Vermont Legislature SmartTranscripts:

[Representative Emilie Kornheiser (Chair)]: Appreciate everyone coming back. So promptly, we are going to begin our work on pre kindergarten. Really, by the end of the session, we are ready to change the weight that is in statute. So Emilie Byrne, who we do not usually get the opportunity to have here in committee with us

[Emilie Byrne (Joint Fiscal Office analyst)]: Not as often.

[Representative Emilie Kornheiser (Chair)]: For some reason, decided that as a summer project, she wanted to take on this particular report, and I believe worked with a wide ranging team of other JFO staff to get this done. So I really, appreciate you coming in and telling us about the work that you've been

[Ezra (Joint Fiscal Office analyst)]: doing all summer on this.

[Emilie Byrne (Joint Fiscal Office analyst)]: Sure. Thank you for having me. And I should, like, I will just acknowledge up front, we are not finished with a report yet. Representative Kornheiser is right. We had, like, half of JFO trying to wrap their heads around a lot of this. This topic is complicated and involves lots of different specific programs across state government. And we ended up down every rabbit hole, and then got turned around and upside down, and had to figure out how to

[Ezra (Joint Fiscal Office analyst)]: Get back out.

[Emilie Byrne (Joint Fiscal Office analyst)]: Get back out. And we've been thinking about this. How are we going to present this information? A lot of the challenge this past fall has been, not only is it incredibly complicated to understand it, but then how do you communicate it in a way that doesn't take you all into the abyss that we found ourselves in over and over again. So, just as like, we're, hopefully by next week, we'll have the actual report. It's pretty much done. We're dotting I's crossed and T's, making sure that everything is accurate.

[Representative Emilie Kornheiser (Chair)]: And we have about forty five minutes for this testimony. That's less for you, Emilie, and more for everyone else around the table. And we're going to come right back to this topic when the report is done. And will you identify yourself for the record?

[Emilie Byrne (Joint Fiscal Office analyst)]: Oh, yes. Sorry. I'm Emilie Kornheiser from the Joint Office. And I have with me here, we have Ted Barnett from the Doykesville office that you all know, and Logan, or not Logan. I told Logan he didn't have to come today, but maybe we'll bring Logan another day. But Logan also helps with this, even though he's the transportation guy. And I think to your point of raising my hand to help you with this part of, and I'm sure you are all very much aware, part of what complicated this and getting this done was when you guys left, we had OBDBA from the federal government trying to figure out what those intakes were. And then they shut down. And there's just been a lot. A lot has happened that wasn't on our radar when we're like, yeah, this will be easy. We could totally do this over the summer. So things get complicated. And this is very complicated. So to that point, I would call this part one of this is going to be a longer conversation. What we'll go through today is really Which programs are outlined in the report? And then start going into part of the charge of JFO's report, which is look at the incentives within the existing system. It was a very academic exercise. So what's in the report is like, given that these things work this way, it's possible that some families may have to make the following choices. Now, we don't actually know. There's no specific data on whether or not those choices are being made by individual families. And to that end, what the magnitude of that is. And in conversations with other people that are closer to this, it is possible based on us group of analysts and economists thinking through how this is structured, that the following could happen. But those close to the program are like, I've never heard of that actually happening, but we wanted to call it out as potentially this could do it. But again, it's complicated. And I think it's important before we get into this to talk about, not JFO is not here to provide judgment or information on the success of the programs and what the outcomes are. Like, what's happening for kids, what's happening for families, what's happening for school, what's happening for childcare providers. I think that's information. As you have these conversations, as you're trying to figure out the weight, having DCF, the Agency of Education, Building Bright Futures in to talk about what this landscape looks like and where they see challenges and outcomes. So we're here to talk mechanics about the operation of the program. So with that, will share my screen. It's in house approach yesterday, it took me way longer than it should have to figure out how to share. It's been a while. But I think I can do it.

[Ezra (Joint Fiscal Office analyst)]: Things happen faster, apparently. Okay,

[Emilie Byrne (Joint Fiscal Office analyst)]: good. All right. You got me, you got Ted, Ezra, and we had Logan, who normally does transportation finance. I wanted to make sure he was busy this summer. So he helped dig into the head start component of this. He's not here today. He's got some transportation stuff to prepare for.

