Childcare and early learning central to debate over how to close WA budget gap

Gov. Jay Inslee’s budget proposal offered some hope for childcare and early learning advocates who were prepared to fight against deep cuts.

Inslee’s plan would boost childcare slots, provider rates and money for early learning facilities. But in an effort to save money, he also proposes delaying the expansion of some expensive programs and subsidies set to take effect next year.

Advocates say it could be much worse, especially given a budget deficit of at least $10 billion to $12 billion. No currently filled slots would be affected under Inslee’s proposal.

“We’re just relieved we’re not going backward,” said Joel Ryan, executive director of the Washington State Association of Head Start and Early Childhood Education and Assistance Program.

Inslee’s budget is far from a final plan. And it is underpinned by his idea to raise revenue through a new tax on the wealthy and higher taxes on businesses.

Those ideas are certain to get pushback from some lawmakers when they convene in January and begin work on budget legislation. Inslee, meanwhile, is on his way out of office and has limited sway over budget talks. Gov.-elect Bob Ferguson could come to the table with his own ideas about how to approach childcare policy and spending.

What’s clear though is that without additional revenue or shifting substantial dollars from somewhere else in the budget, the state will likely have to make much deeper cuts than what Inslee proposed.

“The challenge for all of us over the next few months is that this is going to be considered the high mark,” said Katy Warren, deputy director of the Washington State Association of Head Start and ECEAP. “There’s no going up from here.”

Expansion delays

The biggest change Inslee proposes is delaying expansions planned under the Fair Start for Kids Act.

The 2021 law expands and guarantees access to state-paid early learning programs and subsidized child care for families with lower household incomes. It funded new slots for providers and increased the number of families who can use them.

So far, the investments from that law are working, according to the Department of Children, Youth and Families.

“We’re seeing the investments pay off that more families are accessing care that they can afford,” agency spokesperson Allison Krutsinger told the House Appropriations Committee earlier this month.

Under the Fair Start for Kids Act, eligibility and access are supposed to continue expanding through 2030. But as eligibility expands so do expenses associated with the programs — one of the big drivers of the state’s multi-billion dollar deficit.

Starting in the 2026-2027 school year, the Early Childhood Education and Assistance Program is planned to become an entitlement, guaranteeing access to families below a certain income. This program provides childcare and other support services for 3- and 4-year-olds and younger children in some locations.

Meanwhile, Working Connections Child Care, the state’s subsidy program, is supposed to increase eligibility for families with up to 75% of the state median income starting next July.

To save money throughout the next four years, Inslee proposed delaying the Early Childhood Education and Assistance Program expansion to the 2030-2031 school year. That delay would save the state about $146 million through 2027.

Inslee also proposed delaying the subsidy expansion to 2031, a move that would save the state $119.5 million through 2027.

The delays don’t mean cuts to families currently using the programs, but they do mean a longer wait for future families who might have been eligible starting next year, leading to mixed reactions from childcare leaders.

“Working parents and childcare providers are forced to make unreasonable choices to make childcare work with their careers and their bank accounts,” Genevieve Stokes, director of Government Relations for Child Care Aware of Washington, said in a statement.

To some, the delays make sense. Early Childhood Education and Assistance Program and Working Connections providers are struggling to hire staff, leaving many slots unfilled.

Warren said Early Childhood Education and Assistance Program advocates were planning to ask for a delay of that program’s expansion because there weren’t enough providers ready to handle the influx of new children who would be eligible.

Provider pay

To increase the number of providers across the state, Inslee’s budget puts new investments into their rates over the next two years.

He proposes an 18% rate increase for Early Childhood Education and Assistance Program school-day providers starting in July. He also includes $510 million to fund rate increases for providers who take Working Connections subsidies. That would bring their rates up to the 85th percentile of 2024 market rates, a requirement under the Fair Start for Kids Act.

Those investments are a welcome relief to advocates who say increased provider pay is long overdue.

“There are families who really need these critical services,” Ryan said. “They can’t get it if the workforce leaves.”

Along with increases to provider pay, Inslee’s proposed budget adds more slots for the Early Childhood Education and Assistance Program through some restructuring.

He proposes removing 845 unfilled part-day child care slots, which his office said aren’t always appealing to parents who work full days. He then converts 250 of those into full school-day slots and adds 500 more, for a total of 750 more slots starting in 2026.

The budget also sets aside $58.6 million in the capital budget for construction and improvement of early learning facilities.

Ryan credited the Inslee administration for providing support for early learning though he acknowledged it’s not everything advocates were hoping for. He said they’d push legislators to limit cuts to current slots and prioritize funding for provider rates.

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