It's not an entitlement. It's not a guarantee. It's dependent on the next fiscal year appropriation. Right. And
Representative Stephen Meeks
Unverified
1:15:07
I know we understand that, but have we done things to make sure they understand that?
Speaker 61
1:15:13
Yeah, that's part of the agreement when they accept the
Representative Stephen Meeks
Unverified
1:15:16
funds okay I'm just just as I get feedback as
we go on to the future with these if there's a way to make sure to help drive that point home that these federal funds are potentially temporary and could go could go away because it sounds like to me that potentially we've created a dependency here and cause this got us to where we're at. Just some feedback to maybe try to help prevent these kind
of things happening in the future. Thank you, Madam Chair.
Representative Brit McKenzie
Unverified
1:15:58
Representative McKenzie. Thank you, Madam Chair. I mentioned it earlier. We talked about entitlement programs. I'd love to understand better from you or someone at OCE the eligibility requirements. So, again, if we talk about sustainability of this program and having to ombuds against federal government, you know, lack of responsibility or dereliction of duty from funding programs on a continual basis, then it's incumbent upon us -- I mean, there's a lot of talk and a lot of speech here today about how could we let this happen. Well, we all did. We all had an entire legislative session where we could have backfilled or paid more for ABC, and none of us filed that bill.
But I do want to take a moment and say, if the work needs to start today, what needs to happen, What eligibility requirements are we required to, from a federal standpoint, adhere to? And then what can we go in and say, yes, this should be reserved and it should be totally sustainable for those who need it most amongst our community. So what limitations do we have to go in and look at this under the hood and say, you know, those parents that are at, you know, less than, you know, 150% of the federal poverty limit, which I know for a lot of us here in the education committee, we understand that really well
with the free and reduced lunch rates. What can we do to facilitate making program sustainable in
Speaker 25
1:17:09
the future. Yeah so I think we do have a little bit of latitude on defining priority if you're looking at defining access and typically when you look at kind of priority one of guaranteed funding you want to serve all of the families that have foster care children that are TANF eligible that are homeless special education and then when you start getting into different parties that's where you can look at do you want to emphasize infant and child care
do you want to emphasize pre-k do you want 40 percent of the state medium index under 65 that's where you can start sending those tears like team moms is something that typically you would want to prioritize as a state but we we can determine how many families qualify they come up for an annual eligibility these recommendations were so that we would protect all the families that were already in a program and not have to kick anybody out in the middle of a
Speaker 20
1:18:02
cycle okay thank you very much representative mayberry thank
Representative Julie Mayberry
Unverified
1:18:08
you madam chair um can you because this really
hasn't been brought up in other conversation and i realize that the more immediate crisis is what we are talking about but i wanted to get your feedback and also make sure that we all are aware that this does affect the hippie program the hippie program that provides maybe the the stay-at-home mom with an opportunity to educate her child in her own home and this is hitting that home visiting program as well can you speak a little bit upon that
Speaker 39
1:18:47
i may not have that information in front of me because i think that's part of
Speaker 25
1:18:56
one of our grants That's a great question, but let me see
Representative Julie Mayberry
Unverified
1:18:59
if I can get some of that and follow back up with you. Okay, I would appreciate that because I don't think really has been talked openly and is another component of this. Those moms who, like I did, I stayed home with my children, and I'm very thankful for that opportunity to do that. But this is a way the HIPPY program provides great services to those families,
And I want to make sure that we include that into the conversation moving forward if we're looking at some longer-term solutions. The other thing I'm trying to figure out, because you mentioned that this is still a higher rate than perhaps some other states. And I understand that. But what does it cost in the state of Arkansas, I think, is more of the concerning question. I don't care what it costs in Texas. I don't care what it costs in Louisiana.
I care what it costs here. And somewhere in this discussion that took place, because in the program that's now going to be put out there, I guess, it says Benton and Washington counties will be paid at a higher rate. And the reason for that is because it costs more there. Well, if it costs more there, then somewhere someone has factored in what it costs.
So why are we allowing those two counties to receive a higher rate and the rest of the state not? Like, why would we look at just those two counties and what it actually costs to provide the services there and just tell everybody else, well, it's less than or it's more than what you would receive in another state? Can you help us understand what went into those ideas? So as part of the
Speaker 39
1:20:51
condition of this grant, you have to do a market rate study, and we have
Speaker 25
1:20:56
a contract with UAMS to do that.
Some of the feedback that we've definitely heard is that study only happens every three years or so. So the latest study that we were able to build this dollar amount off of was that market rate study. It was back in 2023. And in that study, it designated Benton and Washington as a part of that, because it looks at the high-cost communities, urban, rural, it does a bunch of those different factors and helps setting the rates. The federal grant says you can't go below 50% of the market study recommendation.
We recommended, and this is what the feds would often recommend, that dollar amount was based on a 75% rate of that market study. So, like, yeah, we looked at neighboring states. The threshold that could have been dropped to for our recommendation was 50%. This is 75%, and that's where that number came from. Okay, I guess I still don't understand
Representative Julie Mayberry
Unverified
1:21:51
the other two counties. And let me ask just one other thing, and I'll stop. I could talk
for a long time, and I know we have other presenters that want to talk, too.
As I mentioned, I love the tiered system because it does help the parent and understanding, you know, what the cost is for that care and the quality of the care, and we're improving and hopefully getting everybody to raise the quality of care, and I absolutely love that. Quality care is so very, very important. But I do have to ask, how often is that reassessed for each facility, and is that done, you know, if I qualify and I'm a level five, I've been certified level five quality of care,
when is that assessed again and how often and are we positive that a level five facility is in fact still a level five facility is that annual is it
Speaker 102
1:22:56
help it sounds like it happens every three years for that evaluation are we positive that that's
Representative Julie Mayberry
Unverified
1:23:03
done i I might have to check. Every three years for every single facility is the question.
Speaker 25
1:23:12
There may be a question you asked. I just don't know that
Representative Stetson Painter
Unverified
1:23:24
off the top of my head. Okay, thank you. Representative Painter. Thank you, Madam Chair. So listening to all this and
everything else in the short-term notice, I understand that the funding is going to stay the same until November 1st. Did you guys even think about maybe keeping the co-pays the same until November 1st just to kind of help families out? Because, I mean, if we're raising that and it starts tomorrow,
then, you know, that's for some people back in my district, that's a – it may not seem a whole lot to a lot of other people, but for them that's a lot to go ahead and figure that out for tomorrow. Right. So I
Speaker 20
1:23:56
think the short answer to that question is yes. Like, we're willing to have that conversation. What I'm telling you right now is we may not have the
Speaker 130
1:24:04
money if we keep everything in place to make these payments in October because the fund balance is there. So if the legislature is going to give us the money to make it happen, we can have that conversation. We had to make decisions based on the pot of money from this federal program.
I can't make it grow. I can't add other money to it. That's why we've made the decisions we've made. It's about $3 million a week, depending on the week. if if that fund balance that we have which is under 10 million dollars dries up and congress goes on vacation forever and there's no quarterly payment i mean that that's that's a lot that's a lot that's why those recommendations were to start october 1st we've got to reduce spending in this grant if
Speaker 25
1:24:41
we're going to sustain this program no i agree i was just trying to see if we could
Representative Stetson Painter
Unverified
1:24:49
you know if we're if we're shooting at
the november 1st then you know trying to keep it consistent for families and providers for everybody else also number two is i'm more concerned that yeah we're looking at a government shutdown and a possible cr but that cr that they're looking at is only good for november 21st of this year so what are we going to do to be prepared and not be back having this same meeting in 30 days which is why we said
Speaker 130
1:25:18
we need to implement this october first, right? I know it's not popular. We're spending six to eight million dollars more a
month than we receive. And if that budget doesn't happen or it gets a decline, we're right back here again. This is why this went out so quickly. So yeah, did it happen fast? Could it better be
Speaker 96
1:25:36
communicated? Could we involve more people? A thousand percent. Are we hitting the panic button that this pot of money is no longer going to exist by Thanksgiving if something doesn't happen? a thousand percent well i and i agree with
Representative Stetson Painter
Unverified
1:25:48
you on that but what i'm saying is as i guess of going back is what we've learned now from communicating with people and a short-term notice we also might
be behoove ourselves to be prepared that hey also too we could have the same conversation in 30 days yeah and i think so i just hope as the state that we're prepared and ready to go to have those
Speaker 138
1:26:08
communications ready to go because we'll be back right and so to that like
Speaker 25
1:26:13
when i met with some providers today I had that exact conversation because that's what they were asking is can we pause for at least 30 days on reimbursements figure out and I even said what if that means I got to call you at Christmas and say the pot of money is out they said we'd rather work towards that knowing that that could be
a possibility in the future because we would have time to plan for that this hitting us now so quickly didn't give us that time so yes I think a thousand percent that needs to be part of the conversation where we can't just be kicking this can down the road
Speaker 138
1:26:44
we need to look at this investment in early learning well I hope we all are
Representative Stetson Painter
Unverified
1:26:49
as a state and providers are prepared and get prepared for next month because we'll be back here having that discussion again if we're following the federal government thank you madam chair
Representative Denise Garner
Unverified
1:26:58
thank you as we're talking about the families again um that the the folks that receive these these allocations
isn't there still a federal mandate that they stay within seven percent of their income of the family income of the family
incomes how many of our folks our families is that going to affect
Speaker 25
1:27:18
I don't think it's going to affect any because one we wouldn't go above that the rate that was set at the recommendations based on the medium income of the ranges was around four percent but if a family has a lot of children it it depends like it some of these answers aren't as simple as they to give but we wouldn't go beyond that seven percent for any family because that's the limitation that
was recently enacted in a 2024 rule so we're
Representative Denise Garner
Unverified
1:27:40
can we're staying that yes seven percent thank you representative bach thank you ma'am
Representative DeAnn Vaught
Unverified
1:27:51
so i understand that some of the states from the sreb i want to apologize put in state dollars to try to help make it till they could find out about the cr that's that we're sitting here waiting on. Okay.
Speaker 135
1:28:05
I was confused when you said that. I was like, I don't understand that.
Representative DeAnn Vaught
Unverified
1:28:09
They had already put state dollars in there.
If this is never refunded, like if the feds never fund this, what happens then? Can you
Speaker 25
1:28:18
tell me what that? As far as, like, say they just zero out the whole program. Well, I guess $150 million, $60 million of voucher programs we could either pick up as a state or just wouldn't be made available. Okay, thank you, sir.
Representative Jim Wooten
Unverified
1:28:39
Representative Wooten. Thank you, Madam Chairman. Thank you, Mr. Secretary, for being here today. First of all, unfortunately, I appreciate the fact that you gave your background and your learning ability and that type of thing. The unfortunate thing about that is the fact it didn't take place in Arkansas with Arkansas people. My first question is how many parents have you talked with who benefit from this program?
Speaker 39
1:29:11
Like currently? I talk to families all the time. You haven't talked
Representative Jim Wooten
Unverified
1:29:20
with any of them. No, I said I talk to families all the time. Okay. Secondly, do
the providers have access to what the individual parents
Speaker 25
1:29:29
make? I don't know if they get access to what they make. What they would get is the allocation based on what they qualified for
Representative Jim Wooten
Unverified
1:29:37
for the sliding scale from the state. Okay, so why would we depend upon the providers to inform the
parents of a state decision which has been placed,
the whole burden has been placed upon the federal government? It's their fault. Let me ask you this. How many years have we gone without a budget at the U.S. Congress? I don't know the answer to
that question. About five years. How many times have we threatened to close down the government? How many times? I don't keep track of that. Four or five times? Yeah, at least. All right. Let me ask you this, then. How many times have you taken this type of action at
the last minute to reduce the pay
that the schools and providers receive and that the parents receive in order that the school can compete with the ABC mandate that we put out there. So we give
Speaker 130
1:30:37
federal allocations and redistribute them out to schools and community all the time, like every quarter. We just got an update to all of our Title I allocations this morning that we're going to send to districts. You got new
Representative Jim Wooten
Unverified
1:30:52
numbers. My next question is, if you're permitted, Madam Chairman,
my next question is, have you ever done this before? Have you ever told the providers or anyone that you have a contract with that we can't pay you? I feel like you're asking me loaded questions. Have I had to
Speaker 20
1:31:14
give people bad news all the time? Have I had to tell people their grants managers
Speaker 130
1:31:19
changed all the time? Did I have to tell people their terms and conditions of their contracts changed all the time? Okay. That's part of my job.
Representative Jim Wooten
Unverified
1:31:29
I know what your job is. I know very well what your job is, and you brought that up. Did you inform the governor of this action you were taking beforehand? I met
with the governor and her staff. You met with her and her staff, but yet you
Speaker 130
1:31:47
didn't have the courtesy to extend it to this body. I've met with key legislators. I did not meet with every single legislator. I
Representative Jim Wooten
Unverified
1:31:54
did not speak with a committee, but I've met with key legislators. Well, we never knew about it, so I would advise you in the future that the total body needs to be informed of an action that's going to affect the well-being of every child involved in early childhood care in this state.
My next question is this. Order. My next question is this. Why are you cutting $340,000 out of what the universities and colleges receive in the ABC program if it's state money? All we've heard is federal money. Right. So there
Speaker 19
1:32:29
has been no cuts to the ABC program. There has been some
Speaker 20
1:32:34
updates to the grants that some of the universities received in this program.
So those are grants
Representative Jim Wooten
Unverified
1:32:43
that are in this program. Are you cutting $340,000 out of
Speaker 19
1:32:50
the grants for the ABC? Of ABC? We've not
Representative Jim Wooten
Unverified
1:32:58
had any conversations around ABC. How about the $1,076,000
that's been cut out in total of preschool grants and fiscal CCDF and
ABC of $340,000, and the total is $1 million.
Speaker 19
1:33:17
Right. So I want to make sure we're clear. ABC is a state program. We have not made any conversations around that. Well, my
Representative Jim Wooten
Unverified
1:33:25
information is that $340,000 have been cut out of that. Is that correct? Not to my knowledge, no. There has
Speaker 130
1:33:31
been no cuts to ABC. Okay. All right. Madam Chair,
Representative Jim Wooten
Unverified
1:33:36
I may want back in the queue, but thank you. Thank you.
Representative Denise Garner
Unverified
1:33:41
We're going to hear a little bit more about the PDG grants in a little bit,
too. We'll talk more about the development.
Representative Ashley Hudson
Unverified
1:33:51
Representative Husson. Thank you, Madam Chair, and thank you, Mr. Secretary, for being here. So when you were looking at other states and trying to make determinations about what to do, did you endeavor to do an apples-to-apples comparison? For example, Texas has, what, 30 million people in
it. We've got three. You mentioned Tennessee. I know that they've got a significantly higher population. How did you decide where to make your comparisons to make a determination on what steps to take?
