Testimony of Audrey Kasselman, Senior Policy Analyst, before the Office of the State Superintendent of Education (OSSE)

Good morning, 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 Ward 1 resident. I am a senior policy analyst at DC Action and with 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 urgent need for strong and sustained funding for the early childhood education system, specifically the child care subsidy program and the Pay Equity Fund. I will also discuss the proposed Pay Equity Fund permanent legislation. Thank you Mr. Chairman, and all the Councilmembers who have expressed their support to protect critical early childhood education funding.

The Child Care Subsidy Program 

Background on the Child Care Subsidy Program

The child care subsidy program is a cornerstone of DC’s early childhood infrastructure. It currently helps nearly 6,800 families afford child care, supports children’s healthy development, and enables parents to work or attend school. The child care subsidy program serves families earning under 300% of the federal poverty level (about $90,000 for a family of four) who otherwise would be unlikely to be able to afford high-quality early childhood education. 

Despite its importance, families have historically faced significant barriers to accessing subsidies. Through the surveys and focus groups we have conducted over the past few months, parents have shared stories of complex application processes, long wait times, and unclear communication. At the same time, parents who managed to navigate the application process shared stories of the ways in which the child care subsidy program has changed their life for the better – allowing them to work, attend school, provide their child’s basic needs, start businesses, take care of their mental health, and more. 

We are grateful to OSSE for taking steps to address many of these challenges. The changes the agency made, in partnership with the Department of Human Services (DHS) in October 2024 to the subsidy policy manual have already made a difference and the District has seen a substantial increase in participation in the program. According to Mayor Bowser’s earlier statement on the FY26 ECE budget, 6,796 children (including infants/toddlers, preschoolers, and school-aged children) were enrolled in the subsidy program as of March 2025. This represents an enrollment increase of 1,029 children in just six (6) months from October 2024 – 18% growth. We are pleased to see this enrollment increase, which means that the program is serving more eligible families and ensuring that more children have access to affordable, high-quality child care and critical early learning foundations while their parents go to work or school. 

Without the child care subsidy program, access to high-quality early learning would be out of reach for thousands of DC families with low and moderate incomes. On average, District families with a median income allocate 26% of their earnings to child care costs. For families with low incomes, this percentage climbs to over 32%, placing a substantial economic strain on these households.  In this context, child care assistance remains a necessary investment even in a constrained budget to ensure children can access high-quality early learning programs during their most critical developmental years, and so parents can go to work or school while they do so.

Furthermore, a recent Under 3 DC report finds that a lack of access to affordable child care leads to $252 million in lost wages for DC parents, $79 million in lost productivity and turnover costs for DC employers, and $64 million in lost tax revenue for the District. Early care and learning are economic anchors and drivers for our city yet funding for the child care subsidy program has gone in the wrong direction with significant reductions (over $20 million) over the past two years.

Funding for the Child Care Subsidy Program

Thanks to the success of the program itself and recent policy changes, the Council must now ensure that funding for the child care subsidy program keeps pace with the growth in enrollment. According to our current understanding of the Mayor’s budget proposal, the FY26 budget includes $86 million in total funding for the child care subsidy program. This includes $52.1 million in local funds and $10 million in federal funds for a total of $62.1 million at OSSE and $24 million in funds at DHS. Our initial read of the budget proposal is that the $86 million in funds represents a $10 million cut to the program compared to FY25 levels. 

Our analysis of the Mayor’s FY26 budget proposal indicates that total programmatic funding for the child care subsidy program is woefully insufficient to meet the current needs of the program or the families it serves. The child care subsidy program cannot sustain any cuts to its budget for two key reasons:

1. Enrollment is growing significantly – an increase of 1,029 children (18% increase) between October 2024 and March 2025. 
2. The District is federally required to continue providing subsidies to all families currently enrolled. 

