Vermont Legislature SmartTranscripts:

[Speaker 0]: Here we are with Means working on pre K still. It's February 4, 10:40. And we are transitioning from the proposal that we looked at, or the random statutory language that we looked at, to see what are the fiscal impacts. Remember, the whole reason that we're doing this in this way is to make all the policy trade offs and any decision more tangible to us. Ted, thanks. So we have a whole bunch of testimony from Ted. We have a whole bunch of testimony from Emilie. We spend the whole time with Ted, Emilie comes back and says, Ted, that's Okay. But they've sort of divided the work on that. Just

[Ted (Joint Fiscal Office analyst)]: in case I'm here for a while, you might as well plug in. Tempernet, join fiscal office. Before I jump in, I should clarify that what I'm going to do is talk about fiscal impacts primarily at the parent and provider level. And so we're going to be talking a lot about intersections between the system imagined in the proposed language, how that would intersect with DCFAP, and how that impacts the amount of money parents receive per care, and how that impacts how much money providers receive for children for certain types of care. I will also note that different than the language, I was asked to look at what it would be if the payment to private providers was representative of full day care. And so this is different than the ten hours per week. I would also note that when I was in last time, we talked a bit about the landscape and how it looks under ten hours a week, and some of the examples will compare to current law, so that'll be implicit in the discussion if that works. Okay. Screen. Hopefully Okay. When I click things, it's agenda overview of proposed policy and where it is similar and where it departs in a lot of the assumptions and implicit in looking at certain scenarios. We are going to do some reviewing of CCFAP and UPK and how payments interact with each other. I'm going to run through example calculations for families and providers, and then talk through some outstanding questions. Certainly not all of them. Y'all are also noting them down. So some of them might be duplicative, some of them might be new. And so key elements we're looking at, right, four year olds are no longer receiving UPK funding. Four year olds and five year olds not enrolled in kindergarten would receive, in this case, a full day payment, which in this analysis, the amount is going to be similar to the foundation formula for kindergarten. I had to make a slight change so it was round numbers and we did a deal in cents because we don't want to do that. This would be paid for from the childcare contribution special fund. Providers that offer more than the legal minimums can participate in CPFAP. So this is similar to the current education system. A public school offers a certain amount per day. They often have a private provider come in and do after school and they're receiving CCFAP for those additional hours. So a private provider that is providing full day care would, for an amount beyond that full day care, receive a CCFAP payment if they provided those extra hours. Yes, flagging again that this is different than the language, which is outline a payment for ten hours a week for thirty five weeks to private providers.

[Unidentified Committee Member]: Just curious why the exclusion of three year olds, was that like a financial

[Ted (Joint Fiscal Office analyst)]: The language and modeling a response on the proposal that is no one's, but seems to be an exercise for us to consider and see how different policy choices impact the system. Yep.

[Unidentified Committee Member]: I don't feel like that answered the question. I guess no one's proposal, but what is the logic behind the no one who is proposing?

[Speaker 0]: I think when I've heard other people talk about this, the idea was that if it's moving to a much longer day for four year olds, so it's a much higher financial Yep. Support than Thank you. It was also like, if once we get it, there's developmental birth to three and four to eight, developmental stages and like That's not fair. Thank you. But that's not I feel like I can argue in absolutely any direction on like every detail of this entire proposal.

[Unidentified Committee Member]: Yeah. Was just trying to understand why that proposal was supposed. Suppose.

[Rep. Rebecca Holcombe (Member)]: Oh, I

[Ted (Joint Fiscal Office analyst)]: love a proposal. It's not a proposal. Okay. And to flag the scenarios we're gonna run through before we review elements of the system. So we have four, two for families, two for providers. So for the family, one scenario is that they pay market rate, they don't participate in CCPAB. And the second one is that they have a $225 estimated weekly family share. This is close, essentially the middle, Estimated weekly family share runs from $0 to $425 So, I just kind of hit right in the middle to give an example of how it might I will, of course, note there's an asterisk here for scenarios, dollars 25 and an estimated family share doesn't represent comprehensively what a family's experience if they're in CCFAB would be under the proposed system. This is just one run of an example to see how the math plays out.

[Unidentified Committee Member]: Do you know, I mean, you're taking kind of the midpoint. Do you know in actuality that the people participating in CCFab now what the family share is on average? Or this is a hypothetical scenario, but I'm just thinking about how it reflects current practice. Sure.