Speaker 25
1:34:26
So the recommendation that we're looking at for the reimbursement funding was based on the market rate study done by the University of Arkansas, UAMS, that's at 75% of what the threshold is for the average cost of care. The federal grant allows you to go down to 50%, but they typically recommend you to be around 75%, and that's where that number is. Does
Speaker 176
1:34:49
that take into account, and you may not know, I mean, since
Representative Ashley Hudson
Unverified
1:34:54
UAMS did this study, the fact that they have
a much lower minimum wage, for example, than we do here in Arkansas, and so their costs for the providers may be significantly lower than those for Arkansas providers.
Speaker 20
1:35:08
Yeah, my understanding is when they do that snapshot, they pull real-time data on what
Representative Ashley Hudson
Unverified
1:35:15
the cost of care is. And then I wanted to make sure I understood on the co-pays, you mentioned that you were planning to raise them, and I think this was for the 60% and above, about $10.43. Is that per day, per
Speaker 76
1:35:30
month, per year? It depends on the category, but it sounds like the one you're
Representative Ashley Hudson
Unverified
1:35:36
referencing is per day. Okay. So that's, I was an English major, so I tried to avoid math, but that's $208.60 per month for a family with two kids, and that's $2,503.20 per year. Does that sound right?
Roughly, without doing the math in front of me. You may have been an English major, too. I
don't know. I mean, was there any discussion about what kind of impact that was going to have on families? I mean, $2,500 is difficult for any family, and certainly in a time like this with inflation, to pull out. But these are people who are receiving, you know, assistance and paying their daycare costs. And I'm hearing from several families who are saying, we may have to pull our kids out and I may have to quit my job because it just doesn't make economic sense.
We don't have $2,500 a year. So was that part of any discussions when you all were figuring out
Speaker 19
1:36:29
what steps to take? Absolutely. And that's not something that we want
Speaker 25
1:36:32
to see happen. And when we look at, even when you read the spirit of the grant, it even states in there, and I wrote it down, that families are expected to contribute to the cost of care on a sliding scale basis. And the rules that have been updated in 24 said that that percentage can't go up to 7%. We didn't want to go up to 7% because we know that's a burden on the families.
those recommendations around four percent. Is that the right number? I don't know. That's why I said we have to start somewhere if we want to look at the long-term sustainability of this program. And on that
Representative Ashley Hudson
Unverified
1:37:08
seven percent, it's my understanding that the department at some point has applied for a waiver from the federal government to actually increase above the seven percent. Is that correct? I don't know if we have
Speaker 20
1:37:20
applied for that waiver. I know some states have, it I don't think we have. Okay. The last
Representative Ashley Hudson
Unverified
1:37:28
question I have and it's just it's it's maybe more of a
philosophical one and I'm concerned about it. I've spoken to several daycare
providers who are saying that in essence these cuts will mean that they can't afford to take anyone who has these vouchers because they can't these families will not be able to pay and their alternative is to have to raise rates for all of their families, whether they take these vouchers or not. And so in essence, the concern is that some of these providers who have been offering slots to these kids will have to start turning them down, and then those children will not be able to find care.
And so in essence, by saying that we're changing the program, we're essentially going to just gut it because these vouchers are going to become worthless. Do you share the concern that we are essentially changing the program in such a way that it is going to be difficult to even say that it helps families because the burden is still too great for the families to be able to seek quality daycare
Speaker 39
1:38:26
for their children. Yeah that's why I'm here and that's why I've been meeting
Speaker 25
1:38:31
with providers because early learning access high quality care is a top priority. Unfortunately there's some unintended consequences that we don't want
to see and when I meet with providers and they look at what implementing this new daily rate is or reimbursement rate is compared to what they've been giving is significant. They don't want to pass that cost on to the parent, but they also can absorb that cost, and it puts
Speaker 96
1:38:51
them in a conundrum. We are all on the same team here. What I'm telling you is if
Speaker 130
1:38:56
we don't do anything to this grant, this program won't exist. So if we want to continue funding at the way we are, we will roll up our sleeves, we will get with these providers, we will do whatever we can.
Speaker 35
1:39:09
I don't have the authority to make that decision or the budget
Senator Kim Hammer
Unverified
1:39:21
to make that happen. thank you senator hammer thank you madam chair thank you for letting uh non-committee members have an opportunity to ask questions um end of the day the sliding scale is going to go in effect at some point in
Speaker 25
1:39:31
the future regardless is that a fair statement i i think if this program is going to be sustained over time
Senator Kim Hammer
Unverified
1:39:36
we have to do that okay and we're talking about having to find at the current rate i just want
make sure my number is right. $80 million is what we would
Speaker 25
1:39:43
have to come up with. And that's a rough number. And I think, um, we had some members talk about if, if the grants come through at a higher rate, that might be less, but
Senator Kim Hammer
Unverified
1:39:53
we're, we're not planning on that. And right. And right. And I'm just trying to be real quick. So, and quick answers are good. So the, at right now we're operating on the assumption that the feds, uh, the federal government is going to cut the program funding and this is your your alarm that you have set off that it's coming now we we may find out
when they get the budget in place that hey everything's going to continue as it is and and things will work itself out but right now sitting here today we don't know that is that correct correct okay so also I want to ask you the question when it when it comes to the calculation of the cost there's a difference between there's a difference between what market rates say that people can pay but then the actual cost to operate given inflation what it costs to hire good health overhead insurance all that kind of stuff when you do a
comparison to other states are you looking at what people can pay are you actually looking at what it costs to to run a preschool facility right and that's why I want to be
Speaker 25
1:40:55
clear that that market rate study was done by a university in arkansas based on the cost of what it costs to produce now that studies wasn't hasn't been updated since 2023 so the cost of business is different today than what it was but the recommended rate that we had in here for reimbursement was based off that market study okay and not to be redundant
Senator Kim Hammer
Unverified
1:41:20
but the market rates are what people can pay but then there's the actual cost to run the facility And I know that may vary from facility to facility, depending on management styles, programming offer, all those kind
of things. But that rate study is based on actual cost. I don't know if I know the answer
Speaker 269
1:41:39
to that question. I'll have to get that for you. I'd like to get that if you don't mind.
Senator Kim Hammer
Unverified
1:41:44
And then what's not been discussed to date deep length is you've got 1,100 people on the waiting list.
Is that correct? Currently about that. By doing what you're talking about doing, will that allow any of the 1,100 to come off that waiting list? Or will that waiting list remain the same by implementing what you're proposing to do? So I think
Speaker 25
1:42:08
as we look at that waiting list for this implementation, we want to prioritize different groups on that waiting list. Because once you're already in the program, you're typically in there for a year until you come up for reauthorization.
If we have priority lists of the families and students that we want to serve, they might take precedence over that. But at this current rate, it
Senator Kim Hammer
Unverified
1:42:34
wouldn't reduce that waiting list. Could it potentially add to the waiting list? Because if centers are not taking individuals because either the families can't afford to pay the difference or the centers choose not to take vouchers anymore, could that waiting list potentially? Potentially, yeah.
Okay. Okay. So I think that needs to be in the discussion you're about to have over the next 30 days. Last question or close to the last question would be this. There are certain requirements that are placed on the facilities that if you take the money, then we expect to do this. Maybe that's curriculum or other things. Because there's going to be a reduction, those requirements that are being placed on the centers, are those going to be stopped are they still going to be continued to provide meet those meet those requirements with less funding to do it with well I don't
Speaker 25
1:43:26
think you want to do anything that lowers health safety and welfare of the students so you when you when you look at those licensing requirements those minimum expectations I don't see that going down but with those reimbursement rates for for higher tiers may have qualified may require different actions by the agency I think that needs
Speaker 269
1:43:44
to be part of the discussion so like take hippie program because this is going to touch the hippie program is that correct I as I said earlier I don't have that in front of me right now okay I know that my understanding that there's certain requirements
Senator Kim Hammer
Unverified
1:44:00
that are on those programs you know as far as what they're expected to deliver in the way of services material whatever support but if we're going to cut their funding we still expect them to deliver that that in itself I think is the conundrum how do we expect them to continue to do what we're asking them to do but the funding's not there for them to do it and that's going to have an adverse effect on I think early childhood development and I think over the next 30 days as you have those meetings something needs to be put into consideration last thing is this the walkway and this is being redundant I know but loud and clear the redundant
The position you're taking right now is that over the next 30 days to continue the rates, but everybody needs to understand if you take the money from the pot now, there'll be less money in the pot later, potentially, depending on what Congress does, and all we may do is slow down the train, but the train's going to come to a stop. Is that a fair assessment?
Speaker 25
1:44:53
Well, and I think part of that is a commitment, one, for them to get a kind of handle on this not hitting them so fast, and two, some of the providers said that they'd like to sit down and look at some options.
Maybe there's different proposals, different angles, different things to look at. This would be a chance to kind of roll up our sleeves together because at some point this current rate is not sustainable. And I ask for fund balances. Is there any
Senator Kim Hammer
Unverified
1:45:18
wiggle room in any of your fund balances to help plug this whole body? And do you have the authority to even move money between the fund balances? I don't think we
Speaker 25
1:45:26
can move a fund balance from a different grant to this grant. Oh, I think that needs
Senator Kim Hammer
Unverified
1:45:30
to be out there publicly just so the
public knows what your limitations are or not. Thank you. Thank you.
Representative Glenn Barnes
Unverified
1:45:38
Representative Barnes. Thank you, sir. Uh, one question you mentioned that you did meet with the governor. If you can, uh, elaborate on that. Was she open to maybe trying to, um, give some funds towards solving this issue? Yeah,
Speaker 25
1:45:57
I think in my conversations with the governor, she wants and make as little disruptions as we can to families and actually expand access and do whatever we can because she knows how important this space is
Speaker 44
1:46:09
and is willing to have those conversations. Great. Thank
Senator Fredrick J. Love
Unverified
1:46:20
you. Senator Lev. Thank you, Madam Chair. So, Mr. Oliva, I've got a couple
of things that I want to discuss. First things first
is that we're talking about child care. care of vouchers. And, you know, the conversation that we're having
in District 15, Senate District 15, is this, is that it seems like, and this is the appearance, it seems like that when
we were talking about vouchers for private schools, you
were on top of that. But now we talk about vouchers for the most vulnerable populations in our district and all of a sudden this change is going to have to come so talk to me walk me through that because I do want to ask you when you first I mean I know the question was asked when you first found out about this shortfall what the
conversation was and when did you know about it because I'm hearing a lot of different things about when you all first knew about the shortfall so that's what I want to ask you but but talk but first just address that issue of private school vouchers versus the vouchers for the most vulnerable and how we seem to be prepared for that and ask for 90 million dollars but we didn't seem to be prepared for this yeah
Speaker 20
1:47:45
so thank you for the question I just want to make sure on
the same page when you when you talk about
Speaker 25
1:47:52
private school vouchers I'm assuming that you're talking about the educational freedom accounts yes so I go back to that's a state program that's funded through state dollars these vouchers that we're talking about is one federal program we we don't control the money that goes in or out of that bucket it's a formula grant that we receive from the feds which is why we're having this conversation in a very open public forum today because if we don't increase that funding or add a state commitment,
it could greatly impact the quality of service those children receive. But
Senator Fredrick J. Love
Unverified
1:48:25
here's the thing, though, is that you all seem to be more on top of that
issue, and you seem to be more willing to come and ask us for the additional funding, additional appropriation, versus we were seven days, I guess, seven, three, four days out, and there was no there was no request made so just
Speaker 39
1:48:46
like this formula grant in every other formula we grant that we get from the feds whether
Speaker 25
1:48:52
it's title one title two title three
we pass on that formula grant to the districts i've never once come to the state and said title three funding's been lower can we offset what that allocation is never once it's a federal grant based on a formula that we pass on that we receive so just like
Speaker 123
1:49:09
this program and any other program we inform the recipients of those allocations hold on for a
Senator Fredrick J. Love
Unverified
1:49:16
second let's let's let's turn it down because you you're starting to yell at me and i'm not yelling at you but i'm just i want you to answer that so that we can go through it but you're starting you're
Speaker 135
1:49:30
starting and i don't mean to yell i do get passionate but you're trying to accuse me of not caring about these students no i'm not
Senator Fredrick J. Love
Unverified
1:49:37
accusing what hold on i didn't accuse you of anything what i said was the perception was this i didn't accuse you of anything now we've worked together before so so please don't say that i'm accusing you of anything but the perception is out there so i wanted you to give give you a chance to address the perception that's what i wanted you to do and that's why i
Speaker 44
1:49:58
go back to say when you talk about educational freedom accounts
Speaker 25
1:50:03
It's a state program. We talked about ABC accounts. It's a state program. You're saying the perception is I don't care about this federal voucher program, but that's not the case. This is a big deal to a lot of students and families. This is a space that I am 1,000% on investing every dollar that we can. The more money we can invest in getting kids ready for kindergarten, the better our state's going to be. So I don't I don't know where this perception is coming from, but it's not true.
And just like any other federal grant, like if those we get amendments to those grants every quarter, their formula grants. I've never once come to this legislator and said, oh, by the way, this formula grant last quarter changed. We need to do something about it. So have we faced this drastic
Senator Fredrick J. Love
Unverified
1:50:56
of a cut to a to a program? And other federal grants? Yes. I'd have to do some research,
Speaker 39
1:51:04
but, yeah, I mean, those grants fluctuate.
Senator Fredrick J. Love
Unverified
1:51:09
Okay. So the grants fluctuate, but, I mean, because we're talking about putting
some people out of business. And so that's what's going on here, that people are also, as you say, you're passionate about it. But people are also passionate about making sure that their kids stay in high-quality
child care centers. But lastly, I want to go to this. And this is going to go back to the promulgation of the rules
and the changes that we're having. So you said that this is a 100% federally funded program. So
when you begin to do your rule changes, does that mean that you don't have to, you bad pass the
Speaker 25
1:51:56
legislature? Let me clarify. So when you talk about the CCDF grant, There is a state match of about $10 million, so it's not 100% federal, but the majority
Senator Fredrick J. Love
Unverified
1:52:06
of it is a federal program. Okay, so then would not the change in
the rules, would that not necessitate you then coming to this body to actually—
Speaker 25
1:52:19
Right, and that's why this doesn't have state rules. This is a federal grant. It's
Senator Fredrick J. Love
Unverified
1:52:24
an appropriation grant. So then all the grants, I'm just trying to clarify, all the grants that are 100% federally funded, then that means when you
promulgate the rules, you don't need to bring it to the legislature. And that's what
Speaker 25
1:52:38
I'm saying. There's no rules to promulgate. Typically when we get an allocation, like a federal allocation, I'll use like Title I, it's a formula grant. Then it gets applied to a state formula and gets distributed to those school districts.