[Representative Emilie Kornheiser (Chair)]: If He's actually here with us at eleven

[Emilie Byrne (Joint Fiscal Office analyst)]: Yeah, exactly. I told him he could work on other stuff. But if there's head start specific questions, he became our internal expert. So yeah, Ezra, because he lives and breathes education fun. Ted has an interesting perspective. Ted was a business manager at a parent child center, so actually was on the ground helping to implement some of these programs. So people have that perspective. I think of myself as, well, I've got two kids that are actively using the system. So I have that sort of parent perspective, which is why you're like, bring a bunch of people in who will have both lived and whatever experience help us frame this. So one of the things that's complicated in this space is the terms and how they're used. So a lot of times we're going talk about the title of the testimony was pre kindergarten. And related to the education fund, it is universal pre kindergarten program and how you're gonna change the weights related to universal pre K specifically. But in that space, it's like an ecosystem, right? Things are interconnected. You have the childcare financial assistance program, you have Head Start, and there's preschool, which is not the same as pre kindergarten. Pre kindergarten is that they're a qualified program to provide certain educational standards versus preschool, who are three to four who are not in a pre kindergarten program. So there's a lot of these nuances. An early care and learning system is really all encompassing of that cohort of kids and how they're receiving support. So again, you've seen this a million times. This is our, like, we're nonpartisan fiscal analysis providing information and not necessarily policy recommendations. Part of the charge of our report was to provide considerations. We're not going to get that far today. That'll be in the report. We'll come back another day and talk about what considerations we came up with, which will not be all of the things you need to consider, but some things. So just to start off as a reminder, in Act 73, in the intent section related to pre kindergarten, this is what was in Act 73. And this is sort of the decision point for the general assembly as it relates to pre kindergarten education. So determining the appropriate weight for students, as well as enact changes to the publicly funded pre kindergarten program that ensure costs are borne by the appropriate funding source, depending on the age of the student and the pre kindergarten education provider. I will say what we found in these conversations is a lot of this depends on your perspective. But the framing appropriate funding stream, different groups think the appropriate funding stream is a different thing. And that partly made this challenging, because that's what's going to make your work hard. What does that mean, and how do we interpret that? So we'll leave it there. We can talk more about things that we heard and how that may impact your role. But just wanted to name that before we dive into the weeds a little more. So early care and learning programs in Vermont. So there are three major programs that we talk about specifically in our report related to early care and learning that support the youngest Vermonters. Head Start, which is a federal program. And we'll speak a little bit more specific about what each of these programs are. The Child Care Financial Assistance Program, which I'll refer to as CCFAT or CCFAP, depending on where my brain is at the moment while I'm walking through this. And then, Universal Pre K, also called UPK a lot. It's important to name that these are interconnected, and changes to one are likely going to impact the It's an ecosystem and there's going to be first order, second order, third order impacts if and when things start to shift in this system. Also, just should name These are not all of the programs that support the youngest Vermonters, right? There's children's integrated services. There's EEE, Early Education and Essential Education, for children who are identified as having a disability when they're younger. And parts of the IDEA, there's a whole special ed world that we did not get into related to this, where children's integrated services. Totally. I just wanted to name that. We got there, we're like, we like that. It's a whole other report, basically. So we'll start with Head Start. This is a program that state very much interacts with, but is a federal program and is governed by the federal government. Comprehensive early childhood development program designed to promote school readiness for children from lower income families. Serves children from birth to five, so not just this preschool population, but birth to five, as well as pregnant women and their families. One of the things that's important when we talk about this interconnectedness is Head Start requires a local non federal match in order to draw down federal funds. What we found is that in some instances, and I think frankly, a lot of instances, the Head Start programs are using both universal pre K funding. So the Head Start programs can become qualified UPK providers, and then they can earn those UPK dollars. They're using those UPK dollars and childcare financial assistance program funds. So these are lower income families. They're entitled to the subsidies. Those two pieces they're using in part as their match to draw down those federal funds. So depending on how UPK and or CCFAP shift as part of this conversation, there is a potential impact to matching funds at the Head Starts. I just want to name that. We don't have jurisdiction over Head Start. They're an important part of communities and an important part of the system, but that's an important entity. But I'm gonna spend a lot of time talking about Head Start. So then there's the Child Care Financial Assistance Program. So this was most recently discussed and amended in Act seventy six of twenty twenty three. This is a program that helps families afford childcare in the form of subsidy payments to childcare centers. And it's made to providers based on the family's income and the number of children in the family. There's sort of a cap on they CCD, what's your income, what's how many kids that you have, and says your out of pocket cost for childcare is this much based on your income and the number of kids that you have. It's important to note that this covers not just early education providers. This program covers children from infants, age zero to age 13. So it's your childcare from zero until you hit public school. And then when you're old enough for public school, it helps pay for summer camps and after school programs to supplement your public school day for parents that need coverage for the rest of the day. And no, if children are up to 17 that have a disability also qualify for Child Care Financial Assistance Program. So the Child Care Financial Assistance Program has a lot of state and federal funds that comprise the funding stack that provides these subsidies for families. It includes the Child Care and Development Block Grant, which is a federal fund to help provide these dollars to families. There's general funds, there's global commitment funds, there's the Child Care Contribution Special Fund, which was set up in Act 76. It's the payroll tax, goes into the special fund, helps pay for this. And then other special funds, not gonna get into the details about And then I've got EITC in parentheses. That's another whole presentation potentially, and we're working on an issue brief on it. But there is a mechanism where the state can use state TANF dollars to pay for the EITC. And then there's this net neutral swap that happens, and it helps increase the TANF dollars that the state can get by making this change. So it's a weird mechanical nuance that helps pay for childcare and also helps the TANF program. Gonna leave it at that, because that's about where my understanding is.

