Testimony of Audrey Kasselman, Policy Analyst, before OSSE

April 4, 2024
Person Testifying: Audrey Kasselman
Title: Policy Analyst, DC Action
Testimony Heard By: OSSE
Type of Hearing: Budget Hearing

Good afternoon, Chairman Mendelson, members of the Committee of the Whole, and staff. Thank you for the opportunity to address the Committee today. My name is Audrey Kasselman and I am a resident of Ward 1. I am the Early Childhood Policy Analyst at DC Action and a member of the Under 3 DC coalition. Under 3 DC is a coalition that is committed to building a racially just early childhood system and to securing a strong start for every infant and toddler in the District. My testimony will focus on the critical need to reinstate all funding for the Pay Equity Fund and to fully fund the Child Care Subsidy program. Thank you to the Councilmembers who have already expressed their support to protect the Pay Equity Fund. The importance of this program cannot be overstated. 

Pay Equity Fund

Impact of the Pay Equity Fund So Far 

To date, the Pay Equity Fund has provided meaningful compensation increases for over 4,000 early childhood educators in the District. DC’s early educators, the majority of whom are Black and brown women, have long been underpaid and undervalued due to pervasive racism and sexism, even though they do the essential and critical work of caring for and educating the District’s infants and toddlers. Before the Pay Equity Fund, DC early educators with a bachelor’s degree were paid 33% less than their peers teaching grades K-8. The Pay Equity Fund also includes HealthCare4ChildCare, which has provided free or low cost health insurance to almost 2,000 early educators. 

To date, over 350 child development facilities are participating in the Pay Equity Fund. This represents 76% of all licensed child development facilities across the District. With a significant majority of early learning programs opted into the Pay Equity Fund, there is evident buy in to the program. 

As the District strives to increase the quality of early education and care, much of this work is focused on the quality of teacher-child interactions. That is why the District requires all assistant teachers to earn at minimum a child development associate credential (or equivalent) and lead teachers to earn at minimum an associate’s degree in early childhood education (or equivalent). The Pay Equity Fund financially rewards educators for meeting education requirements established by OSSE. Compensating early educators with a fair wage is an important incentive to earn further credentials. And, it is a common professional standard for workers to be paid commensurate with their education and training. Before the Pay Equity Fund, educators were not guaranteed any increase in pay for acquiring further credentials. Increased pay makes the significant time and dedication necessary to earn a credential or degree, while working as an early educator, more feasible and worthwhile. Furthermore, a salary raise following the completion of further education places value on the increased skills and knowledge that the educator will then bring to her classroom and the children in her care. 

Research shows that children have better outcomes when they have quality, consistent, positive relationships with adults, including their early educators. When early educators are under fewer financial stressors and pressures, they are better able to educate and nurture the children in their care. Assuming that higher compensation from the Pay Equity Fund leads to less turnover and reduced educator stress, then the children in their care receive the benefits. 

With compensation increases poised to boost the supply of early educators in DC, child development facilities are more likely to be able to avoid the disruptions in care that follow from workforce shortages and educator turnover. Early data show that the Pay Equity Fund has already increased the size of the early educator workforce by 3%. For working parents, an increased supply of child care means fewer work disruptions due to unreliable child care. 

Risks of Not Fully Funding the Pay Equity Fund

If the Council fails to reverse the Mayor’s misguided elimination of the Pay Equity Fund, it will jeopardize the stability and viability of the child care system in DC. Cutting this funding will put tremendous pressure on the sector, most likely resulting in educators leaving the field, early learning programs being forced to close down, and stranding families without high-quality, reliable care for their children. With current demand for infant and toddler child care already exceeding supply by 59%, the District cannot afford to lose any early learning programs or early childhood educators. 

For full-time early educators earning the median wage, initial Pay Equity Fund payments increased their compensation by 40%. Imagine, for example, you are an early educator, who before the Pay Equity Fund program earned the minimum wage, or around $35,000 annually. With the Pay Equity Fund, you now earn over $50,000. This meaningful compensation increase enabled many teachers to pursue further education; save; and cover expenses such as rent, food, and child care for their own children. In no other sector, in no other situation, would a professional be promised–and awarded–a well-earned raise, only to have it taken away just two years later. The Council must fully restore all funding for the Pay Equity Fund – otherwise, we risk early educators leaving the field in pursuit of a career with fair compensation and more stability. 

Furthermore, if the Council makes the choice to follow in the Mayor’s footsteps and defund the Pay Equity Fund, promises that the DC government made to prioritize pay parity and support the early educator workforce would be broken, eroding trust in the government and undermining confidence in our early childhood system. When DC leaders fail to uphold commitments to support essential services, such as early childhood education, it harms young families and children. 

FY2025 Pay Equity Fund Budget Ask

In addressing concerns over the growing costs of the Pay Equity Fund, it is crucial to recognize that the mayor’s descriptions of the fund as  “unmitigated” and “unsustainable” are inaccurate. Instead of punishing early educators for the rise in the program’s costs, all of which were expected and demonstrate that the Pay Equity Fund is already fulfilling its intended purpose, we should acknowledge that this growth is a result of increased participation from child care programs, increased degree and credential attainment by early educators, and intentional steps towards true pay parity with DCPS teachers. 