Speaker 291
1:52:53
This is similar. Okay. Madam Chair, I'll get back in the
Representative Denise Garner
Unverified
1:53:01
queue for a lot of the ones. Maybe it would be
helpful if the legislature decided that we wanted to spend part
of this $500,000 surplus that we have to boost early childhood. Is there a way to do that with those state funds?
that would not hurt our federal relationship with those grants.
Speaker 25
1:53:30
Right. So I think it depends on what program you want to invest in. So, like, if you wanted to invest in ABC, which is a state program, it's not going to have any impact on the federal grant. Right. If you wanted to invest state dollars to offset federal expenditures, when you get into maintenance of effort, you're basically setting a foundation that you're going to continue that appropriation so it doesn't look like you're trying to get in a supplant supplement situation.
Representative Denise Garner
Unverified
1:53:55
Can you talk just a little bit about the difference between supplanting? Yeah, so the federal
Speaker 20
1:54:02
code has some very clear guidelines that if you get a federal allocation, you can't take
Speaker 25
1:54:07
away state dollars because it looks like you're not providing a level of service that the state was already committed to. So if the state makes a commitment, we need to continue that commitment because if we got more federal dollars in the future and we took state dollars away, that could be considered supplanting because the state had made a commitment,
but now you're not seeking that commitment because the feds are giving a commitment. It's supposed to supplement
Representative Denise Garner
Unverified
1:54:36
or go above and beyond what the state commitment is. But we could support, potentially we could support
Speaker 29
1:54:44
until we hear more about the federal grants. For CCDF? for
Representative Denise Garner
Unverified
1:54:48
whatever support we need for the providers and the families. A similar program,
Speaker 25
1:54:56
maybe. I guess that goes back to, like, if you want to look at updating ABC or something
to meet different tiered qualities that are similar to this program, I think that might be a different conversation than just putting money into this bucket. I don't know if that makes sense. How can we do that in
Representative Denise Garner
Unverified
1:55:17
a way that doesn't hurt that relationship, that grant relationship? Yeah, I think you'd have to look
Speaker 25
1:55:24
more at a state program, and we could help research that for you. Great. And
Representative Denise Garner
Unverified
1:55:29
Senator Dismaine? Yeah, I'd be happy to
Senator Jonathan Dismang
Unverified
1:55:34
have a conversation about the budget issue.
So if you all want to just think about most of all of this has been into a peer meeting, right? And in a peer meeting, federal money flows through every single month for different programs, and they are not state programs, right? And we don't pass a new set of rules for those. Now, occasionally, if it's a
state program that requires a new individual to be hired or a new position, we may authorize a new position. But we don't set up brand-new programs in PEER just because we receive federal dollars. And so when they're saying that you don't come to us, and I understand there's a lot of people in the room that are going to shake their head no, and I've seen it.
But I'm telling you, we don't set up state rules for federal programs. We follow the guidelines, and they give us some latitude of what that looks like, and that discretion is less with the agency. But as far as us going in, I mean, it's 100% correct. If we want a state program, there is a path to do that. I don't know if you have enough latitude inside the ABC program to write new rules. I would doubt that you do, so it would probably take a state law first. And then from that state law, we can have an appropriation of state dollars, and then we'd follow through that process.
But, again, I've heard it from providers. I've heard it from some members. Just think about yourself sitting in a peer meeting, and we get a federal dollar. Do we follow up and have a rules meeting to approve how those dollars are spent? Never. Never. So that would be my clarifying point on that. I'd love to ask some questions when I get a chance. This is your chance. Awesome. All right, so because if we're going to speak in this vein of creating a new state program,
I want to make sure that I understand all the facts, the situation we're in, because, again, I can say, I can repeat verbatim what I've been told by Department of Education to provide, and the provider is pretty much going to say that they're lying, right? And so this has been a helpful conversation just to try to understand the different buckets that fund early childhood education for me, obviously someone that's not in that arena. What I would love to see is a chart of the buckets that go in to fund these programs for early childhood education.
I mean, because I will tell you, I am still finding it hard to believe, and I'm going to say something that I can't believe to be true. That if you make 85% of median household income in the state of Arkansas, you get a full paid voucher or some small copay. But if you make 86%, you get zero. I can't believe that to be true. So if you could give me some more information like that, because that just seems impossible to me. But I believe that may be the federal program or how we've allowed it to be implemented. So I would like to see that.
I would like to see the information on the surrounding states so we can get a better idea of what that looks like. Because I think what we're being asked to do is to create a new state program, right? And if we're going to do that, I can promise that I don't want to be beholden to whatever the federal guidelines were for their program. And I don't imagine you ultimately will want to be either. So just to say, well, let's put some more money into it, because also understand if we put more money into this program and it continues on, we're beholden to keep giving those additional dollars.
And if they change the parameters of that program, we are obligated to keep funding that program with our new parameters. So, again, if we're going to do something, it's going to have to be on the state side and it's going to have to be something that we diligently work through and have all the information. So I'm on a fact-finding mission at this point. And so if you don't mind, I think those timelines, the different buckets, when they're going to run out, all that goes into the higher education funding, what it looks like. And then we can have knowledgeable conversations about where we need to go with early childhood education.
because the other thing I'll tell the committee is I can promise you we're going to have this conversation again and we're going to have it on health care and we're going to have it you name the the entity and we're going to have it over and over and over whether it be because the feds decide that they want to go through the government shutdown and none of those dollars are flowing to us in the state again or because they decide they want to eliminate programs and you're going to be ask should we continue and if we do what should it look like and this it's going to be a difficult
time and we can talk about surpluses those disappear pretty quick i mean we're not talking about throwing nickels around we're talking about tens of millions of dollars so again if i if you don't mind you've heard a lot of questions hopefully the staff has taken that down putting that stuff on paper would be really really helpful thank you and if you don't mind send that staff Yeah, so we can share
Speaker 19
2:00:12
it with you, and then you can send everybody here. Great. Thank you
Representative Denise Garner
Unverified
2:00:16
very much. Okay, Representative Vought, you're back up. Thank you, Madam Chair.
Representative DeAnn Vaught
Unverified
2:00:24
Just a couple of questions. This was at DHS at one point, right? Yes, ma'am. Is this the program that was at DHS? One of the programs, yeah. Okay. And then when it came to y'all, who was over the program? Who is the boss of this program? It was Tanya Williams. okay and then was she aware of the shortfalls that were coming and when was she aware was it was y'all made aware when it came from DHS to you that there were shortfalls going to happen well I think that's
Speaker 39
2:00:53
always been the conversation when when we knew let's say back in February to
Speaker 25
2:00:59
start establishing a wait list we that was those conversations around we've got to slow down the spending because we don't have enough in a fund balance to keep sustaining at the rates that we were getting I don't think anybody projected a
Speaker 20
2:01:15
fourth quarter rate adjustment based on the line item so that that kind of hit
Representative DeAnn Vaught
Unverified
2:01:20
us by surprise and then I know like you're the main boss but who if Tonya's not over
Speaker 20
2:01:28
this anymore who is over it now so Ashlyn Abbey has been hired as an interim director okay
Speaker 106
2:01:34
thank you madam chair thank you representative Wooten
Representative Jim Wooten
Unverified
2:01:41
thank you madam chairman first of all I want
to make a statement and I hate to say I told you so but what Senator Desmaine said is exactly right this conversation is just beginning and it's not going to be just with education Mr. Secretary it's going to be with health. It's going to be with any federal grant that comes into the state of
Arkansas. The main reason is we owe, the federal government owes $37 trillion, $37 trillion. $1 trillion, $1 trillion a year in interest. And we cannot sustain that.
We cannot, as citizens, sustain that. And it's a difficult time. And this is
what I've warned my colleagues about
for at least the last four or five years, is Reckoning Day is coming, and it's here. And whether the federal government shuts down or doesn't shut down, we're still going to have a $37 trillion debt. And it's got
to be dealt with. Now, Mr. Secretary, have you looked at any
stopgap method from the surplus funds
or extra money or cash balances or other amounts of money that you have down there? Yeah, I think that's why when we heard
Speaker 19
2:03:19
from the providers, Even though October 1
Speaker 25
2:03:21
is the new fiscal year, if we could pause an implementation for about 30 days, so let's say November 1, we'd be using our fund balance in this grant to make sure that we can continue those payments. And that's what, $10 million?
Representative Jim Wooten
Unverified
2:03:40
A little less than that, yeah. Okay. And by the way, along with what Senator Hammer said, your staff assured us that they would have the fund balances and everything for today's meeting, and we don't
Representative Jim Wooten
Unverified
2:04:01
we have it available for you. Okay, how much is your budget for all of the secondary education in the state, the RSA number? Do
Speaker 130
2:04:10
you know? When you say secondary, are you talking about K-12?
Representative Jim Wooten
Unverified
2:04:14
I'm talking about K-12. $3 billion? I'll say a little
Representative Jim Wooten
Unverified
2:04:25
have is $2.49 billion. And it's the same next fiscal year. And so they were relying, we were relying on you to come up with the extra money for the formula or funding for every student in the state, whether it's Freedom Account or otherwise.
But if you could come up with that amount of money, why can't you come up with a stopgap effort here to help these parents and children and providers out at least for one year? I mean, we're
in a road to nowhere. We don't know what the federal
government's going to be. But if we're talking about $80 million for a year,
and I hate for us to start a new program. I just, you know, because we have to have a balanced budget in Arkansas, and we have no choice. The politicians, the governors, not just Sarah but the rest of them, try to make a big deal. We balance the budget. They don't have any choice. The Constitution says you can't spend more than you take in. So is there any thought been given to some stopgap method use of funds down there that you have access to to get us through this to help these parents?
So many of them, like you say, and I agree with you wholeheartedly, that the younger, and I spoke to 12 schools in the past two weeks, and every one of them I've made the point that reading and writing and arithmetic and reading a new book opens a new world. every day that they'll read a new book so have y'all given any thought to come it's it's less than
more two percent of your total yeah
Speaker 25
2:06:32
and i think that's um where it gets complicated where i guess the question working with the legislature is if we want to invest in offsetting this federal grant is that a commitment that we're going to make in perpetuity or if there's a question on how do we provide more access to early learning and state programs do we want to start a new program or expand an existing
Speaker 20
2:06:56
program those are the kinds of questions we need to answer well my question is
Representative Jim Wooten
Unverified
2:07:03
is there anything that we can do
for a stopgap method for for six months or a year to to give the providers more time and to give the parents time to adjust in the event that the federal government continues like they are down the road and if they shut down i don't think it's going to be for just a week or three or four days no
Speaker 25
2:07:29
and and that's where i kind of the struggle is why
we're saying we need to do some october 1st because the fund balance in this program it's not like we can shift other federal dollars into this program the fund balance in this program wouldn't be able to last six months at the current rate thank you
Representative Jim Wooten
Unverified
2:07:46
thank you mr secretary and thank you madam chairman and I and I will
Representative Denise Garner
Unverified
2:07:49
say representative Wooten and to the rest of us is the goal of this meeting is to talk about these things and see what we can
do so I don't think this is the end this is not the end of this discussion we're gonna be talking about this for a long time it's a national issue it's one
we've always subsidized every level of education except for the one that's most important to a child's life and so it's a it's a national conversation obviously if we can figure out a way to help make that stopgap with the budget constraints that we have then great and that's a conversation that we'll continue to have and you're willing to do that I sure you are yeah yeah so
thank you for that senator love thank
Senator Fredrick J. Love
Unverified
2:08:31
you mr. thank you madam chair so secretary leave it's it's
my understanding it was explained to me
that some of the federal dollars are are also used to supplement the ABC program during
summer months when the school is out? Is that correct or is that incorrect? I don't know if
Speaker 25
2:08:52
I know the answer to that. It may be those families can qualify to use this program
Speaker 35
2:08:57
in the summer because the ABC typically run through a school year. Do we
Speaker 316
2:09:03
know how much money, do we know how much
Senator Fredrick J. Love
Unverified
2:09:06
that would be to cover that 8 to 10 weeks?
We can get that for you. Okay, because my point in asking that was to also say that this is another place where the state is taking federal dollars in plugging in a state program. So if we were to actually plug in that additional money, then that would open up funding on the federal side, would that not? If you said to add the state dollars for
Senator Fredrick J. Love
Unverified
2:09:41
So, I mean, like some of the conversation that we're having is that the state probably needs to fulfill an
obligation in the first place. Because if we're not truly covering all the ABC students for the 12-month period and just for the nine-month period, then we've actually contributed to that shortfall. I mean, I understand that your department is going to actually try to make everything work. I'm not saying that, and I applaud you all for that.
But at the same time, we as a body, we need to understand that so that we can act appropriately. And so I do believe that this will be a conversation in the future. But I did want to try to get that point out there to see, like, you know, I heard that, but I didn't. No, I think I
Speaker 25
2:10:37
think to your point, if if you expand ABC and I think one of the challenges that a lot of private providers would say preclude them from participating is the reimbursement rates not as high and it requires a 40 percent match.
So if we're going to reimagine ABC to try to make it more competitive, I guess, with a federal grant,
Speaker 20
2:11:00
then that's a deeper conversation. Those are the conversations that we need
Senator Fredrick J. Love
Unverified
2:11:04
to have, so thank you for that. Thank you, Madam Chair. Thank you,
Representative Denise Garner
Unverified
2:11:08
and thank you all for your patience. We've got one more question, and then we'll go to our other speakers. Senator Disbane. Not a budget
Senator Jonathan Dismang
Unverified
2:11:16
question. My question is, because I've heard and I feel like I just need to finally ask, my understanding is some of these changes are driven by the LEARNS Act.
So we've made some statutory changes that are then creating to or helping lead to the shortfall and everything else. Can you walk me through what LEARNS Act changes were made that are having an impact
Speaker 25
2:11:44
on this problem, helping foster this problem? Right, so when you look at the federal grant, the appropriation, I'm going to round it, $136 million. There's required set-asides for professional development, for growth, for quality of about 12%.