[Ted (Joint Fiscal Office analyst)]: That's a good question. So broadly speaking, when I looked last night, if we're looking at December 2025 data, there's about 11,600 children involved, which I don't Let me follow-up in an email to provide the exact numbers. I don't want folks to write things down, and I'm remembering things in a few state last night. But 11,600 children in CCFAP, about a third of thirty three percent of those have a $0 family share. And then it scales, you'll see it scales from there with each $25 increment. There are more people, as you are closer in each $25 scale, to $0 than as you go up the income scale to higher family shares. So I don't remember the exact amount. It's a couple 100 in each bucket as you move up, and that amount in each bucket decreases as you go up the scale, if that's helpful. Yeah, yeah. Thank you. So the two scenarios for providers. I will note, I didn't run the scenarios of $0 family share for families, right, because they don't pay any money. It wouldn't make sense to run that as a scenario. But I did run that as a And that should be 100% CCFAP. So two scenarios, one is all families pay the market rate at this specific provider, and then the second one is all family receive 100% CCFAP. I did not provide a CCFAP scenario for providers because, as I mentioned, the range of people involved in CCFAP, their different family shares and their different amounts and didn't want to This is like we're taking the two edge cases or not edge cases. Both these scenarios reflect if there are a lot of families who are paying market rate, there are lot of families with $0 family shares, so we're covering a pretty broad swap, but just the opposite ends of how providers receive revenue.

[Unidentified Committee Member]: A little confusing. You got 100 with a dollar sign for CC FAT.

[Ted (Joint Fiscal Office analyst)]: It should be 100%. I'm sorry. Thank you. That is my apologies on that one. Yeah, I see.

[Speaker 0]: It's just a typo. Forgive me.

[Unidentified Committee Member]: Yeah, it's

[Ted (Joint Fiscal Office analyst)]: just a typo. This next part, flagging that there is an endless number of assumptions baked into these scenarios. I almost feel like I should read this like the end of a drug ad, where I just go really quickly and there are all these side effects. That's very good. Yeah. So we're assuming one big assumption here is that by making this thinking through the exercise, by receiving a full day payment for universal pre K. In many contexts, universal pre K is thought of as an education program, so these students would This is making four and five year olds resemble kindergarteners, and so for CFAP calculations for the balance of their time, they would be considered school age. It's the policy choice, flagging that. So if you were to consider changes in the system, those out of the education time, should it be compensated at the schooling rate or preschool rate? Policy choice.

[Rep. Rebecca Holcombe (Member)]: So just to clarify, if we're using equal opportunity payment as the base rate, I know there's been tremendous work in the rural care sector to professionalize the professionals Is working in that the assumption then that every prekindergartner in a private setting would also be having access to qualified teachers and all the education supports that are implied by the rate?

[Ted (Joint Fiscal Office analyst)]: That would be the assumption, right? Because it's in I will look to Katie because the pre qualified private provider refers to the existing pre K statute, they would have the same requirements. Yes.

[Rep. Rebecca Holcombe (Member)]: And when we provide, wait, for economic disadvantage, is the assumption that the private provider will now be providing the kinds of programs that a public school district would be expected to provide for a kid who's economically disadvantaged in that setting, if they're being compensated. Is that a policy question for Katie? Well, it's just a question. I'm just trying to under Yeah. I mean, well, I don't think it's Katie's because it's not Katie's policy. I'm just trying

[Speaker 0]: to understand what we're proposing here. No one's proposing anything. You are naming that that is a very important question that we need to solve, and we all want to solve it. We probably have a particular way you would want to solve. Okay.

[Unidentified Committee Member]: But just wait and follow the comment.

[Rep. Rebecca Holcombe (Member)]: But also what are the implications for program design? We have, there's only one side. It actually relates to the foundation plan too.

[Ted (Joint Fiscal Office analyst)]: Would

[Speaker 0]: you like to speak both?

[Katie (Legislative Counsel)]: If only you would like

[Unidentified Committee Member]: me to speak

[Speaker 0]: I know, say so. I just didn't see

[Rep. Rebecca Holcombe (Member)]: you because of Ed's. I'll wear brighter colors. I

[Katie (Legislative Counsel)]: wasn't fully paying attention, I'm sorry. So if I'm missing that,

[Rep. Rebecca Holcombe (Member)]: I apologize and I'll just be quiet.

[Katie (Legislative Counsel)]: The proposal that you have on the table with the concept of weights, base plus weights, is only applicable to tuition paid to public providers, not private providers.