For context, in FY24 the subsidy budget was $107.5 million  to serve 5,767 children. The FY25 budget allocates just $96.3 million, already creating a $9.2 million shortfall to maintain the previous caseload. The FY26 proposal appears to provide only $86 million, even as the number of children enrolled in the program has risen to 6,796. The child care subsidy program cannot be underfunded and the program urgently needs and deserves enhancements. It is clear that at least $20 million in additional funding is needed just to meet demand – and likely more to ensure the program can keep pace with growth and deliver on its promise to District families. 

Looking Ahead:

As budget deliberations continue, we ask you to: 

1. Protect all $62.1 million in child care subsidy funds at OSSE in FY26 and the out-years

The child care subsidy funding at OSSE is critical to the program’s overall budget and ability to serve currently participating families. Given the recent increase in caseloads and the subsequent increase in costs to the program, every dollar is essential. Protecting this funding is not only the right thing to do for currently participating families, the District economy, and future generations, but it is also essential given the numerous federal protections in place that legally require the District government to continue to serve all families once they are enrolled in the program. 

2. Work with the Committee Human Services, OSSE, and the Bowser Administration to determine how much funding the child care subsidy program needs to maintain current caseloads 

As we continue to analyze the Mayor’s budget proposal and its implications for early childhood education and young families, we encourage the Committee of the Whole to ask OSSE agency officials, when they testify before your Committee, about: 

• How much funding the agency has spent in FY25 to date on administering the child care subsidy program;
  • Whether the agency has enough funding to administer the program through the end of FY25;
  • If the quarterly sum of subsidy payments have averaged more than $22 million since the start of FY25, how the agency can justify the FY26 proposed budget is sufficient; 
• How much funding the agency needs to continue serving all currently enrolled families; 
• What the average monthly uptick in subsidy enrollment has been since the agency instituted policy manual changes;
• How the agency plans to manage growing child care subsidy caseloads with current funding levels;
  • How much it costs, on average, to provide a child care subsidy for each child on the caseload 
• How much funding the agency believes they need to implement the program without implementing a waitlist for families; 
• Whether the agency believes it needs more staff to manage growing caseloads;
• The breakdown of ages of children enrolled in subsidy;
  • Age group(s) that have seen the greatest growth in the past 6 months;
  • Number of children OSSE estimates will transition out of the subsidy program on account of age (i.e. a rising 3-year old now eligible who will be enrolled in DCPS PreK come October 1, or a rising 6 year old who will soon be attending school full time such that the family may no longer need subsidy support for full or partial day child care); 
  • How child care subsidy program attrition compares to birthrate trends in determining projected enrollment for FY26;
• How the agency is scenario planning for potential federal threats to federal child care subsidy (Child Care and Development Fund (CCDF)) funding; and
  • How the agency is partnering with the early childhood community to plan and brace for potential cuts to essential funding. 

All funding, including federal and local dollars at both OSSE and DHS, is essential to running the child care subsidy program and maintaining current caseloads. In the event that federal funds are reduced or eliminated, the District must be prepared to supplement that loss with local funds.

We also request that you work with the Committee on Human Services to ask the above questions of DHS and that your Committees work together to look across the four year spending plan to understand how much funding is necessary for the child care subsidy program in the out-years, assuming continued modest growth in enrollment. Asking these questions of all agency officials is a critical first step to preparing for the future.

3. Ensure that the child care subsidy program is adequately funded in FY26 and in the out-years, by adding at least $20 million in funds to maintain current and growing caseloads  

Based on our initial analysis, we are concerned that the currently proposed funding levels fall at least $20 million short of what is needed to maintain access for current families (which again is required under federal regulations), let alone to support future growth of the program. 

Limiting access to the subsidy program by underfunding it would create significant barriers for parents seeking work or education, limiting their economic mobility, increasing their reliance on public benefits, and negatively impacting early learning opportunities that are essential for a young child’s development. Only with adequate funding can we prevent these detrimental outcomes and keep affordable child care accessible for District families with low incomes.

The District of Columbia has not had a waitlist for families seeking to participate in the child care subsidy program in over 30 years. Implementing a waitlist due to lack of sufficient funding would be a devastating step backward – undermining decades of progress in expanding access to early childhood education. We cannot allow budget shortfalls to jeopardize the stability of families or compromise the educational and developmental needs of our youngest children. 