When you look at some of the implications like for, like, learns when we were switching to the class observation tool or the development of the local leads, part of that 12% that were required to set aside for professional learning took on some of those expenses
Representative Denise Garner
Unverified
2:12:24
for learns implementation okay so just to make sure I
Senator Jonathan Dismang
Unverified
2:12:33
follow up that I'm sorry what you're behind the cap it's awful it's my favorite spot so but what you're saying is we were able to kind of duplicate some of the efforts of learns to be able to meet the 12% requirement right and then there's also some
Speaker 213
2:12:50
state commitment dollars to that as well it's not 100% on the burden but as far as learns driving up the cost we just shared cost was something that we
Senator Jonathan Dismang
Unverified
2:12:58
were already going to do that we could apply to the 12% correct you have to spend
Speaker 35
2:13:04
that 12% on professional learning okay thank you thank you and
Representative Denise Garner
Unverified
2:13:09
thank you for your your your explanation and for your willingness to help to to make something better of course anytime appreciate that thank you um
if you're looking at your agenda we've got a plane to catch at four o'clock so we're going to switch the agenda just a little bit and have dr kelly uh dr brandon kelly and um gina gina dickey are you going to come up and talk to us a little bit
Brendan Kelly
Unverified
2:13:54
would you please introduce yourselves for the record thank you madam chair my name is brendan kelly and i have
Speaker 329
2:14:03
the privilege of serving as the president in the Arkansas State University System. Gina Dickey,
Brendan Kelly
Unverified
2:14:10
consultant with Arkansas State University Childhood Services. And please, go right ahead. I appreciate it, Madam. For over 50 years, A-State Childhood Services has been serving all of Arkansas's counties. We were the first entity to provide training for child care programs in the state of Arkansas.
Our staff live throughout the state. We are working alongside child care educators and administrators to support the health, safety, education, and operational practices of the child care businesses that operate in this state. For us to address the impact of these cuts while I am in the business of developing people of all ages, I wanted to bring my colleague, Gina Dickey, because she is integrated throughout our childhood services entity.
She has the type of subject matter expertise for what is upstream in terms of training and creating quality and child care. The downstream impacts on families, children, et cetera. And then the impacts on our partners. And if you don't mind, Madam Chair, I'd like to hand it over to her to walk you through the impact in the field. Thank you for this opportunity
Speaker 330
2:15:28
both to this body as well as to the university to represent them.
That's feeling a little big. One thing that I wanted to say, first of all, was that it really is very exciting, this change, to recognize a B to 16 continuum. And I feel like in this seat today, I represent that higher ed component and that all of that really does start at birth. And I really appreciate how many of you have said that in your comments today. that it is clear your understanding about the quality of early education being equivalently important to the access of that education. And so where ASU Childhood Services really has a two-prong approach here to this issue is that we provide direct care.
We have 10 programs in the Delta. We have for many, many years, back when ABC money was the old money, as some of you know, the old money, new money. One of those programs is on campus at the ASU campus in Jonesboro. Eight of them are connected to a school in some way along the Delta, and the newest one is in Newport. That was actually made at a request from an Economic Development Commission. And so with those partnerships, and I think part of what is complicated in understanding
is how intricately involved, I think we got a good idea of that today, And how these funding sources work and how they're braided and blended across partnerships throughout the state to make quality early education happen. And the school readiness assistance is really been very key, if not a cornerstone to that. It started in this country in 1990, and Arkansas has been taking advantage of that opportunity ever since. So what was mentioned just previously was that the SRA funds are used for wraparound care is how we refer to it.
so before and after school care, for summer care. So the ABC programs that Arkansas State runs doesn't provide child care for a full day, full year for working parents. And so those two things are brought together so that we can offer those amenities for families because that's what they need, right? A school day is not covering their work day. But they also, one thing that really hasn't come up in this conversation, and for really good reasons, because the topic that has been at hand and discussed in the last couple hours is the most important topic, and that's getting direct services to children and families so that
they can be prepared for kindergarten and to go to work. But the cuts were also made to programs like ours. So we provide technical assistance and professional development all over the state in those 50 areas. And it's an important component to quality that really is in jeopardy as well. And I think there will be colleagues behind me who don't know about this because we haven't been talking about it. We've been talking about more what's important to them and what we need to do to support the continuation of care for children. But these kinds of professional development
opportunities are critically important to a population who our minimum licensing requirements is that you have to be 18 years of age, have a high school diploma or GED. That's what it takes to work in our programs across the state. And even the best programs that are represented behind me, there's probably a population within their teams that Gina Dickey would say they hire nice and train, because that's a way we can keep rates low for families, because we can't afford $50,000 like K-12. It's not in the budget, right? So we have educated people, and some of
them will be talking to you next, but for the most part, we hire nice and train, making these training entities absolutely imperative to maintaining quality and on any given day in the state it would be it is a modest estimate to say we're running about a 25 percent turnover so there's always new people to hire nice and train and that's in large part again because of the wages that we're able to offer so that parents can afford care we can't compete with
Chick-fil-A and Dillard's. So we hired nice and trained and we have cut that budget as well. So there are practitioners behind me, colleagues in other universities and other organizations who we found out last week that we will be taking large cuts to our budgets. Some of them started the very following day. Others will start next week as well. So those are after contracts were signed people are employed plans are made projects are underway
so they they are involved as well and i appreciate the university wanting to speak on our
Representative Denise Garner
Unverified
2:20:19
behalf in this issue thank you very much
Representative Jim Wooten
Unverified
2:20:25
members uh representative wooten Thank you. Mr. Dickey and President Kelly, when did y'all find
Speaker 335
2:20:33
out about this? Last Wednesday? I believe it was September 24th.
24th? Yes. Okay, September
Representative Jim Wooten
Unverified
2:20:42
24th. Let me ask you if these numbers are correct that I have gotten relative to your programs. On the PDG grant, it was for $916,000, but the effect is going to be, due to the quickness of it, is going to be between $367,000 and $467,000.
Is that right? I don't have the full budget in
Representative Jim Wooten
Unverified
2:21:18
sounds right. Okay. The next one is the CCDF award reduced from $1,077,000 to $808,000 or a $269,000
reduction. I don't want to confirm that number unless I had the full budget. Yeah, but
Representative Jim Wooten
Unverified
2:21:38
you for sure. But the total loss that I've been provided with, and I've heard
just one side, but that's enough.
I noticed, let me ask you this question. Did this come from the Department of Education or did it come from higher learning? You know, he's secretary of both, which I think is a mistake, which I've made clear before. But anyway, I noticed he conveniently left before
you got up here. And I'm not putting anything on you or him, but. No, I
Speaker 337
2:22:14
don't have the letters of notification in front of me,
but if you don't mind,
Representative Jim Wooten
Unverified
2:22:21
Representative, I'll get that to you. Did the notice come from the higher ed division or did it come from secondary? If you don't mind me getting that
clarification, I'll get it for you. Okay. I think that's important to know. Either way, he had control of it. And either way, it's going to impact childhood development educations in this state. It's going to affect every parent, every child, every provider, each and every university,
the University of Arkansas, ASU, and also UAMS and other colleges that participate in the program. Is that a correct assumption? It is, sir. Yes. So would you say that early childhood development is under attack, either at the federal level or at the state level? I wouldn't use that. I hate to put you on the spot.
Speaker 337
2:23:18
Yeah, I wouldn't use that language. I'll use the language of I'm so glad that you're so interested in early childhood development.
Representative Jim Wooten
Unverified
2:23:26
Thank you. Thank you, Madam Chairman. I think the point's been made. Thank you.
Representative Julie Mayberry
Unverified
2:23:34
Thank you. Representative Mayberry. Thank you. Thank you for being here, and I will say one of the fantastic things about all this is that we're at the Capitol talking about early childhood education far more than we have in many, many, many, many, many years, and I'm hoping that, you know, sometimes some bad things happen, but good things can come out of it, and so I'm really excited about the conversation that we have.
I had a very sweet friend of mine say something to me, I don't know, less than a year ago. And I want to throw this out there for food for thought, because we did pass the access plan this past term. We passed something, you know, the Learns Act, the term before that. Maybe in this next legislative session, we're really concentrating on a big package dealing with early childhood education. And that's what I hope comes out of this in the long term.
But I'm throwing this out there for food for thought. This person came to me and she said, Julie, when I go to get my hair done, that person has a license. When I go to get my fingernails done, that person has a license. But when I take my child to an early childhood center for child care, that person doesn't have a license. And do we have our priorities a little out of whack?
And so I actually began looking into it some, wanted to bring it up this past session. It just really wasn't good timing, but maybe this is something that higher ed can get involved in because to my understanding that there's actually some funding there to help our child care workers achieve a certain level of training that maybe could be included to be required. Now, with that, there comes a cost because if the person has to have training
and meet a certain certification, then there's going to be a higher cost. But just looking for some feedback on that and what we can do maybe in the future conversations about this to really make sure that those who are providing the care to our most vulnerable, we're talking brand-new babies who cannot speak for themselves, that there's some level of licensing involved in that. Gene is the subject matter expert in that.
Speaker 337
2:26:10
I mean, I would say broadly the more
Brendan Kelly
Unverified
2:26:14
educated and well-trained any individual is in whatever endeavor they're entering into, we are going to get better outcomes from that. We know that at every level of education, and I'll just use the adult example. We train the professoriate, myself included, with PhDs, but we don't teach them how to teach necessarily. That's something we do after they become a professor. We don't get a chance to do that at other levels of education, so I think that's critical.
Speaker 87
2:26:47
Representative Mayberry, yes. We think knowledge, skills, and ability are absolutely key because the most
Speaker 330
2:26:52
important component of quality is the person that's in the room providing direct care for children. Arkansas has invested in the TEACH scholarship program. It, too, was cut with these cuts. And, in fact, the speaker that's coming behind us has benefited and taken the opportunity from that and has made that available to her staff. So I'd ask them to make a reference to that opportunity and what that's meant to them.
um absolutely and we're also looking at we have entered into a partnership arkansas early childhood association that we are providing um a department of labor approved apprenticeship program of which arkansas state university provides mentors for those apprentices on site to so so that you've got that hands-on engaged learning in real time because that's what real kids need is real-time information and yeah that's also those things are ideal we also in in respect
to the colleagues behind me that don't have those formal pieces of paper that say they know stuff we've been looking really hard at competency-based opportunities for higher education based on what you already know and acquired and learn through real-life experience as an opportunity for stackable credentials. Thank you.
Senator Kim Hammer
Unverified
2:28:26
Senator Hammer. Thank You Madam Chair and I just want to make this statement then you correct me if
I'm wrong because I came into this meeting thinking we're just gonna be talking about vouchers because that's what you know we've been hearing most about but what i'm hearing now is there are a lot of components that are going into what is classified as early childhood development uh either in direct services or wraparound services i'll call which is what i would refer to what you're doing it's more of a wraparound
services for the parents but but it's coming out of the early childhood pot of money am i correct in that
Speaker 330
2:29:05
yes sir the 12 quality set aside that the secretary referenced that's where the contracts come from for think people like us at a state childhood services and others and so those have been equilaterally a cut across the board okay
Senator Kim Hammer
Unverified
2:29:18
and that kind of goes to senator dismayne's point a while ago about i think
really what will help in the conversation is all the various entities that are dependent upon that pot of money and how those are utilized for the overall goal
and purpose of developing early childhood development. I guess the question I have, and maybe you threw that number out a minute ago, but what's the financial impact to your programs based on what's being proposed? I think the total number
Speaker 352
2:29:48
was $2 million, $2,080,000. Okay. And maybe you don't want to talk about this
Senator Kim Hammer
Unverified
2:29:54
publicly, but how are you as an institution prepared to absorb that, or is that part of the discussion? And now that you heard the conversation in the room today about maybe a 30-day reprieve,
is that giving you time to go back to talk to your board and to your
Brendan Kelly
Unverified
2:30:13
folks and say, we need to get ready for this? That's right. Joanne Nellie, who's our longtime director of A-State Childhood Services, is working through that. Obviously, this is new information. So operationalizing those cuts is still in process. But, you know, obviously it is a reduction in those services. Okay.
Senator Kim Hammer
Unverified
2:30:30
and maybe this isn't the question you need to answer, but I'm not sure anybody from the department's left in the room to answer this question.
But, you know, when it got to, when this program was all set up years ago, and I'm not sure, when did your component get added to the program from the original date when it started, or has it always been part of what was given in the way of federal funding, or have you just been added on as years
Speaker 330
2:31:00
have gone by? We've been there since the beginning, and as the funds came more and more funds came available to the state, then Childhood Services grew in their capacity.
Senator Kim Hammer
Unverified
2:31:11
Right. So this has been something that's been evolving over the years. More money has been coming down from the federal government to the state to distribute out, and your growth has not, has your growth been at the rate of the funds that have been given you to grow your programs or how many of your programs have been grown not being dependent upon those federal
Speaker 330
2:31:38
dollars? Almost 100% of the budget is either reliant upon the quality set
aside by the federal government or a portion of the Arkansas Better Chance program that has been set aside for quality improvement. Okay, good. Last
Senator Kim Hammer
Unverified
2:31:52
thing I'll say, Madam Chair, thanks for the attitude is i'm just what i'm trying to process in my mind is over the years how much
and how many have become dependent upon this federal funding and now that there seems to be a correction that is taking place um now now we have to take the hard look at what's going to survive what's not
going to survive and could possibly you would like to hear this but could possibly some of the money be redirected from what you are doing and moved over to another area that may be more boots on the ground like the vouchers to the parents that are in the actual preschool facilities or those federal funds restricted to where what you're getting can only be used for what you're getting so
Speaker 330
2:32:42
the child care development block grant requires a 12 quality set aside so that's the only
requirement i don't know if we're met that threshold or we go beyond that threshold um but that would give this that but there's some flexibility even within what's defined quality right so the the latitude that states have on how they administer their uh ccdf funding is very broad so there is some flexibility in that and i do think well you didn't have i do think open Looking at the cuts and the timing of them, my presumption, Gina Dickey's, is that some money has been moved from the contracts to vouchers, right?
Which is why we don't necessarily disagree with that, but it was not part of a conversation and we were not involved. And that's part of
Senator Kim Hammer
Unverified
2:33:34
the problem, I think, is now everybody's getting involved to where you have a platform to be included in those conversations. Thank you. Representative Wooten.
Representative Jim Wooten
Unverified
2:33:57
Thank you, Madam Chairman. I want to take but just a
second. The information I had is from another university which I won't identify, but they just fired their head coach. So this is for Senator Disman, if he's still in the room. We're up to about $83 million now rather than $80 million. So we've got to take a long, hard look at childhood education in this state for the parents, the children, and the providers like ASU and the other university and UAMS.
Representative Denise Garner
Unverified
2:34:36
Thank you. Seeing no more questions, I think we can bring our next testifiers up. Thank you
guys so much for being here. So next we'll hear from Christine Eichler and Dr. Stacey Pipkins.
Would you all please introduce yourselves for the record? Thank you. Microphone.