[Rep. Rebecca Holcombe (Member)]: That's not the question I was The question I was asking is we are assuming funding off of the CFAP Act 6076 subsidies, which pegs the cost of universal pre K in a private provider as the same as equal opportunity payment. So we're assuming now that the base, I think that's what this says here. And so we're assuming that a child who is eligible for free and reduced lunch, is a four year old in a private provider, is going to be accompanied by $30,000 for example.

[Katie (Legislative Counsel)]: I will say that's an assumption that is not in the draft. The draft has AOE and DCF rule making to set tuition for private providers.

[Rep. Rebecca Holcombe (Member)]: What does I would interpret this then, I don't know.

[Ted (Joint Fiscal Office analyst)]: So maybe it would be This is saying that the statewide rate that is determined by AOE and DCF is And you all have made the policy choice that that payment should reflect a full day program, we're using as a placeholder the amount that's similar to the base payment in the public school setting, the foundation formula amount. It doesn't reflect any sort of adjustment for weights, English language learners, any of the other associated payments that would have changed things in the public school setting. And that's a consideration for y'all if you wanted to make different base payments based on those characteristics.

[Speaker 0]: But you need an assumption to go forward with.

[Rep. Rebecca Holcombe (Member)]: Yeah, I'm just trying to understand what the assumptions are.

[Ted (Joint Fiscal Office analyst)]: Assumptions here is that care occurs in licensed centers. The vast majority of pre qualified private providers are licensed centers as opposed to family childcare homes. So reflecting that component of the system. And as we've been doing in previous testimony, using in all of these examples, the family have one child in care. You'll remember that in CCFAP, the amount a family pays is based on the family, so each successive child doesn't change the family share. So this, assuming one child, just helps clarify the situation.

[Rep. Rebecca Holcombe (Member)]: I think I'm too confused. It says scenarios. Is this one scenario that you're talking about or this is what? There's a difference between the first bullet all families pay a market rate and a family share. All families pay a market rate and families receive 100% of CCPAT.

[Ted (Joint Fiscal Office analyst)]: So this is saying within the asterisk, we're noting that certain assumptions that apply to each individual scenario. Yes, so there are multiple scenarios. We have certain assumptions that apply globally to these different scenarios, and felt I would call them out upfront before we dove into them. But maybe they will illuminate as we get into the scenarios.

[Rep. Rebecca Holcombe (Member)]: Thank you. I'm still confused. Okay. Question I think would be helpful to put up is how do we evaluate the market rate when we're increasing subsidies? I mean, there's something we've learned from the ACA, it's that when you flush money into a market, you're going to see growing inflation in the sector.

[Speaker 0]: I think that is also something that computing services space spent quite a

[Ted (Joint Fiscal Office analyst)]: bit of time on. Two years? At some point. 2023. So yes, we've used a few terms already, but just as a reminder, and the discussion of market rate is a good segue into this definition, the market rate is the amount per week that childcare providers charge a family for care. That amount in the 2024 DCF market rate study is at licensed centers is $325 per week for preschool. The state rate is the total amount that is reimbursed under CCPAP. And so there is a state rate for each age of care, infant, toddler, preschool, school age, and whether the care is full or part time or extended care, and whether the care is at licensed centers or family childcare homes. And so the CCFAP state rate is comprised of two payments. One is the estimated family share. So this is the amount calculated by CDD that's based on household income and the number of children in the family. CDD looks at those criteria and says, Okay, we estimate that you can afford a certain amount for care. And so providers can ask you to collect up to that amount of what you can afford for that care. And so these family shares scale. Families get 100% of their care covered by CCAP and they scale by $25 all the way up to $425 per week. And then the CCFAB subsidy payment is made by CDD to the provider, and it's the difference between the total state rate and the estimated weekly family share. So that balance that state says, that is the amount of financial assistance you will receive, and it's paid by the state to the childcare provider.

[Unidentified Committee Member]: The first one is paid to the family, not to the check. The

[Ted (Joint Fiscal Office analyst)]: first one the family pays to the provider, yep.

[Unidentified Committee Member]: Yes.

[Ted (Joint Fiscal Office analyst)]: I'm sorry.

[Rep. Rebecca Holcombe (Member)]: Oh, the family share.

[Ted (Joint Fiscal Office analyst)]: The family share is paid by

[Speaker 0]: the Oh, the bullet point.

