Childcare is scarce and spendy. Here’s what Montana lawmakers are doing about it

Efforts by Montana legislators and Gov. Greg Gianforte to tackle Montana’s childcare shortage this year have produced several new laws, including measures that expand a program helping lower-income families pay for care and exempting small, in-home daycares from state licensing requirements.

The former measure, a $7-million-a-year expansion of the state’s Best Beginning’s program, had been a particular priority for Democrats and childcare advocates who had spent weeks waiting for word on whether Gianforte, a Republican, would sign the measure.

In a statement Wednesday, Gianforte’s office touted the expansion of the Best Beginnings program as part of his broader “pro-family, pro-jobs” budget.

Legislative Democrats had worried the Best Beginnings bill was becoming a political football as the governor sought to derail veto override efforts on other bills. In a statement Wednesday, they called the bill “the most significant investment in childcare in the state’s history.” 

“Ensuring Montana families have access to quality, affordable childcare means our economy can thrive — and so can our communities and kids,” bill sponsor Rep. Alice Buckley, D-Bozeman, said in the statement. “I am so proud we have finally taken action to address our state’s childcare crisis.” 

The Legislature passed the Best Beginnings bill, House Bill 648, April 28, but it was only transmitted to the governor for his signature this week after spending more than a month waiting on an administrative signature from Senate President Jason Ellsworth, R-Hamilton.

Childcare is both a major cost-of-living issue for Montana families and a significant economic challenge as the cost and availability of care limits how much many parents, women especially, can work at a time when the state is facing a tight labor market.

Research by the Montana Department of Labor & Industry estimates the state has licensed childcare capacity for only 43% of kids who need care. Labor department economists also say childcare for kids under 5 costs Montana families $16,269 on average in 2022 — a figure equivalent to a quarter of the state’s median household income and well above the 7%-of-income figure used as an affordability benchmark by the U.S. Department of Health and Human Services.

(The labor department’s economists estimate that need by tabulating the number of kids under age 6 who live in homes where both parents are employed or actively looking for a job. They note that many working parents likely default to unlicensed care.)

That shortage, labor department economists say, has a direct impact on the state’s workforce. They estimate family responsibilities or a lack of childcare kept 23,000 Montana parents from working last year and forced another 45,000 to work fewer hours.

Tori Sproles, who runs Child Care Connections, a Bozeman-based agency that works with parents and childcare providers, said in a recent interview that the conundrum is that childcare is both prohibitively expensive for many families and a high-overhead industry that fails to pay well enough for childcare business owners and their staff to readily make ends meet.

“The biggest hurdle is the affordability of it on both ends,” Sproles said.

The Best Beginnings bill makes the program available to slightly higher-income families, shifting its eligibility cutoff from 150% to 185% of the federal poverty line. At the 185% level, a family of four would qualify for the program at an income of $55,000 a year and a single parent with one child would qualify with an annual income of $36,000.

The bill caps how much participating families pay, limiting their childcare expenses to 9% of their income. It also shifts the program’s reimbursement policy so that payments are no longer tied to attendance requirements — a policy that proponents say can put parents and providers in a bind if kids have too many sick days. 

The governor’s budget office estimates HB 648 would add about 700 children to the program and increase its cost by about $7 million a year.

Other bills focused solely on regulatory pieces of the childcare puzzle without putting additional public dollars toward subsidies.

Most notably, Rep. Jennifer Carlson, R-Manhattan, sponsored House Bill 556, which exempts many small, in-home daycare operations from licensing administered by the Montana Department of Public Health and Human Services. Anyone caring for up to six kids in a private residence will no longer be required to seek a license unless they participate in Best Beginnings or other public subsidy programs.

The state’s existing regulations require licensing when someone is providing “supplemental parental care” to three or more kids, excluding their own children.

Carlson said recently that she thinks licensed daycare programs make sense in larger cities, particularly for families who don’t have a reliable network of family or friends to fall back on. But she argues it’s a different situation in small towns where people know their neighbors well enough to know who they trust looking after their kids and routinely flout the letter of the current rules.

“The government does not have to run every single part of our life,” Carlson said. “People have been watching other people’s children since the dawn of man.”

As the bill worked its way through the Legislature, opponents argued the state licensing process provides a way to ensure that people who are running childcare businesses are subject to requirements like background checks, home safety inspections and first-aid training.

Sproles, who testified against the bill, said in May that people who provide unregulated care have rarely been prosecuted. She also said she’s concerned that exempting more small providers from licensing could put parents in situations where they mistakenly assume a daycare provider has been vetted by the appropriate authorities.

“There are people out there who drop off their kids to people they don’t know — and nobody in that house is going to be background checked,” Sproles said. 

“Just because someone has a license isn’t a guarantee of safety,” countered Carlson, pointing to a 2022 audit that found the health department had in three cases approved childcare licenses at addresses also listed as the residence of someone on the state’s sexual and violent offender registry. “As a parent, it’s your responsibility to know who’s watching your kids, not the state’s.”

Another bill sponsored by Buckley, House Bill 187, explicitly defines providing home-based childcare as a “residential” use of property rather than a “commercial” one, a statutory tweak intended to shield small daycare providers from being constrained by restrictive homeowners association covenants. It passed with bipartisan support and was signed by the governor April 19.

Gianforte also approved a Republican-sponsored bill, brought by Rep. Terry Falk, R-Kalispell, to relax some currently required daycare center staffing ratios, allowing among other changes a 6-to-1 instead of a 4-to-1 provider-to-child ratio for 1-year-olds and a 20-to-1 rather than a 14-to-1 ratio for kids 6 and older. The new law, House Bill 422, also allows some staffers caring for kids 2 and older to work in another room during nap periods.

Falk argued the changes better align Montana law with national standards and will make it easier for childcare centers to pay workers sustainable wages. Opponents countered that they believe the lower ratios are necessary to keep kids safe and that loosening the regulations will make childcare workers more likely to burn out. The bill passed with support from all Republicans and opposition from nearly all Democrats.

Democrats brought several other bills, unsuccessfully, to put additional public dollars into childcare support. One bill would have created a $1,600-a-year tax credit to supplement childcare worker wages. Another would have put $150 million from the state’s budget surplus into a childcare trust fund, where interest earnings would have been used to produce a long-term revenue source for childcare scholarships.

Sproles said she was pleased with the conversation that happened around childcare at the Legislature but thinks more action will be necessary to address the challenge.

“We’re not done,” she said. “These are baby steps toward some of the bigger things we need to tackle as a state.”