The Early Childhood Educator Pay Equity Fund

Background on the Pay Equity Fund

The Pay Equity Fund provides meaningful compensation increases for more than 4,000 early childhood educators in the District, more than half of whom (58%) are also District residents. The Fund also provides free or low-cost health insurance to almost 2,000 early education staff and their families through HealthCare4ChildCare. 

The Pay Equity Fund has been transformative for early educators, early learning programs, families, and the District economy. Research from Mathematica and the Urban Institute confirms what educators and providers have long known: when early educators are fairly compensated, recruitment, retention and educator well-being improve, more educators pursue and attain credentials, the workforce grows, and the quality of early learning programs rises – leading to better outcomes for children and greater stability for families. The Pay Equity Fund delivers strong returns on investment by reducing turnover and absenteeism, fostering a healthier and more financially secure workforce, and expanding access to child care through increased supply of early learning opportunities.

Specifically, since the Pay Equity Fund’s launch in 2022, higher pay for DC’s early educators – pay that is commensurate with their credentials  – has generated a 23% return on investment to the District, boosted the early educator workforce by 7%, and improved the quality rating of early learning programs by 30% according to OSSE oversight responses. Additionally, the Pay Equity Fund has incentivized hundreds of educators to pursue further formal academic training in early childhood education and has brought the District’s credential compliance rate up to over 80% for all roles.  Notably, the Pay Equity Fund has accomplished all this without passing on costs to parents. The Pay Equity Fund is one of the District’s most instantaneously impactful workforce investments and deserves the Council’s full investment to continue to meet its clearly stated workforce and early learning goals. 

The Pay Equity Fund is currently funded at $70 million for FY25, which allows the program to provide quarterly grants to more than 350 child development facilities across the District. Due to funding constraints in the District’s budget however, OSSE has recently had to implement a waitlist for any of the 100+ early learning programs that want to opt-in to the Pay Equity Fund and have not done so already. The early educators at these child care programs deserve fair pay and the children they care for deserve the benefits that come from well-compensated, high-quality educators. Ensuring that the Pay Equity Fund can reach all early learning providers requires additional recurring investments, which I discuss further below. 

Funding for the Pay Equity Fund

Earlier this year, Mayor Bowser promised full funding for a number of District early learning programs, including the Pay Equity Fund. After analyzing the Mayor’s budget proposal, it is clear that she did not keep her promise. While $70 million in proposed funding for the Pay Equity Fund for FY26 is a critical investment in the program, it is not enough to keep pace with workforce growth, recent credential attainment, and cost of living increases for early educators – all of which are signs that the program is in fact working and meeting its explicitly stated goals. Furthermore, according to OSSE’s quarterly spending data, the Pay Equity Fund is on track to cost $74 million in FY25, making $70 million in proposed funding an effective cut. 

To make matters worse, the Mayor is proposing to eliminate the Pay Equity Fund entirely in the out-years of the financial plan – FYs 27, 28, and 29. Eliminating funding for the Pay Equity Fund going forward is sure to drive early educators out of the field and to undo all of the progress we have made in increasing educator pay and access to high-quality, affordable child care for DC families.  

At this same time last year, I said the following in my testimony before this Committee: 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. It is devastating that we find ourselves back in this same situation, where educators have to fight for fair pay and where their hard earned salary increases are again on the chopping block due budget constraints. 

We now turn to the Council to make two key asks regarding the Pay Equity Fund. The educators who shape our children’s earliest years, and allow their parents to go to work and contribute to the economy, deserve compensation that reflects this value and we risk losing them to higher paying, more stable fields if we do not protect the Pay Equity Fund. 

• Add at least $10 million in additional funds to the FY26 level for the Pay Equity Fund to bring the budget to a total of at least $80 million.