[Ted (Joint Fiscal Office analyst)]: Oh, sorry. The market rate is what the Are you talking about the total Say that. Who gets the Who gets what money? Yes. So of the total state rate, you could I It's helpful to think of it as two payments, the family share, families provide it to providers. The CCFAP subsidy, the state pays that to providers. And so the provider, ideally, if they're collecting the full family share, is receiving that total state rate on those two different sources. And so here is the rate table. As I mentioned, there are differences depending on age, length of care, care setting, and so provided that as reference. These are the current state rates. And then finally, we have the EPK payment, universal pre K payment. This is for ten hours a week for thirty five weeks, and it is set at almost $4,000 for the current school year. And the amount is adjusted for inflation each year. So moving on to family scenarios. We have two scenarios. One, the family pays the market rate. I'll start with that one. The asterisk here is carrying over the same caveats and assumptions I've already talked about. So I will move ahead unless there are questions. In this first scenario, we're going to look at what the family pays under current law. In this example, we talked a little bit very briefly about blended versus separated models for how providers allocate their UPK hours. This is a blended program. What that means is they don't distinguish their UPK hours. And so what that essentially means is that in the market rate context, the UPK payment applies to the family share. And so the family, they are paying the market rate of $325 The UPK payment reduces that market rate for families. So the family balance is $211 And so for thirty five weeks of the school year, they're paying almost $7,400 for care. During the summer, for seventeen weeks, they're not receiving a UPK payment. They're paying the provider market rate. So that's $5,500 And so in total, the family's paying nearly $13,000 for care for that child, the market rate to the provider. We just use the sample market rate in different corners of the state. Families are gonna be paying different market rates. This is also for full time care, so yes. So in the new system, the family is paying $0 for full time care through their universal pre K payment. We ran two separate conditions within the scenario, looking at whether the family chooses to enroll in some sort of after school or aftercare program, reflecting that if it's a full day payment or a full day program, providers may offer a calendar similar to schools. And so, know, school day ends at 02:30, 03:00, some version of that. And so families may require extra care. And so looking at the cost with after school versus not without after school, they're not paying anything during the school year, but they are paying for some part time after school care, and this is reflective of the market rate. And so in the new system, without after school, they're paying $5,500 per year. And then with after school, they're paying 11,007 and $55 And so in both of these cases, it's less than the current law system, which makes sense. They're receiving a full day universal pre K program through the school year. I am leaving that open because there's currently not a full day program amount of hours specified beyond right now it's currently set at ten in law. So that would be a policy consideration for y'all is what constitutes a full day program if you were to move forward.

[Rep. Rebecca Holcombe (Member)]: I wonder, it might help, but this is the full cost to a family.

[Unidentified Committee Member]: Correct. But

[Rep. Rebecca Holcombe (Member)]: this is not the full cost of the program. I wonder if this makes sense. Well, I think

[Speaker 0]: we're going through, I think the report that you all wrote sort of went through, like, what's the perspective of the family, the district, the provider, and so that's what presentations are gonna be doing.

[Ted (Joint Fiscal Office analyst)]: Yes, and right of business, since it is?

[Speaker 0]: And I asked, you actually specifically asked me what order I thought it made sense to do the presentation in. And I said the family provider, school system, state, because that was the order of smallest to biggest. Yes.

[Ted (Joint Fiscal Office analyst)]: And I think this exercise highlights what we'll see in future slides, bit of foreshadowing, is that in the system, because there's so many interlocking funding streams, that even if you're providing what feels like an expanded benefit, it doesn't always make it cheaper for families. And so that depends on a variety of different characteristics and it's helpful to see those tradeoffs and how policy proposals play out in the system and then potentially go at a broader level to look at overall fiscal impacts. So, since we're now moving into the world of CCFAP, the previous scenario was looking only at the market rate. This slide is just reminding everyone that, as we've discussed before, there are different amounts of funding per child that providers receive and families receive from CCFAP, depending on program structure, family demographics, including how the program accounts for their hours, the setting of care, whether it's a full or part time CCFAP certificate, the number of kids in the family. So we've held a certain number of these steady for the nature of the exercise, but did one of flags. Is just one possible permutation in the system. And so I hinted at the blended and separated model. In the blended model, childcare providers, they're combining their childcare and UPK hours until a single unified rate, where the separated model, they're saying that UPK hours are separate and our tuition is for those non UPK hours. This is up to the provider. CED has released a memo outlining how families are supposed to apply those payments depending on the model of program they choose, but they must apply the chosen model consistently to all families. I also wanted to introduce the concept we've been talking about CCFAP in the early care context. CCFAP does also apply to school aged children. Here are the rates. These are the rates we use for modeling within CCFAP. In this exercise, we're assuming that because there's a full day program, providers and families were receiving part time rates during the school year and full time during the summer program. A lot of this is just outlining some of the assumptions and providing more context.

