The waitlist at the child care center Lori Berrigan runs in Palmer doubled this last year. There are 250 children on it. Berrigan said she’s running LifeWays at capacity, but the business is barely breaking even.
“We’re not profitable, even with 250 kids on our waitlist, because we’re providing quality care. And you can’t provide quality care without paying your workers well,” she said.
Berrigan said she had to increase wages 30-40% to retain her staff. That means she has to raise her rates 30% starting this June. She said pandemic-era federally funded stabilization grants helped keep her business afloat, but even with the significant increase in her rates, she would have to consider shutting down if it weren’t for help from the state.
“I’m hoping that this is going to continue to be a viable thing,” she said. “I’m going to see how this year goes. And then I may have to make hard decisions.”
Advocates for child care contacted lawmakers about funding problems statewide and the effort appears to have had an impact. The Legislature put an additional $7.5 million towards grants for child care providers in the coming year’s budget bill.
More work to be done
The funding is half the amount advocates say it would take to boost wages and stabilize the industry. Some lawmakers say they have more work to do.
Sen. Cathy Giessel, R-Anchorage, said she’s hugely supportive of funding child care centers. She’s the leader of the bipartisan Senate majority caucus.
She said that reliable, safe child care affects the mental health outcomes of the state’s population in the future.
“We save money by appropriating for these vital services now,” she said. “The Senate majority leadership certainly saw the need for that for next year.”
The Senate approved $15 million for child care, but that didn’t get enough support among the Republican led House majority caucus.
“My goal is to spend a lot more time talking with House counterparts,” Giessel said. “I didn’t communicate as effectively as I should have.”
The $7.5 million currently in the budget still needs to be approved by Gov. Mike Dunleavy, who has the authority to veto all or part of individual items in the budget.
Rep. Julie Coulombe, R-Anchorage and a member of the House majority, supported the funding. She is the liaison of the Legislature on the governor’s child care task force that Dunleavy announced in early April. Coulombe wrote a bill aimed at boosting child care, which is co-sponsored by members of the mostly Democratic House minority caucus.
“The reason why I’m trying to figure that out is because I’m pro-life, and the governor wants to be a pro-family state,” Coulombe said. “I would hate for somebody to feel like they couldn’t have a baby because there’s no support once the baby’s born. So let’s give them some support to do it.”
It didn’t pass this year, but Coulombe said she’s hopeful for more movement on the child care issue when legislators reconvene next year.
RELATED: How Alaska’s child care crisis is impacting Anchorage families
Child care and the economy
Blue Shibler is the executive director of the Southeast Alaska Association for the Education of Young Children. She said child care centers are struggling despite intense demand for services.
“Whether you’re talking about rural Alaska or cities, every single part of Alaska has a child care shortage. And that in the heart of that sort of shortage is absolutely, simply that it’s not a good business model — you can’t make a profit. In fact, you can only suffer a loss, really, at this point,” Shibler said.
She said any funding is good, but more would be better.
“I think it’s going to help,” she said. “I don’t think we’re going to see growth in the industry, which is a bummer, because we really feel like having more child care availability is what was going to be part of the answer to the workforce shortages.”
That sentiment was echoed by Department of Labor and Workforce Development Commissioner Cathy Muñoz in April. “The lack of affordable and accessible quality childcare is a significant workforce challenge,” she said in a press release.
According to one study, 77% percent of Alaska parents reported missing work because of child care challenges. Forty percent of Alaskans interviewed for the study said that they or someone in their household had left a job, declined a job offer, or changed jobs because of child care issues in the last year.
Christina Eubanks has run a legacy child care center in Anchorage for the last 15 years. She said the last year has been the most stressful of her career even though demand is as high as it’s ever been.
“A woman said to me, ‘As soon as I knew my pregnancy was viable, I started looking for child care,” Eubanks recounted. “She’s literally looking at losing her job. And she’s a professional woman losing her career because she cannot go back to work.”
But to hire staff, Eubanks has had to raise wages — the minimum she pays is $16 an hour. That pay hike for her workers means that she’s raising her rate to nearly $1,700 a month per child this summer.
“There’s a limit to what people can pay,” she said. Her child care center, Hillcrest, is considering scholarships for currently enrolled families that cannot afford the increase. She said the state funding is going to help her keep the cost to families down while she invests in retaining her staff.
The $7.5 million in the state budget is the biggest boost she’s seen from the state. It would translate to about $10,000 a month for her care center — and she plans to put it all towards salaries.
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