[Unidentified Committee Member]: Is it a question about going deeper into that? No, in future presentations, can we also look at the cannabis thoughts? Because I would assume they also are contributing to this after school.

[Emilie Byrne (Joint Fiscal Office analyst)]: So in the next one is universal pre k program. All districts, and this started back with Act 166. Forget, I can't remember the years, twenty thirteen ish, twenty fourteen ish. All districts are required to provide access to publicly funded education for a minimum of ten hours a week for thirty five weeks of the year. And I should To provide access, we need to be framed a little bit differently. So it's contingent on the parents finding a space, this is not unlike first grade, where if you show up and say, Hey, I'm a first grader, the school has provided for you. With universal pre K, the parent says, I've enrolled my child in a pre qualified program. I'd like to access the universal pre K dollars to help offset the costs of that, or to cover my ten hours. So there's a little bit of a nuance difference in terms of how this works. So some schools have programs in their public school and some don't. And we'll get into that in a little bit. But there is no In terms of the number of slots that the school has to provide, they don't have to provide Not every child has to The school does not guarantee a space in their building for every pre K kid. And I should say, and this is for three and four year olds.

[Unidentified Committee Member]: When you come back, can you give us information on the demographics of kids who enroll in private providers for UPK and public schools for UPK, particularly around students with disabilities? I don't know if that exists. This

[Representative Emilie Kornheiser (Chair)]: is a public service announcement and not very specific to that. But the last few days, there's been a lot of requests for very specific data or specific testimony. And I think it might help the other members of the committee if folks ask the question that they want to get answered with data rather than naming the data, because I think it brings everyone further into the same conversation. And I was just thinking about that last night, and so wanted to say it. Now I

[Unidentified Committee Member]: remember saying Would you like to explain my reasoning?

[Representative Emilie Kornheiser (Chair)]: Not right now, because we don't have that much notation. It's generally, yes. Okay. Does that make sense?

[Emilie Byrne (Joint Fiscal Office analyst)]: Okay. I

[Unidentified Committee Member]: figured she would explain it when the data

[Representative Emilie Kornheiser (Chair)]: came back. Yeah, yeah, absolutely.

[Emilie Byrne (Joint Fiscal Office analyst)]: I haven't acknowledged this yet, and I should. One of the challenges with this, and I think as a sort of potential outcome for what the General Assembly needs to do, is there are data gaps in this space. There is For example, if you've I think I say this later, but if you have talked to one school district about their universal pre K program, you know about exactly one universal pre K program. They are all over the map. No pun intended. The legislature said you have to provide access to people who can find a spot in a pre qualified program. You have to pay for those ten hours. And that's sort of where it ended. What local decision making happens at the school district level in terms of how to provide that access and whether or not to provide more is up to local decisioning. And there is no good information on what that looks like. We made phone calls. We've talked to districts. We've talked to the agency. We have some examples of what's going on, but it's really every school district is different in terms of how they provide this. And we know we have from long term weighted ADM, we have there are this many three year olds, there are this many four year olds. But the detail that's missing, that makes this complicated and is gonna make analysis hard, is like, okay, so of those 37 kids, how many are being served in the school building and are part of the local budget? And how many of them are receiving these payments to a private provider. That level of detail doesn't exist, and that complicates things. Because then you can't go into a school budget and bifurcate the like, okay, they're spending this much because they're operating a local program, and they're spending this much in payments to private providers. That complicates things. Just call that out. Do want me to keep going? Yes, please. Senator Ezra, do you mind if you can add? I'm just from the office.