[Speaker 0]: So does everyone notice the sort of construct here, which I think maybe it's confusing, maybe it's not. I don't know. Maybe everyone's following. So after school is considered a CCPAP program. Does everyone catch that? And so Can you use the words after school in a way that helps it make

[Ted (Joint Fiscal Office analyst)]: Sure.

[Speaker 0]: Or because I feel like calling it I think if you just think of it in the context of early care and education, this might be more confusing.

[Ted (Joint Fiscal Office analyst)]: Sure, yeah. And after school, thinking about it, yes. The full day program ends at 02:30, 03:00, and then you have after school until the end of the working day. Absolutely.

[Rep. Rebecca Holcombe (Member)]: I think that there's a lot of assumptions about after school, and I think there was a regulatory change that said school based after school had to be regulated as a childcare. If it wanted to receive CPAP, many school districts have become regulated, dual regulation to support that. Some have also realized that if you just reopen their municipal programs, they can provide it at a much lower cost. I just think that's a really, It's not just food. It's also food. It's a bunch of other stuff.

[Speaker 0]: Yes. And I'm saying in the context Agree that it is more Thank you. In the context of sort of what Ted put up here, I just wanted to make sure people understood that it was sort of the division between the school day and the after school day in terms of how the money was moving there in that scenario.

[Rep. Rebecca Holcombe (Member)]: But we don't know what that provider is, right? So that could be a provider. If it was a public school provider, they could be needing a 21 seat.

[Speaker 0]: Except in this scenario, it's a private provider scenario. We're only in a private provider scenario. We're gonna go into a public provider scenario with Emily Byrd. Ted is so for the characters at the table

[Ted (Joint Fiscal Office analyst)]: Got it.

[Speaker 0]: Ted is gonna be doing private provider and families, and Emilie or Julia are going to be doing public provider and cost to the state, Ed Fund, etcetera. Is that right?

[Ted (Joint Fiscal Office analyst)]: Yes, and I'd be thrilled to not have to answer questions about public schools.

[Rep. Rebecca Holcombe (Member)]: Okay. I would just comment that when you frame it that way, the implications of public programs are about families.

[Unidentified Committee Member]: Yes. When

[Ted (Joint Fiscal Office analyst)]: we're talking about families in this presentation, this is like, since I am the character representative of the private system, this would be for families who are, exactly, participating and their child is enrolled at a pre qualified private program. Okay, so all of that out of the way. Remember that in scenario one, family that was paying the market rate saw benefit from this new system. In family scenario number two, the family has a $225 per week family share. The center is using the blended model. We're doing this for We're gonna run through the blended model and the separated model just for extra fun. And so in current law, these calculations may be familiar. The estimated family share is $225 per week. I'm gonna hold the hand right next to where I'm talking about. There's a UPK payment of $114 per week, and so the family pays the balance during the school year between their estimated weekly family share and the UPK payment, and so that balance is $111 per week. And if you multiply that by thirty five weeks, you get $3,885 During the school year, that UPK payment goes away, it's not available to them, and so they're paying $225 per week for seventy five weeks, and that's $3,825 And so their annual cost for the whole year is $7,710 That's under current law. And so we're gonna move now on to what it might look like in the new system, the proposal. Oh, sorry, we're gonna go to the separated model first. I apologize. In the separated model, the tuition is accounted for separately, and so that UPK payment, you can think of it going directly to the provider. This is a choice that is made by providers. It depends on the market and how they wish to operate. And so since the family does not see that UPK payment, their annual cost is $11,700 per year. This is the most straightforward table in the whole presentation. And I will note that the consideration is that for a provider, if they choose to go to a separated model, the families aren't receiving their UK family share and so that may not be attracted to families and they may not wish to enroll in the program. So if you're thinking, oh yeah, why wouldn't a provider just use the separated model? They have to look at their market. So again, looking at the new system, we're looking at fostering the school year, fostering the summer, and with and without after school care. I can abridge the calculations if you'd like to talk at a broader level or if the committee would like me to continue to go through line by line in each one. I don't know at this point what would be most helpful?

[Speaker 0]: What feels useful to both? Are we ready for line by line, or are we still on a bigger picture? Is anyone wanting to go line by line right now? Seeing none. Okay, great.

