South Dakota House passes bill establishing child care assistance for daycare workers
South Dakota's House of Representatives voted on Wednesday to advance House Bill 1132B to establish child care assistance for daycare workers.
HB 1132B passed with seven "yes" votes and six "no" votes during last Thursday's House Health and Human Services Committee hearing and on Wednesday, passed 39-31 during the House of Representatives hearing. The bill is primarily sponsored by Minority Leader Rep. Erin Healy, D-Sioux Falls, and Sen. Tim Reed, R-Brookings.
Healy stated during Thursday's Democratic Legislative Leadership weekly news conference that this is the first time in at least a decade a child care bill has passed in both the committee and on the floor.
Securing quality child care in South Dakota remains a challenge for many families due to high costs, limited availability and workforce shortages. Existing child care laws and assistance programs aim to support parents, but gaps in eligibility and funding often leave families struggling to find affordable options, with more than 70% of children under age 5 having working parents.
In 2023, South Dakota launched a child care task force in response, of which both Healy and Reed are members. A report was released in January, composed of national and statewide data to evaluate the strengths as well as gaps in the state's child care services.
The findings and suggested actions in the report complete the first phase of addressing child care in South Dakota. It examines barriers to child care access and affordability, recommending strategies to address the child care shortage and improving outcomes for children, families, employers and the state.
More: Task force releases first look at the state of child care in South Dakota
What the task force found is that South Dakota's current child care model is not sustainable, causing many providers to struggle and even close, Reed stated in January.
Another aspect is affordability, according to Healy during last Thursday's committee hearing. She stated that child care costs in South Dakota range from $7,000 to $14,000 per year, putting it out of reach for many low-income families.
More: 'We're in a crisis,' childcare leaders warn as options remain unaffordable for many
Thirdly, low child care employee wages total an average of $12.67 per hour, but the living wage for one adult with no children is $19.58 per hour. Because of this, child care facilities operate under capacity 'because they can't find the workforce,' Healy said.
'So how is somebody who is making that wage supposed to afford child care? These people are taking care of our children, but they can't even afford to have their children taken care of,' Healy said last Thursday.
When that happens, Healy said, child care workers leave the industry.
House Bill 1132B aims to be one of the many moving parts in addressing child care in South Dakota, by allowing 'the workers behind the workers' or those who are employed at early child care centers to be eligible for child care assistance.
This would be done by raising the federal poverty line for child care eligibility from 209% to 300% to ensure child care employees working at least 30 hours per week are able to receive child care assistance.
Healy explained that this would be 'a recruitment and retention tool' to incentivize people to work in child care centers.
Reed emphasized during last Thursday's committee hearing that HB 1132B would help ensure working families had access to affordable child care and allow businesses the workforce needed to thrive in South Dakota.
'House Bill 1132 is a crucial step towards addressing the child care workforce shortage, expanding access to quality child care by reducing financial barriers for child care workers and encouraging businesses and philanthropic organizations to invest in child care solutions,' Reed said.
CEO of the Economic Development Professional Association of South Dakota Michael Bockorny, who is also a lobbyist for the Aberdeen Development Corporation, Aberdeen Area Chamber of Commerce, Webster Development Corporation and the South Dakota Association for the Education of Young Children, mirrored these statements, relaying that the bill would help child care facilities 'fill the void' in the workforce and open up more space for children of working parents.
Healy mentioned during Wednesday's House hearing that the Department of Social Services (DSS) completed a study that revealed nearly 40% of South Dakota child care providers are not at full enrollment due to the workforce shortage.
'That's what we are hearing over and over and over again,' Healy said. 'So why don't they have the workforce? Because child care workers are underpaid.'
RiAnna Kalovsky, a stay-at-home parent from Ethan, shared her experience of leaving the workforce due to the high cost of child care during last Thursday's committee hearing. With a background in education and child care, including work with special needs individuals, Kalovsky was earning $34,000 annually as a child care site supervisor. However, when her employer — who was also her child care provider — raised rates by 10%, her family's child care expenses would have exceeded $27,000 in 2023, which forced her to leave her position.
'If House Bill 1132 had been in place two years ago, I would still be participating in the workforce, my family would still have the employee-sponsored benefit program, I would be paying into Social Security, my children would be part of a high-quality child care community and I would be setting my sights on continued, gainful career opportunities,' Kalovsky stated.