To keep up with these known growing costs and to keep the promise of the Pay Equity Fund, OSSE will need all carry over funds, and the District must make plans to raise revenue. Based on the first 2.5 years of implementation of the Pay Equity Fund, DCFPI estimates that the total projected cost for the program for FY25 will be $84.8 million, which is more than the currently allocated amount for FY25 ($70.5 million). At the very least, we urge the Council to prioritize FY25 funding the Pay Equity Fund at $70.5 million. 

This landmark program has bettered the lives of thousands of early educators and the thousands of children, families, and communities in their care. It cannot withstand any cuts to its budget. Choosing to make the Pay Equity Fund program whole will allow you to keep your promise and bolster your commitment to a more equitable Washington, DC. In a challenging budget year, it is unacceptable to balance the budget on the backs of the Black and brown women who are the workforce behind the workforce. 

Child Care Subsidy Program

Impact of the Child Care Subsidy Program

Many families with young children in the District rely on child care so that they can go to work or school, knowing that their children are developing and growing in a safe, nurturing, and positive early learning and care environment. High-quality early education supports children’s cognitive, physical, social, and emotional development. Yet, the cost of child care is out of reach for too many DC families. According to OSSE’s 2023 Cost of Care report, the average cost of center-based infant care for one child in DC is $2,123 per month. At this rate, child care costs for just one child make up more than 20% of the median income ($108,492) of families with children in the District. For context, according to the U.S. Department of Health and Human Services, child care is considered affordable when it represents less than 7% of a family’s income. To be able to afford child care, according to this definition, a family with an infant or a toddler would have to make $364,000 or $334,729 a year, respectively. This is where the Child Care Subsidy program comes into play. 

The Child Care Subsidy program in DC depends on federal and local funds to help families with very low incomes afford child care by covering the full cost of their child care fees. Families with moderate and low incomes make a co-payment that does not exceed 5.5% of their income based on a sliding income scale. The subsidy program, via OSSE, then makes payments to child care providers to cover part of the difference between the family’s contribution and the cost of running an early learning program through a daily reimbursement rate designated by the District. 

Eligibility and Participation in the Child Care Subsidy Program

District families with children under age 13, whose income is below 300% of the federal poverty line (approximately $74,000 per year for a family of three), are eligible for the Child Care Subsidy program if a parent is working or in school. In FY23, 4,720 infants and toddlers in DC benefited from the Child Care Subsidy program and 267 or 60% of all child development homes and centers participated. This does not mean, however, that 60% of all child care seats accept subsidies, as some participating programs have very few subsidy-eligible seats and others have a majority subsidy-eligible seats.

There is great potential for the Child Care Subsidy program to increase access to affordable, high-quality early learning opportunities for thousands of DC children, but to do so it requires full funding. This critical program serves as the lifeline for thousands of DC families and any funding cuts will likely result in fewer families with access to child care for their children. 

Risks of Not Fully Funding the Child Care Subsidy Program

The Child Care Subsidy program supports the well-being and development of infants and toddlers, while promoting economic stability for their parents. If the Council does not fully fund the Child Care Subsidy program, there are a number of risks that would negatively impact the early care and education system in the District. First, reducing funding for the Child Care Subsidy program would likely result in fewer families being served. For many families with low incomes, the subsidy program is their only option for accessing high-quality child care. Cutting funding would force many families to make a choice between continuing to work or pursue their education and their child’s participation in a child care program, placing them at an increased risk of financial instability. 

Furthermore, reduced funding for the Child Care Subsidy program could lead to lower reimbursement rates for child care providers who receive child care assistance through the program. If subsidy reimbursement rates are too low, early learning programs will not be able to participate in the program and cover their costs, leading to lower quality education and care, and fewer choices for families paying for child care with a subsidy. It is important to note that subsidy reimbursement rates are already lower than the cost of care for child care centers serving infants and toddlers across all quality rating levels. Cutting funding will only exacerbate the shortage of affordable child care options in the District, increasing stressors and pressures on a currently underfunded system. 

FY2025 Budget Ask for the Child Care Subsidy Program

We urge you to prioritize fully funding the Child Care Subsidy Program at $89 million in local funds ($64.7 million at OSSE and $24.3 million from TANF via DHS). Given the current state of child care affordability in DC, the District budget should be increasing, not decreasing, funding for the Child Care Subsidy program to ensure that more families are able to participate and to increase reimbursement rates to make participating providers whole. The same goes for the Pay Equity Fund. In a moment where early educators are earning higher degrees and compensation for DCPS teachers is rising, the discussion should be focused on boosting funding for the Pay Equity Fund. I encourage the Council to finalize a budget that moves the early childhood system forward, and does not force families and early educators to take steps backward. 

Thank you for the opportunity to share about the dire importance of fully funding our early childhood education system, including the Pay Equity Fund and the Child Care Subsidy program. I am happy to answer any questions.