[Ted (Joint Fiscal Office analyst)]: During the school year, either the family is paying $0 because they're not receiving after school care. And part of why I pause is I have to keep moving the Zoom window out of the way. Without after school, they're paying $0 With after school, they're paying the provider's market rate because their family share of $225 is more than what the provider is charging as a market rate. So they would just pay the market rate rather than going for the CCPAB system and paying more for their after school care. We talked a little bit about these cases for families where their family share is above market rates, and so that makes their decision of how they participate in each system. So they're paying $6,230 for after school care. And when you add the $3,825 during the summer, the family that is without after school care is paying $3,825 and with afterschool, they're paying a little more than $10,000 So in these scenarios, what I would like to do is compare quickly, and I didn't, I'm gonna have to go back and forth on slides. I intentionally kept these ending calculations separate because I didn't want folks to jump to conclusions to say this new system is better or worse overall. I want to say in these specific scenarios, this is what they would pay and these are the outcomes. It's a little more work between slides, but I don't want folks to extrapolate. So in the current law model for families that are attending at a blended program, dollars 7,700 is a paying. Separated model is $11,700 And so you can see that a family without after school in every case, the new system is better for them. But if they're participating in after school care because of the interactions between the system, are paying families in a blended program, who are paying that $7,700 would, if they wish to participate in after school care, would pay more. But families in the separated model see a slight reduction in their care. System is quite complicated. And so To summarize, our impacts depend on the individual characteristics of the family. Again, these are just examples. It's just one potential run of how families might interact with the system and how the new system might benefit or make care more expensive. And families would react accordingly. For families in the blended system, if they were looking at after school costing potentially more money for them, they might find alternative sources of care. Incentives matter. Yes, and would note that there are, depending on some characteristics of families, cost of care over the entire year may be higher than under the current system. So even though you've provided a full day UPK payment, because of the interactions with CCFAB, they're not costing more. Moving on to providers, unless there are any questions. I will note, hopefully, is that since you've seen the math for families, providers are receiving payments from families. So hopefully this will a lot of the math will seem familiar and less confusing. Same asterisk and caveat on our scenarios, but we're gonna look at two scenarios for providers. In one case, all of their families are paying the market rate. And then the second one, all families are receiving 100% of their care covered by CCVAP. So at the market rate, I lied. There's a tie for the least complicated calculation in the slides. So under current law, family that's at market rate for the full year, they are receiving $325 from the family. So this is assuming the blended model where the UPK payment is reducing the family share. So between the UPK payment or the family's payment, the combination of the UPK payment and what the family's paying during the thirty five weeks of the school year adds up to $325 So they're receiving $325 for the entire year. This would be slightly different under the separated model. So under the new system, they are receiving, So I would like to flag So the weekly payment. So if we take the current foundation formula amount, dollars 15,033, and convert it into a weekly payment, I rounded the numbers so we didn't have to deal with cents because that would be ferociously annoying. And so that equals $430 You'll remember that the state CCFAP rep for preschool is $439 So just would like to note that with advances in the CCFAP reimbursement rate, it's similar to what the foundation formula is envisioned to be. So per for kid, and all of these calculations are per child, we're not looking at the classroom level quite yet, that might be for another time, the revenue they receive without after school care is $15,050 If they're also running an afterschool program, they would receive $6.00 $8 per week per child, which with afterschool, that in total equals $21,280 during the school year. Since they're not receiving this weekly payment during the summer, they just receive the market rate during that time. And so this table shows those calculations. Without after school, they're receiving $20,000 per kid for the full year, and with after school, they're receiving $26,805 in the new system. And so that's considerably more money for the providers compared to the current system. You will see So now we're going run through CCFAP. I'm not going to go line by line.

[Speaker 0]: Something you're not getting into here, I'm realizing, is that that same provider might be receiving a different amount of money for their three year olds since we're taking three year olds out of UPK.