[Ezra (Joint Fiscal Office analyst)]: Just to tack on to what Emily said about, would just also note that we don't know how widespread this is, we have heard from a few districts that if a student is not served at their program, they don't collect as much data as they do of the kids they serve. So yeah, that's why there could be other data holes is because the districts themselves aren't collecting some of that demographic information because students are being sent to a private provider. So that's another reason that we have this blind spot.

[Representative Emilie Kornheiser (Chair)]: And I'll just say that we're not actually talking about that many students and we should be able to get our hands around what is happening to these students. And we really only have twenty minutes, so I want Emilie's gonna come back, and we're gonna go really deep on this regularly. I'm sorry. Maybe we should have done a four hour segment for a short one, but I don't There's no way.

[Unidentified Committee Member]: Apologize don't talk to me. Way. I apologize if

[Representative Emilie Kornheiser (Chair)]: it's the hands of ignoring. Not to you, Emilie.

[Emilie Byrne (Joint Fiscal Office analyst)]: That's totally okay. I'll keep going. And there's a good spot we can break at if you guys are like, we're done. That's enough information or whatever. We can go till we go. And I'll know I'll be back. I'll to hang out with you way more. Anyway, so available to three, four, and five year olds not yet enrolled in kindergarten. This is the challenge you have with birthdays happen every day, and you take a point in time estimate. A five year old is not yet enrolled in kindergarten. So universal pre K can be provided in the qualified public or private program. If a district does not offer a pre K program or if a parent chooses to enroll in a different qualified program. So there is this rental choice where they want to send their kid versus in first grade. You live here, you go here. And the district must pay the statewide UPK tuition rate to the selected program. And that can also be a public program, not in your own district. The payment itself is part of the district education spending, and the public programs are part of the district's education spending. So it's in their local budgets, the tuition payments are in their budget, and the cost of the programs are in their budget. Yes, Rebecca? Just making sure I'm understanding.

[Representative Rebecca Holcombe (Member)]: For UPK, so a parent in Barrie is sending their four year old to Harlem for pre K just because, for sake of argument, so it's the Barrie School District is paying that tuition to wherever that program is located. Yes, to Harwood. And that works best reflected in the Berry budget. In Berry's budget, yep. Would be Yes. And if they are going to Harwood's public pre K program, it would be offsetting revenue for Harwood. Okay, thank you. And

[Representative Emilie Kornheiser (Chair)]: is it possible that Harwood would

[Emilie Byrne (Joint Fiscal Office analyst)]: be spending more than the revenue that they're receiving for the UPK? Yes. Right, and it's a fixed amount regardless of the demographic of the student. It's just this is how much the ten hours is paid. This is the statewide tuition rate.

[Unidentified Committee Member]: But if they were triple E, they would get that. Yes.

[Emilie Byrne (Joint Fiscal Office analyst)]: And that, I should say, there's always an asterisk, We accept the special education.

[Representative Emilie Kornheiser (Chair)]: So existing pre K weights, this is the decision point for you all. Under current law, in an Act 73, the pre K weight is negative 0.54. And to be So that was what passed, essentially, when UPK passed. When Act 127 passed and we updated all the weights, we said we are not prepared right now to update this weight. We don't have the data. And so we punted it into the future. Then we passed Act 73. We still did not have the data we needed to update the weight. We are here. We cannot continue on

[Emilie Byrne (Joint Fiscal Office analyst)]: like this. Okay, back to you. Yes. So what this means is that if a child's enrolled in a universal pre K program, either at a private provider or at a public school, So, where they attend, the district receives 0.46 in their long term weighted ADM for each participating child. Today, I'm not going to get into the ADM helps calculate tax capacity. And what does that mean in terms of the flow of dollars that we're not going to go there today? But that's part of the conversation is like, what does this mean? So, who pays for UPK? We talked about this. So, if the child's enrolled in the universal pre program in a public school, the cost operate the program as part of the district budget, it's treated like any other grade. And if they're enrolled in the universal pre K program at a qualified provider, the child's sending districts, pays the fixed amount for the ten hours a week for thirty five weeks. For the twenty twenty five-twenty twenty six full year, that tuition rate is almost $4,000 Can you just slow down? Just pause right

[Representative Emilie Kornheiser (Chair)]: here, Clint. So I don't want to rush through these basics. We sort of got off the weaves already, and I want to make sure we're all on the same page with the basics. Absolutely.