Michael Quast, CEO of the Aberdeen Family YMCA, which serves 535 children daily and 8,000 people annually, relayed last Thursday how in the past 15 months, three employees, including a longtime staff member, left after having children because staying employed was financially unfeasible.
'As stated, South Dakota has one of the largest households where both parents work in the workforce,' Quast said. 'This [HB 1132B] is designed to have parents who want to stay in the workforce, stay in the workforce.'
President and Chief Lobbyist with the South Dakota Chamber of Commerce & Industry David Owen said last Thursday there is a common misconception about child care after his board analyzed the issue for three years.
'There is a myth among the business community that child care organizations are poorly organized, and if they could just get their act together, they'd survive,' Owen stated.
Healy pointed out that the state of Kentucky passed a bill similar to HB 1132B offering child care assistance to child care workers. This ultimately cost less than expected, as many child care workers were already eligible but unaware of the assistance available.
'And what that bill did in Kentucky was it opened a lot of providers' eyes to understanding that child care assistance was available,' Healy stated.
Others who shared their support of HB 1132B during last Thursday's committee hearing included representatives from the Brookings Economic Development Corporation in the Brookings Area Chamber, Elevate Rapid City, South Dakota Advocacy Network for Women and the Greater Sioux Falls Chamber of Commerce.
Deputy Secretary and Chief of Operations Brenda Tidball-Zeltinger voiced how DSS acknowledges the importance of child care for workforce participation during last Thursday's committee hearing, but objects to expanding the state-run child care assistance program without dedicated funding.
'The program is intended to be a safety net for low-income families to support their ability to work or go to school,' said Tidball-Zeltinger.
She said the current 209% South Dakota federal poverty level for child care assistance equals about $67,000 per year for a family of four and $44,000 for a family of two. If the federal poverty line is raised to 300%, a family of four can earn up to $93,000 per year and $61,000 per year for a family of two.
The South Dakota Legislature funds the state's child care assistance program each year through DSS, Tidball-Zeltinger relayed. Part of the funding comes from a federal block grant, but that grant is capped. To receive federal funds, the state must also contribute matching funds from its own budget.
Tidball-Zeltinger said that last year the program helped about 1,700 families.
Healy argued that HB 1132B would not require expanding the child care assistance program, stating that there is currently a low to no waitlist for child care assistance.
'DSS doesn't have to increase their budget,' Healy said. 'We can widen the pool.'
It might mean, she continued, that some parents may be put on a waitlist or it could also lower the federal poverty line for other individuals, giving less child care assistance to others if the bill passes. However, none of that would be relevant if there weren't enough workers to open more child care slots.
Majority Whip Rep. Leslie Heinemann, R-Flandreau, voiced concern that if the bill passes, families already receiving assistance may receive less, or, according to Tidball-Zeltinger, potentially be added to a waitlist, something DSS has not had to do yet.
Rep. John Hughes, R-Sioux Falls, stated Wednesday that HB 1132B would 'create winners and losers' by giving special treatment to child care workers and not other areas such as health care, education and service industries, all of which are also experiencing workforce shortages.
Sen. Steve Kolbeck, R-Brandon, voiced the same argument, that recruiting and retaining staff is an issue in every industry currently, stating that HB 1132B is callous and 'an explicit effort' to repurpose a program to create a government subsidy to a particular employee group.
More: Are government subsidies the solution to the child care crisis in South Dakota?
Hughes also expressed that the bill would be the wrong approach and instead, the state should request or require companies to provide child care benefits for employees.
'What we need is public, private partnerships,' Hughes said. 'I don't know why we don't expect the largest employers and the wealthiest corporations in our state to address child care. That's real workforce.'
Rep. Tim Goodwin, R-Rapid City, rebutted that requiring companies to have child care is not 'Americanism' but 'socialism.'
'When a person goes to work someplace, they know what the benefit packages they take or not,' Goodwin said. 'But this government does not have a right to require somebody to provide child care.'
HB 1132B had its first reading in the Senate Thursday and was referred to the Senate Health and Human Services Committee. Then the amendment moves to the Senate hearing for a vote, which has yet to be scheduled.
If HB 1132B is amended in the Senate Committee and passes, the Senate will then take up the bill and go to a joint conference committee to negotiate the changes.
If the amendment passes in the Senate, it is then sent to the governor to review and sign or veto.
This article originally appeared on Sioux Falls Argus Leader: South Dakota House passes child care assistance for daycare workers
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