Our request for a $10 million increase in funding for the Pay Equity Fund would allow for: 

• A slight increase in program participation (given the waitlist described above)
• A slight increase in credential attainment among participating educators 
  • Given the rates at which educators have pursued higher education opportunities since the Pay Equity Fund, we expect more educators to continue to hone their skills and need to ensure they are compensated for earning higher degrees as the program intends
    • Between April 2024 and April 2025 hundreds of educators have earned higher credentials, including educators who have newly earned their CDA credential after being removed from the Pay Equity Fund program due to funding constraints
• A 2% cost of living adjustment for participating early educators, who have unacceptably had their salaries frozen in place for the past two years
• Additional funds for HealthCare4ChildCare to continue providing high-quality health insurance to participating early educators, staff, and their families

It is also important to note that last year, at the direction of the Council, the Early Childhood Educator Equitable Compensation Task Force made a number of changes to the Pay Equity Fund program to make it more efficient and equitable. There is no more room to cut in the Fund without making devastating changes to reduce salaries or remove hardworking participating early educators. 

• Restore recurring funding for the Pay Equity Fund – we calculate the Fund will require at least $80 million annually. 

If funding for the Pay Equity Fund is not included in the out-years of the budget, it will destabilize the early education sector – forcing early educators out of the field and child care programs to close classrooms. This will significantly disrupt early care and learning opportunities for young children and working families by further reducing the limited supply of infant and toddler seats in the District. 

Funding for the Pay Equity Fund is not a problem that can be “worked out” in future budget cycles. The Pay Equity Fund is a workforce program, and like any workforce, early educators need stability, predictability, and respect. Delaying investment or treating compensation as negotiable year over year undermines the foundation of our entire early learning system. It is imperative that the Council not only protect and enhance the Fund in FY26, but also commit to fully funding it in the out-years. Anything less jeopardizes the progress we’ve made and signals to early educators that their essential work is not a priority. 

The Pay Equity Fund Pay Scales Amendment Act (B26-176)

The Early Childhood Educator Pay Scales Amendment Act of 2025 would permanently codify clarifications and legislatively streamline the Pay Equity Fund program, helping to stabilize compensation for early educators, while institutionalizing the recommendations of the Early Childhood Educator Equitable Compensation Task Force. 

Last year, due to budget constraints, the Task Force worked diligently to balance fiscal realities with the program’s goal – to provide fair, predictable, equitable salaries for early educators. The Task Force’s recommendations reflect a series of compromises to make the program more equitable and efficient amidst budget constraints. Those compromises included excluding over 500 early educators from the program, detaching compensation levels from the Washington Teachers’ Union salary schedule, no step increases based on years of experience, and reductions in funding to certain early learning programs. The recommendations also preserved fair salary levels for all lead and assistant teachers with CDAs through BAs, a necessary move to retain some of our most highly trained educators.

These changes were not made lightly and reflect a serious commitment of the early learning community to ensure the program remains sustainable and impactful. We are pleased to see these changes included in the permanent legislation.

Aside from codifying the Task Force recommendations, we support many elements of this legislation, especially those that:

• Codify fair pay for lead teachers with a Bachelor’s degree at $75,103, after the Budget Support Act last year (Fiscal Year 2025) was forced to reduce salaries for some of our most highly-qualified and credentialed teachers (beginning line 76)
  • Best practices in early childhood education call for a bachelor’s degree as the standard for educator preparation. Thanks to the Pay Equity Fund, DC has made important progress in working towards this standard. We will not reach our goals for children if we cut salaries and undermine the workforce 

• Codify a requirement for OSSE to issue guidance for child development facilities on compliance with Pay Equity Fund salary minimums (beginning line 78) 
  • Technical assistance guidance from the agency will be greatly appreciated by early learning program administrators, especially by new administrators given the helpful role the Pay Equity Fund plays in creating the economic conditions necessary to grow the District’s supply of child care
• Require the Chief Financial Officer (CFO) to submit to Council a quarterly expenditure report on the Pay Equity Fund. This provision brings vital transparency to the Fund and can help the District proactively avoid spending pressures that could necessitate harmful changes. Both OSSE and the CFO should be producing regular reports (quarterly, annually, etc) on the Fund, including HealthCare4ChildCare expenditures and cost pressures, and data and reports compiled should be made publicly available (beginning line 94) 
• Create an evergreen selection and succession framework for the Task Force (beginning line 218)
  • We are grateful this legislation recognizes that it is unrealistic for the same individuals to serve on the Task Force in perpetuity but that the structural composition of the Task Force should remain in place to ensure all facets of the early learning community are represented. Bill 26-176 should be clarified to ensure the “proportional” or “structural” membership of the Task Force is preserved