[Emilie Byrne (Joint Fiscal Office analyst)]: Do want me say anything else? Okay. We'll leave it at that for now. And just like Head Start, other programs can receive both PPK and Child Care Financial Assistance Program. The qualified program can receive both. So there's the sort of operating the universal pre K program, and then they receive subsidy for the ten hours. And then for any additional care they're providing, that's where CCFAP comes in to support the remaining costs of the childcare. So, there are school districts that operate full day programs that receive CCFAP. But I think some school districts have looked at, we do just like a private program, we're gonna do ten hours of pre K, and then we can have parents We can use CCFAP to help defer the costs on our local taxpayers of providing that program. That CCFAP going to the school district would be offsetting revenue to that school district. And yeah, so that's part of the calculation for public privates together. I'd say it right there. That would be deferred revenue. So just high level over how many kids are in this program. One thing to just disclaim, they're apples to apples, but they're like Honeycrisps and whatever. It's because of the timing of when data collection happens. We don't have a like, where is this six year old and what programs are they enrolled in today? Because ADM is calculated on October 1, and I don't know when CDD did their counts, or what data pull. We got their data from July. So it's not totally one for one, but it gives you the general picture. So Teddy's been working on a demographics issue brief. We've got estimates on how many kids by age group, three and four year olds. For the July estimates from The US census, there's about eleven thousand three and four year olds. UPK is three, four, and five year olds not enrolled in kindergarten. The census doesn't tell us how many five year olds are not enrolled in kindergarten, and I can't split that. So we're not going to. But generally, for UPK I should have said UPK at the moment. But as of October 1 census, there are 7,600 and 10 three, four, five year olds not yet enrolled in UPK, getting the

[Representative Emilie Kornheiser (Chair)]: ten hours. By census, mean and your second bullet point, by census, do you mean the count by the agency of education?

[Emilie Byrne (Joint Fiscal Office analyst)]: Or do you mean your Okay. Sorry, yeah. Census and price. That's my piece. Yes. Yes, I mean, AOE count that they do in the fall, they've got 7,600 kids in UPK. And it's more four year olds than five year olds. Then yeah, so it's about two thirds of the four year olds based on that census data are in UPK and almost 50% of three year olds in the state are enrolled. The number of preschool age children, 36 and through kindergarten enrollment, we talk about preschool age, is about 4,700 of them. So that's four out of five year olds. Yes, three, four and Three, four and five year olds. Three, four and five year olds not getting tenure. Yeah. So that's just for context. And I don't have the data point, but in conversations, Vermont has one of the highest enrollments in pre K programs in the country. That's And just an important thing to know, that there is good take up in the ten hour programs that we have.

[Unidentified Committee Member]: And just to be clear, how do we know how many unique children this is, as opposed to how many unique people in programs? Because we know some people are enrolled in both.

[Emilie Byrne (Joint Fiscal Office analyst)]: Yes, and so that's what we don't know who's enrolled and where the overlap is. CDD, so I'm going to go into the weeks.

[Representative Emilie Kornheiser (Chair)]: Don't stop there. Get into it another day.

[Emilie Byrne (Joint Fiscal Office analyst)]: CDD has some information. Can just keep up JFO thinks it's complicated. But anyway, there is overlap in these numbers.

[Representative Emilie Kornheiser (Chair)]: But you don't know the in middle of the Venn diagram yet.

[Emilie Byrne (Joint Fiscal Office analyst)]: There is Great. Nope. I'm going to not even go there. Have another day. There's so many days. So the report itself, so the report that you tasked JFO with doing, okay, had this first part, which is sort of what we just went through, like, what are the major programs in the early care and learning system? So that's sort the first section of our report is just what I walked you through. Here are head start, CCFAP, and universal pre K. The next part, and this is really what I referred to earlier as the academic exercise that JFO went through this year, is talk about the incentives. How are people interacting with this system? And what decisions are they making based on how these programs are structured? We framed this incentive conversation. This is my one time I got to be a graphic designer. I don't know if it's any good, but a win in my book, right? Can you show it to Grady? Maybe. It was buried in 30 pages of all this other stuff. But I think, in Emilie's weird economist brain, this makes sense to me. We've got kids, and you've got providers, and schools, and parents reacting to the incentives in the system. Ultimately, at the end of the day, there's kids in the middle of this. That's the only way I could find a cute thing. They had to hope balloons. That's how you know they're children. Love people. Anyway. It's structured on, we're going to talk about incentives for parents, schools, providers, how they interact. And we're only going to get into parents today, because they're not the easiest ones. But we're going to start with parents, and we're not going to talk about schools or providers today, because there's no way we have to.