[Ted (Joint Fiscal Office analyst)]: Yes. And so the question is, does the provider have multiple classrooms? Would you treat three year olds as toddlers? How would you manage that whole transition for providers? Do they have multiple classrooms where they can split them into a universal pre K classroom versus a preschool classroom? Yes. Yeah. So for provider number two, if they're receiving 100% CCFAB, so remember that for providers that receive 100% CCFAP, they received the state rate of $439 under the current law system. They receive an additional $114 for UPK. And so they receive $533 during the school year per child per week. And then in the summer, they just received the state rate. And so converting that to annual revenue, it's $26,818 In the new system, I ran separate calculations for with and without after school. I, depending on the number of hours that are required, in many cases, providers would have the incentive to operate the equivalent of an after school program. So if, let's say, the number of classroom hours is twenty twenty seven hours for the full day program as a private provider, to get that delta between, let's say, they run a forty hour program, they would want to have the equivalent of an after school program for these students. And so if they do have an after school program, they're receiving $634 per kid. And so during the school year, that's $22,190 during the summer. They are just receiving the school aged payment because we've converted these kids to school aged children, and so that's a little bit more than $6,300. And so with and without after school, you'll see without after school, it's $21,357 per kid, and with after school, it's $28,497 per kid. And so compared to the current system, where the provider who has enrolled the child who receives 100% CCFAB, with after school it's more money, but without an after school program, they would receive less revenue because of the way payments stack, if you can check. And we are out of scenarios, which we made it. This is just some additional questions. There have been a lot of Hopefully this exercise has helped illuminate some of the complications considering this type of proposal. We discussed a bit about how would you deal with three year olds who are no longer part of the universal pre K system in this proposal? A lot of secondary questions in that bucket. Yes, and so to represent a Holcombe's point, would private providers receive differing compensation for different groups of students if they're economically disadvantaged, English language learners, etcetera. And then if folks may How would If this is envisioned to be administered through CDD, how would those differentiating characteristics be recognized? And then how would the payments be administered? Full set of questions there. Yes, and then there are school age programs, if they're regulated as a school age program, have slightly different licensing regulations than early care programs, and so how would you manage that tension? But those are just some questions that I thought of when I was going through her. There are certainly more. Questions?

[Unidentified Committee Member]: Where am I? How many children are being served by UPK now?

[Ted (Joint Fiscal Office analyst)]: By UPK now, it's approximately, there have been a lot of discussions and it's depending on whether you're considering enrollment versus ADM. There's a whole math that the public school and Emilie, I think, has the slides. As far as I understand, the number is about 7,600 based on the most recent data. But Emilie Byrne

[Speaker 0]: Has that as part of her slide.

[Ted (Joint Fiscal Office analyst)]: Has that as part of her slides, and so we can go to that.

[Speaker 0]: She has not returned.

[Unidentified Committee Member]: Yes. Go ahead. Yes.

[Speaker 0]: I think appropriations aid her.

[Ted (Joint Fiscal Office analyst)]: Yes. And for additional context, approximately, Emilie will go into the center slides, but of that set, roughly 7,600 students, half of them are in the private system. How many children are there that are four years old? I'll have to get it. Emilie said it recently and it just came to my brain. Me too. Yeah.

[Unidentified Committee Member]: All seems unbelievably complicated.

[Ted (Joint Fiscal Office analyst)]: It is. Yes?

[Unidentified Committee Member]: Is there an easier way?

[Ted (Joint Fiscal Office analyst)]: I think one of the challenges I hope there may be a simpler way. I think one of the challenges it is incredibly complicated. It's incredibly complicated for me, and as you all know, I spend time working in the system. Hard for everyone. I have lot

[Unidentified Committee Member]: of confidence in you, and I appreciate all the work you did for this, but it is incredibly complicated.

[Ted (Joint Fiscal Office analyst)]: Yes, I agree 100% with that sentiment. And I think, yes, the challenges are that this system, you have combined funding streams and you have dual systems of oversight and they're very intertwined. So, anytime you pick one element of the system, it creates all of these unintended consequences in other parts of the system. So it resembles other conversations that y'all have had, for sure.

[Speaker 0]: I think there's a huge amount of how state government is administered is incredibly blended, confusing funding sources. Because families step into being one of the sources of that blended funding in this context, I think it makes it The confusion is more obvious to us. We In some ways, sort of like healthcare, right? There's the insurance, and then there's the patient, and then there's all of the ways that the state subsidizes or doesn't subsidize it, and there's how Medicaid fits in and Medicare fits in. Anyway, sorry, go ahead.

[Unidentified Committee Member]: You know, if I had a family member who had stage four cancer and I would sacrifice almost any amount to get them to live. And the same is true. It looked like we were up to 28,000 a child for this. I would sacrifice as a parent to do that if I thought the outcome that was gonna mean my child was successful for rest of the way through school. Do we have that data?

[Speaker 0]: I think that someone from the early childhood community can absolutely come in and share that data with us. And I think they did to some extent in testimony two weeks ago. Was that two weeks ago? Was it Janet? No.