Speaker 364
2:35:41
Hi, my name is Christine Eichler, and I operate a family child care home in Romance, Arkansas. My name is Stacy Pipkins, and I have
Stacy Pipkins
Unverified
2:35:51
four programs in the central Arkansas area. Dr. Pipkins, would you pull your mic up just a
Representative Denise Garner
Unverified
2:35:57
little bit so we can hear you? Thank you. You want me to repeat it?
Stacy Pipkins
Unverified
2:36:06
Yeah, y'all go right ahead. I have four programs in the central Arkansas area. Great.
Representative Denise Garner
Unverified
2:36:11
And you guys know which order you're going into. Go right ahead. I'll go first. Thank you. Good
Speaker 370
2:36:21
afternoon. It's almost evening, but good afternoon. And thank you for
Speaker 364
2:36:26
allowing me to speak today. Again, my name is Christy Neichler, and I have operated my in-home family child care program in rural Arkansas for almost 40 years. I have cared for generations of children, and now I care for their children also.
I hold a national accreditation through the National Association of Family Child Care. I maintain a better beginning, STAR Level 6, and I currently serve as a president of the Arkansas Family Child Care Association. I'm here today not only as a small business owner and educator, but as the voice of hundreds of family child care providers and educators across our state who are deeply affected by the recent changes to our early childhood subsidy system. On September 19th, we were informed of across-the-board rate reductions and the introduction of a sliding-scale copay for families, with less than two weeks' notice.
Under the new system, even families living at or just above the poverty line will face co-pays estimated at $100 or more per week per child. For households with more than one child, this cost quickly becomes unsustainable. These sudden cuts, some 30 to 40 percent, are forcing providers to make drastic decisions. Laying off helpers or eliminating staff.
Cutting back on menu quality and snacks that aren't reimbursed. Reducing infant care slots, which are already scarce in Arkansas. Considering closing doors entirely or refusing to serve subsidy families because they simply cannot afford to take the cut. And it's not only the direct child care rates being cut. Funding for the support system, the ladies that just spoke, the gentleman and lady that just spoke.
That gives us free trainings, coaching, and mentorship. It also is being reduced. These supports are what build and maintain high-quality care. They give educators the stamina, the knowledge, and the encouragement to stay in this field. Without them, we risk losing not just capacity, but quality. Arkansas rightly dedicates about half of its state budget to education. This reflects our commitment to children's success. But birth through age five lays the foundation.
For everything that comes after, including those third-grade reading scores, we're so focused on. Research shows that 90% of brain development happens in the first five years of life. Early childhood educators are brain builders. When funding is cut from this stage, we risk undermining everything the K-12 system is working to achieve. Without strong social-emotional pre-reading and pre-writing skills developed early, children begin school at a disadvantage.
Playing catch-up from day one. Family child care providers are also a lifeline of resources for families, Helping families navigate medical and developmental concerns. Coaching parents through potty training and behavior challenges. Supporting children's social-emotional growth. Connecting families with community services. We are not simply here to complain. We are here to collaborate. On behalf of the family child care providers across Arkansas, I respectfully ask, pause the cuts.
Give families and providers time to adjust. Re-evaluate the system with provider input to ensure sustainability. Increase transparency and invite stakeholders to the table. Protect infant care, rural care, and the training, coaching, support systems that sustain quality early learning. These funding changes are not abstract numbers on a spreadsheet. They are affecting real people, real businesses, and real children across Arkansas.
Mandy in Harrison runs a family child care. She's a level six, better beginnings, nationally accredited home. Out of her eight children, six are supported by the school readiness assistance program. She also provides infant care, which is rare in Boone County. There are only 40 infant spots in the entire county. If funding is reduced, some of those infant care spots could disappear, creating even larger strain on families needing care for their youngest children. Monika in Faulkner County cares for children where half are subsidized through the school
readiness program. She's unsure how she can balance her budget under the new rates and is worried she may have to cut back on services. Gwen, also in Faulkner County, recently used a grant to expand her family child care home to 16 children, opening more infant and toddler spots, but she has already had to let a full-time worker go, a worker whose own children were enrolled in her program. Now Gwen is losing both that workers' support and the income from the children who left, threatening the sustainability of her expanded program.
Ms. C. in Pine Bluff runs a nationally accredited program with a level 6 status. Under the new changes, she stands to lose $3,000 a month. She says it will be a challenge for parents to pay the new co-pays and a direct loss of her wages. When she had the SRA funding for her level 6 status support, she was able to help families in tangible ways, like buying diapers for a single mother of twins. This demonstrates what early child care educators do.
When we have the funds we've earned, then we choose to use them to put back into our program and into our families and into our children. These are not isolated cases. Across the state, providers are making deep budget cuts, scaling back programs, or in some cases, closing their doors. The ripple effect of these decisions will touch children, families, and entire communities. In conclusion, I entered this profession so I could stay home with my own children.
I stayed in this profession to make a difference, because every child deserves to have high quality care. Family child care homes like mine are small businesses, but together we form the backbone of early care in our state. Thank you for your time, for listening to the concerns of providers and families, and for your commitment to doing what's right for Arkansas's youngest learners. We stand ready to work with you to ensure you that every child from birth to five has
Stacy Pipkins
Unverified
2:43:26
strong foundation they deserve. Thank you. Thank you, Dr. I've been in the early childhood education field for over 30 years. I hold a doctorate in education with an emphasis in organizational leadership. I've served on the board for the Central Arkansas affiliate of the Arkansas Early Childhood Association for several years and am now the president. I've contributed to multiple advisory boards i feel like i know this industry i've dedicated my life to nurturing children empowering
teachers and supporting families through community partnerships i own four child care centers in the central arkansas area we serve between 300 and 400 families each year with about 120 to 140 of those that receive the sra subsidies at a time i'm here today because the coming change to the sra reimbursement system threatens the foundation of early childhood education in our state. This shift from the current tiered reimbursement model to a base level market rate model will cut
over $6,000 per week from my program's funding. That's not a minor adjustment. It is a financial cliff and we were given seven business days for that. Under the new model, many programs like mine will be forced to close their doors. The market model, which is what they were saying the new system is going to be based on, it assumes that what providers charge reflects what it costs to deliver care, but that's not true.
Many of us keep our rates low to remain accessible to families. Our budgets are built on a cost model, what it actually takes to provide safe, enriching, high-quality care. A market rate model ignores that reality. The cost model accounts for the real expenses of running a child care program. Wages, benefits, training, curriculum, safety standards, materials. It reflects what it takes to meet licensing requirements, achieve quality ratings, and support child development.
The market model, on the other hand, is based on what families in our areas can actually afford or what providers can charge in a competitive environment. This is often below the true cost of care. If we base reimbursements on market rates, we're essentially asking programs like mine and these ladies behind me to operate at a loss. That's not sustainable, and it's not fair to the educators, the children, or the families that we serve.
The current tiered reimbursement system acknowledges the importance of quality. The higher the quality level a program achieves, the higher the reimbursement rate. This system allows us to invest in better materials, offer competitive wages and benefits, and retain qualified, passionate educators. It's a model that works for children, for families, and for providers. And I believe that you asked the question about your hair lady. I want to mention that under these new reimbursement rates,
I was a Better Beginnings provider before these rates, the reimbursement rates came in. And we struggled just to make ends meet. I lived week by week under that system. But when the quality system came into place, it pushed me to try harder to get quality levels to achieve that. And now, because of the tiered system that we're under, I am able to afford higher quality teachers in our programs. I have many staff members that hold master's degrees, bachelor's degrees, associate degrees.
I think we figured out we have six right now. Gina had referenced that earlier. The TEACH program is a scholarship program that allows women, people that are working in early childhood settings, to go to college on this scholarship. It requires that providers like myself pay 10% of that. And these higher reimbursement rates is what allows me to be able to do that. So I can pay higher quality staff members because of that.
In 2023, Arkansas was ranked number one in the nation for early childhood education. That ranking was based on access and quality, which are the two things that they say they're doing all of this for, is to increase access and quality. The tiered reimbursement system helped us to get there. Why would we dismantle the very system that made us a national leader? These funding cuts don't just affect the children whose families receive the subsidies. They affect every child in our program.
When we lose funding, we lose the ability to pay these competitive wages to have those qualified teachers that you were talking about. It means losing them. We lose the ability to invest in high-quality materials and curriculum and enrichment activities. We lose the ability to maintain smaller class sizes and individualized attention. That means lower outcomes for children. Middle-class families who may not qualify for subsidies, they still benefit from the quality enhancement that those subsidies make possible.
When we're funded adequately, we can offer better care to every child in our program. But when funding is cut, quality drops across the board. That's not just a subsidy issue. It is a community issue. Some may ask, what is the long-term cost of keeping the tiered model? The answer is simple. It's an investment, not a burden. The cost of maintaining the tiered model is a commitment to child development, to workforce stability and community health. It supports better school readiness, stronger family outcomes,
and more resilient early education workforce. The cost of eliminating it? Program closures, and we're already seeing that. Programs all across the state. We're hearing from providers that are already planning to close their doors when these cuts go into effect. This affects everyone, not just the subsidy families. This affects every child that's enrolled in these programs. This is going to lead to educator turnover. You know, my dissertation was actually on staff retention in the childhood industry,
and I focused on Arkansas because of the gains that Arkansas has made in early childhood education. But these cuts are going to, they're going to take all of that away. It's going to result in a reduced access to care as provider after provider is forced to close their doors, which is going to lead to lower education outcomes. You know, these children that are having to pull their kids, families pulling their kids because they can't afford it anymore, they're going to put them in illegal daycares, illegal in-home daycares, private babysitters and things
where they're not getting that high-quality education that they receive in these programs. Ultimately, this is going to be a reversal of the progress that made Arkansas a national leader. I'm asking you today to reconsider the shift. Maintain the tiered reimbursement system. This is not just about funding. It's about the future of early childhood education in Arkansas. It's about the children who deserve safe, nurturing environments and the early educators with the knowledge, skills, and abilities to prepare them for secession and kindergarten and in life it's about the families low income
middle income working class it doesn't matter all of them rely on us every single day and these cuts are going to impact what we are able to provide for them you know we talked a lot about putting a pause on this but i'm asking moving forward that we we stay with this cost model Because the market rate is, it's not, we can't survive under a market rate.
The cost model system that we're currently under, it's based on what it actually costs to provide high quality care. And when that funding is gone, I cannot maintain it. My teachers, my staff members that hold master's degrees, I will have to let them go after this. I will not be able to afford the teachers that I have. That's going to cause the quality of my programs to plummet. So I'm asking you, please, to consider early childhood education. We've put so much focus on young children.
We put focus on families in our communities, as we should. But it's got to start with providers, because quality really starts with us. It starts in our programs. We're the ones providing the service that provides stability to our workforce. It was important during COVID, and it should still be important now. Thank you. We've got
Representative Denise Garner
Unverified
2:52:35
several questions. Thank you guys for sticking with us. Representative McKenzie.
Representative Brit McKenzie
Unverified
2:52:42
Thank you, Madam Chair. I have a few questions. Dr. Aguilar, are you on the left? Yes.
Okay, a few questions. So you did a great job of illuminating your percentage, the size of your facility, the size of SRA students. What is your private pay tuition for families
Stacy Pipkins
Unverified
2:53:00
not on SRA? Well, that goes back to market rate and what's affordable because my programs are spaced out over three different cities. It varies, but on average, I would say that our infants, probably those spots are around $195 a week down to $175 for our pre-K children.
And it's a little different depending on which city the program is in because we base those rates
Representative Brit McKenzie
Unverified
2:53:23
off of market. Correct. So that's roughly $800 to $650 a month. Yes, sir. What amount of copay, on average, and this is on average, you
have four facilities across a big white swath of area, amount of copay do you
Stacy Pipkins
Unverified
2:53:37
collect? Well, and this is not the case, I know, for a lot of people, but because the tiered reimbursement rates are higher than what my private tuition rates are we don't collect copays we eat that cost as a loss because
we're already getting above what i would charge them as a private pay facility so we don't charge our families in
Representative Brit McKenzie
Unverified
2:54:00
our program for the copays okay uh is there any other subsidies any other government programs any other philanthropy grants that you receive for your core
Stacy Pipkins
Unverified
2:54:08
facilities um the only thing that we get we're on the um the child nutrition program so we receive reimbursement for our
Speaker 375
2:54:14
food costs okay some of our food costs uh miss
Representative Brit McKenzie
Unverified
2:54:21
hess so in your facility uh how many students do you have
Speaker 384
2:54:28
i'm licensed for 10 but right now i have four that's great
Representative Brit McKenzie
Unverified
2:54:33
and i was really interested to hear that you have an at-home facility, because I think, I don't know if I'm not supposed to say this, but I think that the state has done a hard job of making at-home facilities feasible, and that I do believe that that is a way that we're going to deal with the crisis, which I don't think it's necessarily a crisis, and it's illuminating more of the problem. It's not a crisis. It's a market failure. Child care is a market failure.
We have 218,000 students in the state of Arkansas that qualify under five years and under that would require some form of child care from 1 to 1.1% or 1 to 1.1 FTEs of a family member that needed to do full-time work. This program represents 22,000 people, roughly, when we start talking about attrition and 25% rollover. Private pay. Are all four of your students currently on SRP? All of mine are
private pay, yes. Okay. Do you receive any other philanthropy, subsidy, government assistance?
Speaker 364
2:55:30
The only other thing that I do receive is CSEFP, which is our food reimbursement, which provides an amount for food. How many other facilities are there like yours
Representative Brit McKenzie
Unverified
2:55:39
in and around within like 20 miles of romance? I'm going to say three. Okay. And then
large-scale child care enrichment facilities? We are currently, I believe we are
Speaker 364
2:55:54
just under 200 in the state. Okay. All right. Thank you very much.
Representative DeAnn Vaught
Unverified
2:56:05
Representative Vought. Thank you, Madam Chair. Thank you all for being here. You both did an
excellent job. I want to thank everybody out there that's here also that doesn't get to speak today. I do want to correct a couple of things, though, and I'm on your side, but I want to correct you. We're not cutting anything, and I want all of you all to hear that. your stories that you read just a second ago, those all need to be sent to the Congress or Congress delegation. Every one of y'all out there should be emailing our Congress delegation
because we're not making a cut. But if somebody's just watching online and they only catch part of that, they think that we're the ones that are making the cut here in Arkansas. But I want to make it very clear, we're not doing this. We can't keep a tier that's not actually our tier. It's the federal government's tier. So I want to encourage y'all. Again, you did an excellent job. I think everyone sitting out there in that audience should let their voice be heard to our congressmen,
senators, and our representatives up there. Because they're the ones, ultimately, who was in charge of trying to get this push through for Arkansas. I value what you do. I believe y'all do a good job at what you do, but I just want to make it very clear to anyone who's watching online that it's not us making these cuts, but thank y'all for being here.