[Representative Emilie Kornheiser (Chair)]: And I think that it's really important that we understand the different incentives right now in the existing system, because as we change the weight, incentives

[Emilie Byrne (Joint Fiscal Office analyst)]: in

[Representative Emilie Kornheiser (Chair)]: the system right now that we're probably not We did not create policy mindful of those incentives necessarily. And as we change weights, change policy, we wanna be mindful of how we are changing those incentives.

[Emilie Byrne (Joint Fiscal Office analyst)]: Yes. Yes. And I think it's important just to underscore that there are a lot of people accessing both of these programs. And I didn't say, I should have said this earlier. One of the things to also keep in mind around the CCFAP change, right? That went into effect last October, right? The expansion of the Or two October ago, excuse me. I forgot this October just happened. We are only like a year and a little bit into the expansions that happened in Act 76. There's no way of knowing whether or not to what extent that's mature. It's pretty early. People churn through the pre K. Kid's only pre K eligible for two years. So how that impacts families and how it's being rolled out is still happening, which makes it complicated. And I've got a bunch of disclaimers on this. I mentioned earlier, this is very much an academic exercise, a lot of this. We did our best to think about, based on conversations that we've had with people in the field, people with different agents, like different entities that are doing food studies. So what decisions might people be making based on we look mostly at financial stuff. There are lots of other reasons why people are making decisions about how and when to access this system. But we mostly looked at the financial pieces. And it's not a, because this, people definitely behave this way. People might behave this way. There's no data that says, People are definitely behaving this way because of this. It's very much a, People might be doing this because these things are in the system. Incentives are likely not exhaustive. There's probably circumstances we didn't consider. And I just want to call that out, but this is our best. Again, it was half the office trying to think through what decisions people are making in a complicated landscape. And there may I've said this a couple times, right? But there may be, through the academic exercise, oh, well, this could happen if I was this person in this scenario, blah, blah, blah. But we don't actually know if anybody's behaved that way. And some people are like we've had some folks look at drafts, are like, I've never heard of anybody ever having that problem. But it's possible, right? So we've brought it up in the report. And I think us economists, we talk about things happening at the margins. It's why there's always a conversation about the benefits cliff. It's when you approach that marginal space of the different That's where people are having to make decisions. And not everybody is at the margin. There are a lot of people who are like, Oh, yep, this program fits exactly my circumstances, and off to the races. It's really when you get into where they overlap or where very small changes may drive different behavior. And it's not unique to childcare. That's a public policy thing. I just want to call that out. I said this before, but there are a lot of Vermonters who are involved in utilizing the existing systems. And you all should bring in the people who are experts on what those outcomes are, and how they are using it. We're not experts on that. I'll just say that. So talking about parents, caregivers, families, the adults responsible for the children, There's a lot of things that a family has to think about when they're interacting with a system. And they've got to consider several factors in terms of what state programs they're going to utilize and how it's going to impact their own family financial situation. First and foremost, I think we all know families want to support their kids' development and learning, full stop. But when they're thinking about where to enroll, income comes into play when you're trying to decide whether or not to enroll in child care financial assistance. And what your out of pocket costs are going to be is driven by your income. And we'll talk a little bit about how families need to look at what the tuition is and what their family share is and what choices providers can make about having you pay the family share. But we'll get into that. There's also the tuition and the location of the childcare provider. Where are you able to find the prequalified space? And how does that work in terms of your own family needs and what you're going to access? Number of kids that they have, I think I touched on this. But the CCFAP out of pocket costs family share is blind to the number of children that you have. So they're sort of like, your income is x, your family share is y, regardless of how many kids you have in that program. The hours of care they qualify for in need, so CDD doesn't exercise with each family to determine how many hours that family needs for childcare. And then that drives whether or not you get a part time or a full time or an extended care certificate in the CCFAT program. Personal preferences, right? To the extent the pre kindergarten program gives parents some flexibility in terms of if they can find a spot in what program they want to enroll that meets the needs of their kid or their family, that's a choice for parents. So for CCFAP, if you're a family, families can, up to 575% of federal poverty, qualify for a state subsidy to help reduce the out of pocket costs of child care. Federal poverty level is different depending on the size of your family. I'll show just an example of that. So you can't just say that income is x. It depends on are there four people in the family or six people in the family. That moves. So as an example, as of 03/23/2025, which is the last time DCF posted the income guidelines, family of four at 575% of FPL has an annual income of $184,000 There's a link to those income guidelines if you want to look at it. And the family share at that level is $425 a week, which is $22,000 a year.