[Ted (Joint Fiscal Office analyst)]: Morgan Crossman

[Speaker 0]: Morgan from Let's Grow Kids.

[Rep. Rebecca Holcombe (Member)]: No. Sorry. It's from Building Bright Futures. Sorry,

[Speaker 0]: Morgan. Can we

[Rep. Rebecca Holcombe (Member)]: chat that?

[Speaker 0]: Yeah. And it's actually part of our testimony from Morgan that Sarcia can resend I the

[Ted (Joint Fiscal Office analyst)]: also know that the, I think the report from the pre K implementation committee, their report also has some data on kindergarten readiness outcomes in the system. Yeah. So I can share that with Sorcha.

[Speaker 0]: And First Children's Finance just put out a pre K capacity study that we have not taken testimony on. That was not a statutorily required report.

[Ted (Joint Fiscal Office analyst)]: It was just something they did for them.

[Speaker 0]: That was more blithe than it should have

[Ted (Joint Fiscal Office analyst)]: been.

[Speaker 0]: Other questions for Teddy?

[Unidentified Committee Member]: The big one is the assumption of the full waiting for paying the private setting. And we really still don't have a handle on how much exactly pre K costs the public setting right now.

[Ted (Joint Fiscal Office analyst)]: Yes. I'm not going to make any promises. We've been doing work in our office and we've made some strides in understanding how much the private pre K or how much tuition payments are, how much spending there is on pre K. We have some of that data. Think parsing through how that intersects with triple E and etcetera and how that associates with individual students is more complicated. I don't want to promise too much yet, but we are working on it, and we will be able to provide you all with more information. Any

[Speaker 0]: other questions for Ted? Everyone is currently writing down their questions. We're gonna add them to a question list for our next round of testimony. Folks will read through. I think we're gonna stop for the morning now.

[Ted (Joint Fiscal Office analyst)]: Was a

[Speaker 0]: lot. It was a lot. Okay, cool. We're gonna stop for the morning. We'll schedule Emilie and to do sort of the next series of testimony on this. And then next week, we'll pick the statutory language up again, like really flag the pieces that we're gonna work on. So thank you.

[Ted (Joint Fiscal Office analyst)]: Of course. And if anyone, if you wanna sit down and digest and have other questions, feel free to reach out. And also, I think part of the exercise is when I got up to the end of it, it's like, yeah, this is hard and confusing and yeah. It's really hard to make it there.

[Speaker 0]: I had a kid who received subsidy for both early care and education and summer and after school care. And I worked for the child development division, and I

[Rep. Rebecca Holcombe (Member)]: worked for Building Black Futures,

[Speaker 0]: and I still find this incredibly confusing. Yes.

[Ted (Joint Fiscal Office analyst)]: So don't be afraid to reach out to SJFO. Yes.

[Rep. Rebecca Holcombe (Member)]: There is prior research on cost of pre kindergarten across districts. I think part of the challenge is we don't have clear measures of dosage. So even though they're getting the floor or whatever, some of them are providing full time K-four 100. And some of them have pre K coordinators and some don't. So we don't know. What we can tell is which region is spending more than that.

[Speaker 0]: Yeah, and some of what Emilie will eliminate when she testifies.

[Rep. Rebecca Holcombe (Member)]: I guess the question is, if we're going to do anything, we need to do a better job with baseline data collection. Agreed.

[Unidentified Committee Member]: Represent what's up. This isn't for Ted.

[Speaker 0]: You can get out of the chair if you'll.

[Unidentified Committee Member]: I'm not gonna launch.

[Ted (Joint Fiscal Office analyst)]: Last year when

[Unidentified Committee Member]: we were chatting with education transformation, we talked a lot about the uncertainty and the confusion that is our education funding system and our tax system, and part of Act 73 was an effort to simplify that to an extent, would love if we can carry that spirit of simplification forward as we're doing this. This is just frankly kind of ridiculous.

[Speaker 0]: I mean, most extreme version of it to me is I know families that drive their, that leave work to drive their youth from a pre K setting to an early care and education setting, like mid workday, which is sort of like the physical manifestation of the multiple funding streams.

[Rep. Rebecca Holcombe (Member)]: And it doesn't have to be that way. But there's lots of other more complicated pieces of it. And also dual bank regulations. When we collapse the accessible programming, that's, again, what I'd able to suggest. Okay,

[Speaker 0]: enjoy your digestion, both your lunches and all of the information we just consumed, and see you at 01:15. When we're going back to tax classification.