Speaker 389
2:57:42
No worries. No worries. Representative Mayberry. Thank
Representative Julie Mayberry
Unverified
2:57:48
you, Madam Chair. Thank you for your statements. I just, I want to ask you a few things. One, I
think many people are hearing, oh, well, this is going to affect parents, those with young children, and really only those on vouchers who are using vouchers. But this is a much larger issue. Yes. Because there are some facilities that also use vouchers and the private pay at the same time.
And if they're not receiving that same amount of money, that daycare, I mean, you've said some of them might close up. But even
bigger than that, there's probably many who say, I don't have children. You know, this is not an issue to me, but they own a business. Or they're working here at the Capitol or wherever, and suddenly now they have an employee that they've been relying on coming to work, and now that employee can't come to work because they don't have child care.
Can you kind of share a little bit about really the bigger picture of how this affects the economy as a whole? I mean, during COVID, when
everything was shutting down, child care workers were essential employees. Right. Okay. Do you mind sharing a few
Stacy Pipkins
Unverified
2:59:12
thoughts? Well, as I stated, with me having that higher reimbursement rate, it allows me to keep my private pay tuition down.
But it's going to affect the only way that I'm going to be able to survive is letting go my high-quality teachers and raising tuition rates across the board for everyone. And so that hurts everybody because even the families that don't receive subsidies, it's going to stretch their budgets to a point that they're not going to be able to afford child care. And when they can't afford child care, they're going to have to pull their kids. But programs are going to have to close.
They're not going to be able to make it because our budgets are already established. So my budget, 70% to 90% of budgets usually fall back on wages for staffing. And my budget's already set based on these reimbursement rates. So what I'm having to do in seven days is readjust a budget where I've lost 40% of my funding. And I don't know how I'm going to do that without hurting people that I care about.
Speaker 392
3:00:26
I was just going to say this is really going to affect spots.
Speaker 364
3:00:32
We haven't talked a lot about slots where facilities do not have open spaces for infant and toddler. There's none out there. So that is a difficulty. They talked about opening up spots for more families to be on SRA. Where are they going? There's not anything open. And if we're having facilities closed because of this, where are they going?
Representative Julie Mayberry
Unverified
3:01:00
And you mentioned infant and toddler, and one thing that I've kind of learned through the years
is just how much more expensive it is for any child care facility to even offer infant and child care. I mean, infant care, because the cost is just that much more. Do you mind? The cost
Speaker 364
3:01:19
If you have infants, then your ratio, I'm licensed for 10, but that depends on the ages of the children. I never kept 10 kids because I didn't have 10 kids over the age of three. So I always have kept families, usually an infant and a toddler and a preschooler.
So I kept all the children of that family. And so that's what reduces your rate of children. So that's why usually infant care costs more, and that's why there are a lot of facilities that don't take infants because it is. It's a much difficult, yeah, babies are tough.
Speaker 370
3:01:51
I mean, they're the best, but they're tough. You don't really make
Senator Breanne Davis
Unverified
3:01:57
any income off of infant spots, very little, because of that ratio. When you can
Stacy Pipkins
Unverified
3:02:02
only have five in a classroom to one teacher versus a pre-K classroom where you can have 12 to one teacher,
it's a lot harder to offer infant care.
Speaker 364
3:02:13
And again, I'm family home and she's center, so there is some differences in our ratios. So that is, I'm by myself. I don't have employees, so you don't
Representative Julie Mayberry
Unverified
3:02:26
want me having a lot of infants. I did hear one critic just say, you know, well, they must have an awful business model
if this much of a cut is going to make them go out of business. And I sit there and say, you don't know anything about early childhood education then, because really many, to my understanding, many are not making
lots of money on any of this.
They're just barely getting by and really see themselves more as providing services that are there. Do you agree? Oh,
Speaker 384
3:02:57
definitely agree. I mean, I believe it's
Speaker 364
3:03:02
definitely a calling, but I don't think it's something that we all want to do for free. I mean, we do this because we love it. We stay in it because we love it. We have a relationship with these children. We have a relationship with these families. We're part of our community. And, I mean, I go to games, to basketball games, football games.
I go to baseball games. And, you know, kids that I've had from years back will come and want a picture. So, I mean, it's relationships. And it is something that it grows. And it's deeper, but we can't do it for free. And I kind of feel like that's where we're expected to go is we'll eat those costs or we'll do it out of the goodness of our hearts. And I wish we could. That's not sustainable.
Representative Cameron Cooper
Unverified
3:03:57
Representative Cooper. Christine, thank you for being here. Really appreciate your testimony. And thank you for providing early childhood education services in our rural area of western Wack County. Thank you. Greatly appreciate that. Could you share with the committee, give us some insight on the differences and the difficulties of providing care in a rural area? I mean, Heber Springs, Searcy, those are the nearest towns to us quite a distance away. You're providing a great service for families that work in the small towns like Rosebud and Mount Vernon.
So could you give us a little insight on the differences and the challenges and how these changes in funding would
Speaker 364
3:04:40
make that even more difficult for you? Sure. Again, this does not, I do not have any SR children right now, SRA children, I'm sorry, but yes, it is difficult. There are a few other providers in my area, but again, they're in the same situation as me. There's only a certain amount of spots that they can open. Difficulty is if we close, we don't have anything.
Our school has an ABC program within the school. We had a head start, and it has not been open in some time now. So as far as Rosebud kids, there's me and another provider in Rosebud, and then there's one in the Mount Vernon-Rosebud area. And that's really about it. Now, we are licensed, and so now I don't know about other people that provide care, um, that are, that are, you know, uh, friends and family are unregulated. I
don't know the numbers of that, but the difficulty is, uh, we work long hours. Uh, we work when our parents need us. Sometimes that means opening your door at four 30 in the morning, if they work in a factory in Searcy and need to be there. Um, that means some evening care if, if necessary, that means opening if a family needs you um in in certain situations sometimes their families live out of town and sometimes you're the closest one there so um but there's there's just there's difficulties
in in many ways as far as um sometimes it's difficulty not having a support system so having a support staff or having a support system like a state and curricula concepts and different people that give us support and mentoring we rely on that we need these support entities to to give us training and
Speaker 370
3:06:36
to give us just mentorship so I hope
Representative Tracy Steele
Unverified
3:06:44
I answered your question. Okay, Representative Steele. Thank you so much Madam Chair. It's quick, very quickly. Doctor, you mentioned that the economic impact on your facility has been been about 6,000 a week.
Is that all your facilities combined? Yes, sir. And how many
do you have again? I have four. Four. That's tough. How long do you
Senator Breanne Davis
Unverified
3:07:28
think you could sustain that type of? To be honest, I don't even
Representative Tracy Steele
Unverified
3:07:34
know. Without making drastic changes, not long. You mentioned
you had some workers with bachelor's and master's degrees. How much more do you have to compensate them for their education
Stacy Pipkins
Unverified
3:07:48
experience? I have, you know, we have a wage scale that's based off of experience and education.
And so I have teachers that do make $13 an hour, but the more education they have, You know, it goes up to where I have some staff members that are making $25 an hour. They're on salary. They receive PTO, paid vacations. We offer a comprehensive insurance program. Like she mentioned with the TEACH program, I've got six teachers that are getting college education through that, and I'm responsible for 10% of their tuition as a TEACH provider.
So all of that extra stuff is allowed because of that tiered reimbursement system. But when that's taken away, I won't be able to do any of that anymore. Both
Representative Tracy Steele
Unverified
3:08:38
of you provided us with an excellent presentation. I really do appreciate that. Madam Chair, if I may, I'd just like to
ask the audience, how many of you feel you're in a very similar predicament than these ladies who are testifying? Thank you so much.
Representative Jim Wooten
Unverified
3:08:56
Thank you, Representative. Representative Wooten. Thank you, Madam Chairman, and thank you, ladies, for being here.
And, Doctor, I'm proud to say you're in my district with one of your facilities, and we're thrilled about that. Is it a detriment due to the fact that we pay a higher voucher rate in Arkansas? all maybe it's based on cost versus the market is
Senator Breanne Davis
Unverified
3:09:31
that a disadvantage absolutely absolutely um
the market rate doesn't even come
Stacy Pipkins
Unverified
3:09:37
close to what it actually costs to run a program and if we revert back to that programs are not going to be able to maintain
Representative Jim Wooten
Unverified
3:09:46
quality classrooms there's no way so it is a positive
Senator Breanne Davis
Unverified
3:09:50
advantage that we pay more absolutely okay that ensures
Representative Jim Wooten
Unverified
3:09:54
that we have quality educators in our classrooms thank you okay my next question is have you heard any rumors of a group
by the name of louisiana educators involved in uh in the child care in arkansas
you hadn't no okay where do we rank compared to
louisiana I'm not really sure. Well, let me share with you. We rank in the upper 40s, and they're in the lowest 40. So I wanted to make that point. Would you agree that poverty is one of the, if not the major, one of the major issues facing Arkansas?
Senator Breanne Davis
Unverified
3:10:42
I think that's the case with a
Representative Jim Wooten
Unverified
3:10:46
lot of our families that we serve. So what we're doing in
early childhood training of your people by the university and by ASU and UAMS, we're working toward solving that problem of poverty, which is one of the greatest problems, in my opinion, that we face as a state. Is that correct? Yes, sir. And
Stacy Pipkins
Unverified
3:11:08
I believe that early childhood education, she mentioned the importance of it.
because so much of a person's brain development occurs in those first few years everything that's poured into them in our classrooms has a direct impact on who that child is going to become later in life we lay the foundation for the kind of student that they're going to be in the outcomes later and high quality care it's been proven to improve poverty rates incarceration there's all kinds of areas that that's been linked back to high quality care in a market rate model is going
to take away the ability to provide high quality care that's going
Senator Breanne Davis
Unverified
3:11:51
to affect generations to come it's going to affect society for generations
Representative Jim Wooten
Unverified
3:11:58
see i see a conflict between the ade what they say here and then what their action is what why would you change a program that does what this does then they want to blame it on the federal government. It's a problem that needs to be confronted either by the legislature or the governor.
But together, we can solve this problem. I mean, if we can spend $450 million on private school, then we can solve this problem of $80 million, if that's what it is. Thank you. Thank you. Mr. Chairman. Thank you both and sir. That's why we're here Thank you Senator hammer Thank you. I want to I want to go
Senator Kim Hammer
Unverified
3:12:52
back and ask you a couple of questions
Regarding some of the numbers that you threw out some of the statements you made to get an understanding of something first of all Doctor are you profit or nonprofit? I'm profit and you're in homes I'm sure your profit to also, right? Yes, not registered as nonprofit. Okay And one of y'all made a statement a while ago that you do not take the co-pay for the vouchers. Did I understand that correctly? Yes, sir. All right. So in a scenario where you're charging $195 a week for infant, how does it play out as far as what the voucher would pay toward that?
Is the parent paying the $195 themselves out of their pocket and then what you would have received in vouchers you're just not paying? Or
Stacy Pipkins
Unverified
3:13:38
walk me through that, if you would, please. Our private pay parents would pay the $195, and then the student, the SRA subsidies pick up the tuition for the children that receive the subsidies, and we're actually reimbursed higher rates than what our private pay is. So, for example, instead of getting $195 for an infant, I might get $256 for an infant.
So there's quite a difference in what the subsidy provides. But that excess income from that subsidy spot doesn't just benefit that subsidy child. It benefits every child in the program, you know, because the money is going towards increasing quality in our classrooms, which all children benefit. All right. So does the parent
Senator Kim Hammer
Unverified
3:14:21
that is receiving the voucher then pay $195 out of pocket? No, sir. What do they pay out of pocket? They don't.
Senator Breanne Davis
Unverified
3:14:29
Those that are receiving the subsidy don't pay.
Senator Kim Hammer
Unverified
3:14:33
All right, so you could take $256 of the voucher allotment for that scenario, but you only take $195 of that? Am I confused? Yeah, I think so. Help me clear up the gray. I mean, where they have a copay, it might
Stacy Pipkins
Unverified
3:14:47
be $20 a month, a week. You know, it varies depending on the child, and there's not many of them. I don't know the figures because, like I said, we don't require the copays, But it would be a small amount that they would have to pay that would be their portion.
And so the amount that we get, that co-pay part would come out of that. Thus
Senator Kim Hammer
Unverified
3:15:13
the sliding scale effect because those parents are going to, where they may have paid 20, they're now going to have to pay whatever the sliding scale adjustment is. Am I understanding that correctly?