[Ezra (Joint Fiscal Office analyst)]: Family

[Emilie Byrne (Joint Fiscal Office analyst)]: of four, is that, so grandma lives in the household with grandma's income account? Let me get back to you on that one. Thinking about household versus family. Yes, no, for sure. This is just an example. This is what's on the DCF website. So you've got it for a family of three, four, five, and then six or more. And it shows you what the monthly income is. You can gross that up if you wanted to, how that equates to the federal property level and what the out of pocket cost would be for that family. And it's up to the next tier. So when you cross the income threshold, then your out of pocket cost increases to the next share. That makes sense. Okay, we keep going. So when a family is trying to decide whether or not to enroll in CCFAP, one of the calculations that they have to do is how does their family share compare to the tuition that that child care provider is asking

[Representative Emilie Kornheiser (Chair)]: for.

[Emilie Byrne (Joint Fiscal Office analyst)]: So if the family share if your family share is $375 per week, and the center charges less than $375 per week, then there's really no incentive to enroll in CCAP as a family. And we'll talk about why that's complicated for providers when we talk about providers. But we're not going to talk about providers today. So DCF's 2024 market rate survey put the median preschool tuition charged by the licensed providers around the state, dollars $3.25 per week, about almost $1,700 annually. That's lower than the state CCFAP rate, which is $439 per week for preschool. There's this difference in what they're charging out of pocket for tuition versus what the state is going to pay for enrollment. It's just important to note, and this is what further complicates this conversation. Providers are not required so I go to CDD. CDD says you qualify for full time childcare. They go to my provider. They say Emilie qualifies. Her family share should be $300 per week. The difference between the $439 and $300 is $139 We will pay you $139 per week for Emilie's kit. The provider has to come to me and say your family share based on the CDD calculation is $300 per week. But the providers have some discretion around how much of that family share they're actually going to collect from a family. Now, this is one where I'm going to look at Teddy Ezra, make sure I get this right, and probably have to reach out to people. I may have to correct myself. But I'm fairly certain that the guidance that they have from DCF is that you have to treat everybody the same month if you're going to reduce. Nope, I'm not sure. Now I've got go find out. If there's scholarship money, can scholarship money be used to help? So centers are working with families on what that is. But if there's no state requirement that if it's established, this is your family share, you absolutely have to pay that amount. There is some negotiation that can happen with the provider and the family.

[Unidentified Committee Member]: Can I just verify what's the denominator there? Is this across home cares and center based cares? Believe so.

[Emilie Byrne (Joint Fiscal Office analyst)]: Ted,

[Ted Barnett (Joint Fiscal Office analyst)]: go. You're asking about the state rate of $4.39. That is for, we should have been more precise, but it's for licensed centers.

[Emilie Byrne (Joint Fiscal Office analyst)]: Oh, yes. Yeah. Okay. I said this

[Unidentified Committee Member]: is center, we're looking at

[Ezra (Joint Fiscal Office analyst)]: center Center based based care is not based care.

[Emilie Byrne (Joint Fiscal Office analyst)]: Thank you for that question. The

[Representative Emilie Kornheiser (Chair)]: center based care, not home based care. Great.

[Emilie Byrne (Joint Fiscal Office analyst)]: Ted, is the 325 a blend of both? That was my second question. Or is the 325? I will follow-up. We'll double check that. We

[Representative Emilie Kornheiser (Chair)]: have two more minutes.

[Emilie Byrne (Joint Fiscal Office analyst)]: I'm almost done. Maybe. I think.

[Representative Emilie Kornheiser (Chair)]: Almost there. And I wouldn't be so rigid with the timing. We're just hosting a joint hearing. And so I think I get there.