As the Council considers how to improve the Pay Equity Fund permanent legislation, we recommend the following: 

1. The law governing the Pay Equity Fund should be oriented toward long-term funding sufficiency and stability, rather than cost-containment.
   • An important way B26-176 can be structured to undo the harm of the Mayor’s proposed pay equity Budget Support Act subtitle and instead ensure the long term success of the Pay Equity Fund is by adding a paragraph  after line 107 of the introduced permanent pay scales legislation requiring the Fiscal Year 2026  funding level, and annually thereafter, be set at “funds sufficient to meet salary table requirements for all child development facilities and educators projected to be enrolled in the Pay Equity Fund program in the coming fiscal year, including funding necessary to operate the HealthCare4ChildCare program.” 
   • The bill’s current language (lines 107-108) has the potential impact of capping Pay Equity funding at $70 million annually when we know that amount is already insufficient as a base funding level.
2. Should the Pay Equity Fund face funding challenges, reductions to educator salary minimums should be the last option pursued by OSSE to alleviate spending pressures. 
   • The law currently allows OSSE to adjust the payroll formula or reduce the number of child development facilities eligible to receive PEF payments (prioritizing subsidy-accepting facilities to remain in the program). The Pay Scales Amendment Act would newly allow OSSE to revise the early educator salary tables set by law. While this may become a necessary option for the agency, it should be an option of last resort. 
   • To safeguard the longevity of fair pay for early educators who have worked so hard to obtain newly required credentials, the language in the Pay Scales Amendment Act should direct OSSE to only pursue salary table adjustments if no other solutions are available, and only after reconvening and consulting the Early Childhood Educator Equitable Compensation Task Force to ensure funding strategies are guided by equity and those in community with early education professionals.
3. Require the Task Force to reconvene prior to OSSE pursuing any spending pressure-induced revisions, and especially before pursuing changes to lead and assistant teacher minimum pay scales.
   • Reducing pay levels for early educators should be avoided as much as possible but if it becomes necessary, the early education community must have a seat at the table in decision making. 
   • The rulemaking process solicits retroactive input in decisions made behind closed-doors, the Task Force process leverages open meetings to solicit the proactive input of directly impacted educators, early learning program administrators, and subject matter experts.
4. Require the annual updates to the minimum salary tables to include cost of living adjustments. 
   • The Pay Equity Fund law already requires the Mayor to recommend annual updates to the early educator pay scales – once in February, and again with her annual budget submission. 
   • These annual updates were put in law to help ensure the Pay Equity Fund could maintain parity with DCPS educator salaries and by making explicit in a revised version of this bill that the Mayor should endeavor to factor in regular cost of living adjustments to updated salary tables we can fulfil that promise to early educators that their work is just as valued as any other education professional.
5. Require OSSE to provide the Council and the public with regular data on the Pay Equity Fund’s implementation progress, programmatic trends, and spending pressures. 
   • Better data and more transparency will help OSSE, the Council, and the public better understand how Pay Equity funding is being used, how it is making a difference in the District’s early learning ecosystem, emerging challenges or concerns, and if the District is achieving its desired goals around child care equity, quality, and supply. 
   • Bill 26-176 could require the Mayor and Office of the Chief Financial Officer to share data quarterly, biannually, or as part of the agency’s annual oversight responses.

Thank you for the opportunity to share about the importance of fully funding the child care subsidy program and the Pay Equity Fund in FY26 and the out-years of the budget. I am happy to answer any questions.