Stacy Pipkins
Unverified
3:15:24
Yes. And under this new system, because the voucher rates now, or I'm sorry, the school readiness assistance subsidies, are lower than what our private pay is. In addition to the families now having to pay that co-pay,
they're also going to have to pay the difference in what the subsidy pays up to our private pay rates. You know, we've never had that as an issue before. So parents are not only going to have to pay that co-pay, but now they're going to have to pay the difference in the subsidy in our private pay rates. And as much as program providers love their families and would love to say, not going to do that it's not financially possible to not charge them we've had multiple
Senator Breanne Davis
Unverified
3:16:04
text messages just today of parents that are already saying today is their child's last day because they
Senator Kim Hammer
Unverified
3:16:10
cannot afford it tomorrow okay and miss eichler you have a a home center um did i understand you say a while ago that you
Speaker 364
3:16:23
don't take of the four you have you don't
Speaker 373
3:16:25
take any of the vouchers none of those children are our our subsidy children no
Senator Kim Hammer
Unverified
3:16:30
I have taken subsidy children it in the past okay so so all yours are private pay and they pay
whatever you charge right sir okay so in what capacity because this is not going to affect you at least here and now unless you start taking children who
have vouchers attached to them is that correct and this
Speaker 417
3:16:49
will affect everybody this will affect everybody it is not directly affect me at
Speaker 364
3:16:53
this moment but I have children that are on my wait list and some of them have have I don't know their income but some of them have made out and they've asked if I if I take you know the the voucher system or take the voucher and and I do I'm set up to take it I just don't have any children that have ever been eligible to take it lately so um that you know can um that can make my decision that's whether you take them or not
Senator Kim Hammer
Unverified
3:17:25
yeah okay um and then the last question the cost versus market i'd asked um the secretary a while ago do you in another area uh like in in medicaid that we now have it set up where anybody receiving any medicaid funds has to go through a rate study that was alluded to a while ago for example assisted livings have to go through it nursing homes everybody has to go through it so the cost study i think doctor that you referenced a while ago do you have a do you have a study uh that is
a cost study or did i misunderstand what you
Stacy Pipkins
Unverified
3:18:04
what i meant was that the current tier reimbursement system that we receive our funding on is based on a cost model and Gina Dickey's already left but she probably could have answered that better but they determined she's running to the table
Speaker 350
3:18:21
I was just reintroduce yourself for the record
Speaker 87
3:18:47
Childhood Services question about cost model and market market rate so another clear two
Speaker 330
3:18:53
things that I was thinking while you were asking the question is if you recall the secretary said we're paying 75 percent of the market rate so this is not the market rate we're paying 75 percent of the market rate so that's different right than what the fee paying
parents would pay in that market so it's less than that is what we're moving to what we were basing our reimbursement rate is a cost model which is considered best practice because it does reimburse at the rate in which it costs to do the extended quality which this these ladies have mentioned those are there the original cost model was done by uams he mentioned them doing the market rate but they before we move to that reimbursement rate based the the the six levels of the quality
rating improvement system are not dictated by the child care development grant but they do ask for a state to have one. So what the state has and how they do it, wildly different across the 50 states. We chose as a state to attach the subsidy rate, the child care reimbursement, to those levels of quality. To incentivize is a word we use often. It is incorrect. It is reimbursing you for what
we ask you to do. And what we ask you to do is based on best practice of early childhood development and what would most ready children for school so they're they're connected in that way that the state went through rules and regulations the propagation process for what is in our quality rating improvement system but us choosing to spend our money and allocate it that way connecting those things together is not and so when we chose to do that as an opportunity to improve quality across the state in 2010 when we initiated the quality rating improvement system
we asked for it to be based on a cost model so that we could reimburse people for what they were asked to do that that didn't happen
Speaker 355
3:21:03
initially but did later and so dr. la ray mckelvie did that cost model at uams
Senator Kim Hammer
Unverified
3:21:09
right and and if you offer the better beginnings then
i'm just trying to get my mind around it we're asking you to do something such as better beginnings to raise the expectations of the standards of the quality education that children
get in preschool programs that offer such as the better beginnings but now we would be saying we want you to continue to do that we're just not going to reimburse you for the cost to do that correct that pretty accurate place where we
are and they're not going to pay us either I'm sorry and we won't be paid for that
quality either right so you have the choice of either continuing on that path absorbing the cost or abandoning those programs which those
programs are by your choice to choose to implement them and do them otherwise you would be a preschool facility that may have great people doing great things but they're not going to be that you're not going to have that stamp of approval of being a better beginnings program. Okay,
Representative Denise Garner
Unverified
3:22:16
it. Thank you. Thank you, Senator. Representative McGuriter.
Representative Jessie McGruder
Unverified
3:22:24
Thank you, Madam Chair. I want to thank you ladies for
all the work that you're doing and
have done. As I stated earlier, I'm a father of six, So all of my children were involved in early child care. Some came to home daycares, and some were able to go to ABC programs. I would also like to reiterate, make sure we're reaching out to our not only state legislators, reaching out to our legislators who represent us in the federal government, our congressmen and our senators.
They need to know the issues that we're facing. I know we are frustrated about this, but I want to get an understanding. How difficult is it for you all to get certified
Senator Breanne Davis
Unverified
3:23:13
or trained staff? It takes a lot of time, effort, energy, money to make
Stacy Pipkins
Unverified
3:23:19
sure that our staff is prepared, our classrooms are prepared. There's two different parts of that. You have the environmental rating scale, which assesses your classrooms, your teachers, and things like that.
But there's also the PASS model that they score you on. And this is your business practice side of things. And so they're looking at your wage scales, your benefits, family support systems, family engagement activities, your staff qualifications. All of that is factored into your PASS score. So without the higher reimbursement rates, there's no way to score high enough at these levels to be able to afford to maintain the quality.
Representative Jessie McGruder
Unverified
3:24:08
And with the high infant mortality rate and lack of highly trained professionals in education and in child care, we're preparing for a bad outcome in the next eight to ten years if we don't get this problem fixed quick. Absolutely. Which brings me to my next question. And before I was blessed to serve as a legislator, I was the PPC president at my school district,
which was a very difficult task because you're bringing teachers together and a lot of people want to complain about issues instead of coming up with a fix for a problem. So Representative Wooden talked about it earlier. We need to figure out a way to fix this issue. How can we bring everyone to the table across the state so that we can work on fixing this issue? I know there's 75 counties in Arkansas, and I know we can't have 75 people in the room talking,
but we need people from every area so we can know the difficulties and frustrations that they have, which in their area, especially when you're serving people from a low socioeconomic background, and you do have other communities that have more affluent people in there. but we need to know what problems you're facing and how we can fix and resolve these issues. So I'm asking how would it look trying to bring everybody to or bringing people together to work on how we can better fund or work on our child care issues here in the state of Arkansas.
Speaker 333
3:25:45
That's a great question because I think we've been asking to be brought to the table,
Speaker 330
3:25:53
but we haven't really given an indication of what that would look like. Two things came to mind. One is we have different associations. Arkansas Early Childhood Association represents 1,200 providers currently, Family Child Care Association, which we work very closely together, as well as others like home visiting. So there's sort of the – there's different groups of us within this group, and we have professional organizations, so that's an opportunity.
The local leads that's been established through the LEARNS Act, there are now 26, I believe, local lead captains. They cover every state, and they're partly charged with getting to know every program in their geographic area. So they could either do things locally at that level and kind of town hall, maybe bring some people together, I think could be lovely. Or representation from each of those areas that come together for more of a council kind of thing. I think there's a lot of ways we could do it. But we have a way, as you see, this is a pretty good audience for a Tuesday afternoon.
We know how to find each other. So you tell us who you
Representative Jessie McGruder
Unverified
3:26:56
want, we'll find them. Okay, my last thing, Madam Chair, this is a statement. I don't know who organized all of you being here today, but that same person needs to be organized, and you all contacting our U.S. delegation also. Thank you. Thank you, Representative. Senator Hammer,
Representative Denise Garner
Unverified
3:27:13
Mr. Follow-up. Thank you, Madam Chair. And, you know,
Senator Kim Hammer
Unverified
3:27:18
as a legislator, we get in a position where we have to get educated about things
because nobody knows everything, and this is a really good educational process today. And sometimes we ask questions so that we can give you a platform in order to respond in a public manner because this is being broadcast live and the media is here. In the assisted living world, and I use that as an example, they came to us and they said, hey, we need higher rates because of X, Y, Z. And so for a long time, we battled that back and forth until finally a piece of legislation was passed
that said, okay, we're going to do a cost study of what it actually takes to deliver service. And so my question is, both of you have said that you're for profit. My question is that in order to determine what is a true cost, because that may vary. You may pay your employees $13, whereas the one down the road may pay $11. One may give the benefits, one may not. And we're trying to get to what is a true maintainable cost because y'all don't like market studies, right? You don't like the market study approach, right?
So I guess my question is, would you
as a private owner be open to opening your books and participating in order to help us to know what the true cost is So that when we say the cost to operate should be this, because the variables are going to be so wide that how are we supposed to know what the middle of the road true cost is? And I'd like your reaction as how you would feel as a private for-profit preschool, because how are we supposed to know what true cost is if we can't see what it actually takes?
Senator Breanne Davis
Unverified
3:29:02
I think that I'm pretty much willing to do whatever it takes to help get us a system that works. Okay, because we've got a pot of money, and
Senator Kim Hammer
Unverified
3:29:14
nobody likes what's being handed down to us, but we've got to deal with what's being
handed down to us. And either we've got to look at the state budget and say we need to contribute more money because the feds are doing what they're doing, and we've got to merge the pots. But we're limited because federal government says you supplant, we're going to take money away, just too convoluted for one thing.
But if we've got to look at how can we make the money we've got go further and there needs to be a cost to study, then we need to determine true costs that everybody can live with. The only way I see to do that is we're going to sit at a table and people open up and say, here's my data, let's put it all in the same pot. So as these conversations happen, I think that's a variable that needs to be included in the discussion. Would you agree? Thank you. Yes. Thank you, Senator. Representative McKenzie.
Representative Brit McKenzie
Unverified
3:30:08
Thank you, Madam Chair. Just one question. You mentioned, Dr. Eichler, that you reached out to families, and the family said that starting tomorrow, we're not going to send our child. So you did do some work to update your per rate, your daily rate or weekly rate that you shared with them. Is that correct? I'm not sure. Who are you addressing? Sorry, Dr. Eichler. I'm Ms. Eichler. This is Dr. Dr. Hess. Sorry, sorry. Long day. Been a long meeting. Yes, it has. You mentioned that you said you have parents already reaching out to you saying if this were to be going to go into effect tomorrow, we're not sending our kids.
So you did the math. You figured
Speaker 377
3:30:41
out what the. No, I haven't. We basically gave them the letter that
Stacy Pipkins
Unverified
3:30:46
the Department of Education gave to us to give to them, which really doesn't say anything other than you're going to have to start paying a copay and you can get more information from your provider which we don't have so we just let our families know that changes were coming that there would potentially be copays responsible we gave them the chart that the division had posted on the website so that they could kind of figure
for themselves where they would fall in that but that's really we that's really all until we receive their actual authorization forms from the division whenever or the i keep saying the history but from the department of education right um until we receive those we really aren't sure what to tell them so you're having parents balk at
Representative Brit McKenzie
Unverified
3:31:33
any cost they're saying we can't we won't be able to send our kids here if it's a dollar well
Stacy Pipkins
Unverified
3:31:39
i think that i think that the majority it's more
it's more than a dollar um and i think that you know they're looking at that chart that we provided um and kind of guessing for their self where
Senator Breanne Davis
Unverified
3:31:52
they're going to fall and based on that chart they're they're just assuming they're not going to be able
Speaker 157
3:32:00
to afford it okay okay um as a follow on dr pickens is that correct
Representative Brit McKenzie
Unverified
3:32:06
that's your i'm so sorry um from asu uh i would love to know more the this class we're going from a better beginnings framework or structure to
Speaker 330
3:32:16
class you might have to hit your button though yes she referenced the two internationally adopted tools across the country and the world for ERS was is the environment rating scale and the program administration scale we've been told now that we will move away from those two indicators and we'll move exclusively to class, which is based on adult-child interactions. It's delivered in a little bit different way.
And currently, the intention is to have it done sometimes internally, where the provider would do their own evaluation, and then with an external evaluation. But it is a very different tool than we've used previously. Do you have
Representative Brit McKenzie
Unverified
3:33:05
a value judgment on it? I mean, Have you
Speaker 330
3:33:09
been hands-on yet? I am not certified in the class. My experience mostly with childhood services is around organizational management, business practices.
Okay. Class is a classroom tool for curriculum and adult-child interaction. I keep poking.
Speaker 333
3:33:29
Do you like it or do you not like it? So, you know, I came here with Dr. Kelly, and I feel like I'm representing the university today, And that is not something I'm
Representative Denise Garner
Unverified
3:33:40
prepared to say. Okay. Thank you very much Senator love and I'm just reminder that we've
Senator Fredrick J. Love
Unverified
3:33:44
got one more speaker. Okay. No, it's just a quick question because I want to go back to something that Senator hammer said in regards to
Kind of opening up your books and just
to the degree that that you all may or may not I understand what he was saying is like having your books open. So is there any information, just say, within your
financial records, books, or whatever, that possibly should not be open to
the public? And I mean, I ask that because, you know, with any other company that receives incentives from the state,
We don't ask them to open their books, so I'm just, because of, you know, there might be some things in your records and your books that you just
Speaker 330
3:34:39
cannot or would not disclose. Sure, and I appreciate that question, because I had the same concern. One thing that's really different, and I feel like it's obvious but not always obvious, is that we are now part of the K-12 system, But we are a group of individual organizations that range from faith-based to nonprofit, for-profit, school-based.
And really what holds us together loosely is a sense of a code of ethics that we share together. And we all agreed to meet minimal licensing requirements. So asking things of these organizations is different than asking a school district who is absolutely accountable to their department. What I had intended to tell Senator Hamer after the meeting was the original cost model took data we had from Louisiana. They're a neighboring state with a very similar economy at the time.
They collect this sort of business data, cost modeling data for their group. Those were put into a beautiful, for anybody who geeks out on spreadsheets, the most beautiful Performa that was given to us by a colleague that's nationally recognized for her work in this area. Then we, Dr. McKelvey and I, took this to providers that we knew had high-quality programs but weren't accepting vouchers, asked them to bring their budgets with them.
We sat, I believe, in the second floor of the First Presbyterian Church in Little Rock. We asked them, we put up there what we thought the Performa, this is what we think it costs you for rent, this is what we think it costs you generally for utilities, correct our math as a collective group. But the way the performance created is where any individual program could put in the variations for her own rent, her own utilities, and give her an idea of what it would cost her to have infants.
We've mentioned that before. Most programs, we talked about not making any money, most are losing money in the infant room. They use the money they make in the four-year-old room to offset the loss. So they operate these classrooms at a loss. All of that is in that performa that Dr. McKellie created. Okay. All right. Thank you. Senator Hammer. Yeah,
Senator Kim Hammer
Unverified
3:36:57
and thank you, because if anybody walks out of this room with the impression that Senator Love, and I appreciate him putting it on the table, I'm not asking for you to, when I say open your books,
What I'm saying is participate in exactly what you said, and that is that the providers would, how much is your rent? How much do you pay? What's the classification, justification? All that assimilation of information so we can get true cost and arrive at what is the average. Some are going to be higher, some are going to be lower, some are going to like it, some aren't. But we've got to get to that at that cost level. You know, and the comment about the infant, I know some daycare centers, they take infants almost at a loss,
but it's part of their business model because if you take that infant, you've probably got that infant all the way through the one-year-old, the two-year-old, three-year-old, four-year-old. That's like investing in your future. And so, you know, as far as taking infants, I just think that's part of the savviness of a business model is, yeah, we want to take them. And we've got to stay in our 1 to 5 ratio. We can't go to our 1 to 12, but you're playing the long game instead of the short game. So a lot's been said about infants.
I just wanted to throw that out there. And once I was an infant,
Representative Denise Garner
Unverified
3:38:18
too. Thank you. Thank you for clarification. Thank you, ladies, so much for being here
and for answering all of our questions. Appreciate it. Thank you. And our last speaker today is McKinley Hess from Conway Cradle Care.
please introduce yourself for the record hi i'm mckinley hess i'm executive director of conway cradle care we
Speaker 446
3:39:03
are a non-profit that provides affordable high quality infant and toddler care as well as mentoring to adolescent parents so they are able to continue their education I want to speak to you today about the sudden changes that have been announced by the ADE.