[Emilie Byrne (Joint Fiscal Office analyst)]: I think I can get there. Okay, so there's the what are the I can't remember what I called it. Whatever I called it, CCFAP. There's also the sort of, as a family, thinking about hours you qualify for. So if you're going to enroll in CCFAP, DCF looks at your circumstances and family needs and determines Emily needs thirty two hours of child care based on what their family circumstances are or whatever. Or that's what you can get at your private provider. So CDD is determining how many hours you qualify for. And if you're between one and twenty five hours, you qualify for a part time certificate. Between twenty five and fifty is full time, and over 50 is extended here. The rate of reimbursement is tied to those providers is tied to that should be twenty five plus hours is tied to that, whether or you fall in part time, full time, extended care. There isn't a proration per hour. It is, are you in the part time bucket, or are you in the full time bucket? And the subsidy that you get, the subsidy that goes to their peer provider, is based on the number of eligible hours. One thing that's important in terms of these hour calculation, what CDD does if a family is enrolled in universal pre pay, which means the education fund is paying either sending $4,000 for lack of, to simplify things, to the private provider. DCF is saying, you qualify for thirty five hours, but because you're receiving UPK, the number of hours you qualify for purposes of calculating your child care financial assistance program is reduced by ten hours. So there is this sort of reduction. Now, if the family qualifies for forty and they're enrolled and they reduce to ten, the provider would still get the full time care because the CDD would determine you're at thirty hours. But if it's determined that you only need thirty four hours and you're enrolled in UPK, When CDD subtracts the ten, you now fall into the part time category. And that drives the amount of that subsidy that's going to your provider. But I think I say this in here. What can happen is that if that shift happens, the subsidy that family receives so I just said this, but here it is in writing. So it changes where you fall between those two things. Things. And again, this is happening at the margins. So not all families are falling into this. But there is this possibility that this is happening and making people make decisions. Do you want me to keep going? I'm gonna

[Representative Emilie Kornheiser (Chair)]: light finish the slide.

[Emilie Byrne (Joint Fiscal Office analyst)]: Okay. So depending on the program and what that is, if you fall below full time care, CCFAP is only going to pay a part time subsidy. That delta falls to the family to cover. So they'll get the UPK funds, work with the provider on how that pays. But if there is still a difference between the family share, the actual tuition charge, the family is responsible for that difference. As I said, programs have discretion over that, but it can complicate whether or not if you're at the I'll give the example. If you were to qualify for a zero out of pocket cost for your full time care as a family, and you enroll in UPK, and that drops you into part time care, but you're enrolled in a full time care slot, you have a zero family share. But if you have to make up a difference as a family, that's a not insignificant financial burden potentially for that family. So that family probably won't enroll in universal pre K so that they can maintain that full time subsidy. And so there's that calculation that potentially has to happen. The other piece of this is that the providers have some discretion on how they apply that UPK tuition to a family's tuition payment. So if a family pays out of pocket, the center so if you have a $20,000 tuition payment and you pay out of pocket, but you're enrolled in universal pre K, the center has to reduce your out of pocket tuition cost by the state's UPK payment. So there is a reduction in my out of pocket expenses. Depending on where your income is and how you qualify for CCFAB, the calculation that can then happen is my out of pocket cost, if I'm enrolled in CC FAT, may be higher than my out of pocket cost if I'm enrolled in UPK and I pay out of pocket. So families have to navigate the interaction between those two programs. What UBK effectively does is lower that threshold where enrolling in CCFAP potentially makes sense for a family. It's important to note that this is complicated by the fact that your family share for CCFAP is tied to the number of kids that you have. So if you're paying tuition for two kids, your family share is the same as if you're paying for one kid. Likely, the tuition for two children is probably more than your family share for both of if you're enrolled in CCFAP. So that's another just complicating One group of families is going have to make different decisions than other groups of families, in this case. And so this incentive structure only applies to a subgroup of families. And again, if the family doesn't enroll in CCFAP, the provider can there could be a negotiation between if you enroll and your family, your out of pocket costs to make you whole. So anyway, it's complicated, obviously. This is the weed thing we would get lost in.

[Representative Emilie Kornheiser (Chair)]: I think we need to Yes. Oh, perfect.

[Emilie Byrne (Joint Fiscal Office analyst)]: So we don't know how many people are actually making these decisions based on these incentives. There are a lot of implications for those to think about as we think about changing the weights and what that does to these families. But that's perfect. Thank you. And next time, we'll talk about incentives for school and private providers and the sort of considerations we have in our report and keep asking and answering questions. Yeah.

[Representative Emilie Kornheiser (Chair)]: Thank you so welcome.

[Emilie Byrne (Joint Fiscal Office analyst)]: Sorry to rush you. No. There's

[Unidentified Committee Member]: three other incentives for parents I think locally.

[Representative Emilie Kornheiser (Chair)]: And I spoke