These changes made with no warning are already beginning to unravel a fragile system. If they continue, the outcomes will be devastating, not just for families but for our entire state. High-quality child care is not babysitting. It is the foundation of early education, workforce participation, and community stability. Yet with the reduction of financial support to families and child care providers in Arkansas, we are facing a crisis that spans our entire state. Most small centers operate on razor-thin margins.
Now many are announcing classroom closures, staff layoffs, and tuition hikes that push more families out of reach. For nonprofits like ours, it can mean the difference between being open and closed. While we can subsidize by offering private pay client spots, our mission drives us to help these teen parents first, and our program relies on these SRA funds to make sure these moms can stay in school. When support for affordable child care ends, families are left without safe options.
Licensed child care is already scarce in Arkansas, especially for infants and toddlers. Every closure means a longer wait list, parents forced to leave the workforce, and children losing access to early education. And the children will lose the most. 90% of brain development, which you have all heard and all discussed, happens before the age of five. When they miss that critical window, they fall behind before they even step foot in kindergarten. Research shows that first-grade readiness directly ties to higher graduation rates and lifelong success.
This is not just a child care issue. It's a workforce issue, it's an education issue, and an economic issue. Without child care, businesses lose employees, productivity falls, and Arkansas's economy suffers. According to the U.S. Chamber, Arkansas loses nearly $800 million every year in earnings, productivity, and revenue because families can't access child care. Let me bring this a little closer to home. On February 5th, providers across the state were informed that the ADE would be implementing a wait list starting February 15th.
However, at that time, we were informed that there were populations that were exempt from this wait list. And teen parents were at the top of this list. Since August 18th, we have been providing free child care to 10 teen parents so they can continue their education and not have to drop out. We were informed on August 29th that they had made changes to the exemption list, and teen parents were no longer exempt.
So now they are currently sitting ducks on this over 1,200-person wait list. and not being able to receive these funds. Did you know that Arkansas is almost double the national average of teen pregnancies, and only about 50% of those in our nation that have a child in their adolescence will receive their high school diploma by the age of 22? At Cradle Care, since 2006, 86% of our teen moms have graduated.
100% have graduated in the last four years. When we invest in child care for teen parents, we're not just lifting one generation. We are changing the trajectory of many. Let's look at the bigger picture. Infant care in Arkansas costs anywhere between $8,000 to $10,000. That's nearly 30% of a single parent's income of less than $30,000. Infant care is almost more expensive than a four-year in-state college tuition in Arkansas.
These are not abstract numbers. These represent families struggling every day to hold it together. Year after year, we see the value of affordable early childhood education and how it propels families towards success, while families who lack access continue to struggle. Their children typically perform more poorly in school, and they become susceptible to high-risk behaviors. The support we invest in child care today is not charity. It's a direct investment in Arkansas' future.
National research shows that for every $1 invested in high-quality early childhood education, that generates up to $7 in long-term savings in economic returns. That's money saved in remedial education, public assistance, and incarceration. That return comes in the form of stronger families, healthier communities, and more competitive workforce. Childcare is infrastructure just as vital as roads, power grids, and broadband. Arkansas is at a crossroads as I see it.
We can sit back and watch the dominoes fall. Child care closures, parents leaving the workforce, children falling further behind, and our economy losing ground. Or we can demand better. We can insist ADE rescind these changes, create a responsible plan, and bring transparency into the process. I'm asking our state leadership to stand with providers, families, and children, and restore the support needed to keep child care accessible, affordable, and sustainable for Arkansas families.
Representative Denise Garner
Unverified
3:44:50
Thank you for your time and attention to this matter.
Thank you so much. We do
Senator Fredrick J. Love
Unverified
3:45:01
have a couple of questions. Senator Love. Thank you, Madam Chair. First
of all, I'm going to say, wow, that testimony was powerful, Especially knowing, I mean, I haven't even thought about, you know,
teen parents and then the impact that early childhood programs had on them directly. So, wow.
All right. So, let me go because this is, Madam Chair, this is where I'm kind of confused. I'm not going to ask you a question directly, but
I do want to ask you. So tomorrow it seems as if ADE is going to move forward with the part of the parents paying the co-pay. I'll have an announcement for that
Representative Denise Garner
Unverified
3:45:48
in just a minute. Okay. They had to go to another meeting.
Senator Fredrick J. Love
Unverified
3:45:53
All right. So you have an announcement for that. So I'm going to then hold my comments, and then I'll get
back in the queue once you make
Representative DeAnn Vaught
Unverified
3:46:03
that announcement. Sounds good. thank you madam chair great testimony i'm gonna again
say that needs to go to congress it's very powerful we can't just make federal dollars show up here they have to come here as as much as i
wish we could just so we could continue on as we are right now um again though it's very powerful You definitely need to send every word of that to our federal delegation and anyone else that you know in D.C. that it might would help push over the finish line to help us get to where we need to be. Again, it's not us cutting. Oh, absolutely. I wish if we had a tree somewhere we could go pick, maybe that would be nice.
Speaker 446
3:46:57
I think our program's biggest issue is that these parents are being waitlisted when they were off of that up until the end of August.
Representative DeAnn Vaught
Unverified
3:47:04
And I did know that about the teen mothers, which breaks my heart because they are the most
vulnerable and they do need to get their education and they do need a place for their children to go. So I appreciate your
Representative Denise Garner
Unverified
3:47:17
testimony. Thank you. Thank you, Madam Chair.
Representative Jim Wooten
Unverified
3:47:22
Thank you. Representative Wooten. Thank you, Madam Chair, and I'll be very quick.
Would you agree with this statement that the parents, the children, and the providers, and the universities
are not responsible for the mistake or the error or the overspending or the overbudgeting, but yet they're carrying the full brunt force of what's taking place. Yes, I would agree with that. And it's easy to sit in a state building or federal building and make a decision, but I'm telling you, when it comes back down to it hurts a child, the well-being of the parents and the providers, both university and private providers,
it's our mistake, but yet we're forcing the public to pay for it. Would you agree with that?
Yes. Okay. Thank you. Thank you, Madam Chairman. I think
Representative Denise Garner
Unverified
3:48:26
that's all the questions, and I just, I can't think of a better way to end this meeting than your testimony. I had a little statement, and I don't even need to say it. I think we all know that the first three years of life, certainly the first five, are the most important in brain development,
and that every moment of that love and play and inspiration that the providers and the educators are making certain that our children have is more important than a lot of things that we're dealing with. It affects them the rest of their lives, and it affects the families and the businesses and the communities that we all live in. And we know that's an issue, and we all, I think, want to make sure that we're doing something to make it better for everyone involved.
So I do feel like there is some light at the end of the tunnel in that this is the first time in eight years since I've been here that we're really spending a lot of time on early childhood. That's because of y'all. and we're going to need everybody's help to make sure that we're all involved in making the effort to fix these problems. So I appreciate you being here. I appreciate you being patient with us.
This kind of meeting is a little bit different, and so I appreciate you all staying and hearing the testimony and supporting us as we're trying to learn about what's going on. The department had to, they had another meeting to go to, so Secretary Oliva and Ms. Salas Ford sent a message that said they will delay the reduced rates until November the 1st, but the co-pays will be implemented tomorrow.
Obviously, we don't have the ways to do that until October 3rd. that the department will communicate this directly to providers and parents tomorrow. So that's the message that I got from them. And I'm sure you guys will let us know if that
doesn't happen. But I appreciate so much you being here. And just need to ask if there's any further business
for the committee. I'm sorry, Senator Love.
Senator Fredrick J. Love
Unverified
3:50:53
Okay, thank you. Thank you. So this is really what I wanted to pose, and thank you for
giving us this update, is that to providers, once that copay goes into effect tomorrow, number one, how many of you are going to collect it? Or number two, can you all even not collect it on behalf? I mean, like, these are the things that I'm trying to figure out because if you must collect it or if it shall be collected, then how many kids don't have care after today?
So these are the kind of the questions, Madam Chair, that I'm having because we need to
know that if the copay is in effect and they have to collect it and families can't pay it, then this is a nightmare. It is, and I will
Representative Denise Garner
Unverified
3:51:55
make sure that they send us the information that they're sending out to the providers and to the families. Okay.
Senator Fredrick J. Love
Unverified
3:52:04
But the rates aren't calculated yet. I would really like to know that before we leave today. There's no way we can get it
Representative Denise Garner
Unverified
3:52:12
today, I don't think. No, providers know who I'm
Speaker 318
3:52:14
talking to. Oh, oh, oh. All right, thank
Representative Denise Garner
Unverified
3:52:18
you. I don't know that. Do you all have a way to know? Can you raise your hand if you think? right nobody knows how much and you won't know until right right so this is something that's going to
Speaker 453
3:52:34
have to come out from the Department madam chair
Senator Fredrick J. Love
Unverified
3:52:41
could we just make one exception to have this gentleman get just provide updated
numbers so that we can have a I
Speaker 455
3:53:01
certainly certainly thank you so much for this
Shahid Sheikh
Unverified
3:53:07
opportunity my name is Shahid Sheik I'm the president and CEO for
Little Martians Learning Center across northwest Arkansas Benton County in Washington County so my team and I in the last week or so we have been working on updated numbers and we've gone through and analyzed what the department of education provided and we looked at what the differences in the rates were for my four facilities that I operate that serve over 300 families in that area the financial impact the burden that's being created is in excess of fourteen thousand dollars
a month. This burden will be primarily impacting the middle to lower income families. And in the format of the co-pays that you're talking about, roughly 50% of that is directly impacting them. So about $7,000 of that is going to go there. I have options as an owner, similar to the other ladies who've beautifully expressed their opinions on this and the facts that we have a choice. We
can either pull the lever of raising tuition rates or we can turn around and try to get our suppliers and our costs down from this perspective or we end up going back to the families and saying we I'm sorry we cannot serve you because it no longer works. I know some of you were asking about the model. From a child care private paying facility perspective, just give you some few numbers to think about. We operate on a model of 50% of the revenue goes back to our teachers. So we set aside
50%. Every dollar that we collect, 50 cents goes to take care of payroll. 25% of our revenue that we collect goes to take care of administrative, rent, utilities, insurance, liability, payroll insurance that myself in my center what I can speak to I have a payroll of in excess of each location $40,000 a month so there's over $5,000 that is generated every month for paying payroll
taxes on top of that so when you look at those costs and expenses and you're talking about the impact to the economics of this the families who will lose their coverage and in access and then the impact for the teachers. In order for me as a provider, in order for me to absorb this cost, I would literally have to look at potentially worst case scenario, and I've shared this with my team, that I will do my best to avoid this scenario. That's why we're looking at other options. But two full-time teachers, their salary would be reduced immediately
to help offset. Contracts negotiated, you're talking about $2,500 a month in savings. The average pay that we have in Northwest Arkansas, specifically Benton, Washington County, we pay over $16 an hour for a full-time teacher, $16 an hour. So you're talking about $2,800 a month to $3,000 a month. When we're evaluating whether the model that we're operating is going to be successful or not, and we're happy to share and open up our books from this perspective,
which I just gave you this model, that the benefit that we have being in this organization, and as we shared earlier as well in the meeting that we had with Secretary Levy, is that, you know, immediately we have parents who've already communicated to us that they will be pulling their kids. We have teachers who have expressed that they're not able to function without. We made commitments and we raised wages based on the intermingling of the funds that took place. This
was no fault of any child care provider that decisions were made by the state to accept federal funds, make a criteria of better beginnings, and ask us to invest in that. And so we made investments on that commitment. We did not intermingle those funds. That was a decision that was made at the state level. And now it's being pulled out. So instead of having a plan and communicating that plan and working together as a team, we're just going to go ahead and
amputate. That's what's impacting us. So I want to kind of conclude with this. When we're looking at solutions, the pause for a month is okay, great. We're going to have some breathing room to go back to but it does not solve the the issues that we are faced with some providers are in a better position than others but no provider can take a 40 cut and plan and be able to survive
it's just not possible from a business perspective you cannot operate that way it's not even profit It's revenue that's being impacted. So this is a very important thing. Thank you. Thank you very much. Thank you
Representative Denise Garner
Unverified
3:58:15
for all the information, and I'm sure we'll be calling on you again to help with some of these issues. Thank you. So I'll ask again, is there any other business for the committee? Seeing none, this meeting is adjourned.
Agenda
A. Call to Order
B. Discussion of Changes to Childcare Reimbursement
C. Other Business
D. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — EDUCATION - HOUSE EARLY CHILDHOOD SUBCOMMITTEE, Sep 30, 2025 | Agenda | 1 | Official source ↗ |
| Handout 1 - Early Childhood Acronyms | Exhibit | 2 | Official source ↗ |
Speakers
Speaker 1
Representative Denise Garner
Unverified
Speaker 20
Speaker 25
Speaker 39
Speaker 52
Representative Brit McKenzie
Unverified
Representative DeAnn Vaught
Unverified
Speaker 96
Representative Julie Mayberry
Unverified
Speaker 125
Speaker 130
Representative Stetson Painter
Unverified
Speaker 138
Speaker 135
Speaker 144
Speaker 148
Speaker 44
Representative Keith Brooks
Unverified
Speaker 165
Representative Matt Brown
Unverified
Speaker 41
Representative Jessie McGruder
Unverified
Speaker 185
Representative Tracy Steele
Unverified
Representative Andrew Collins
Unverified
Speaker 35
Speaker 213
Speaker 36
Representative Stephen Meeks
Unverified
Speaker 76
Speaker 61
Speaker 230
Speaker 102
Representative Jim Wooten
Unverified
Speaker 19
Representative Ashley Hudson
Unverified
Speaker 176
Senator Kim Hammer
Unverified
Speaker 269
Representative Glenn Barnes
Unverified
Senator Fredrick J. Love
Unverified
Speaker 123
Speaker 291
Speaker 29
Senator Jonathan Dismang
Unverified
Speaker 106
Speaker 24
Speaker 316
Speaker 116
Brendan Kelly
Unverified
Speaker 329
Speaker 330
Speaker 335
Speaker 337
Speaker 87
Speaker 352
Speaker 364
Stacy Pipkins
Unverified
Speaker 370
Speaker 375
Speaker 384
Speaker 389
Speaker 392
Speaker 394
Senator Breanne Davis
Unverified
Representative Cameron Cooper
Unverified
Speaker 373
Speaker 417
Speaker 377
Speaker 350
Speaker 355
Speaker 413
Speaker 333
Speaker 157
Speaker 446
Speaker 318
Speaker 453
Shahid Sheik
Unverified
Speaker 455
Shahid Sheikh
Unverified