State leaders Tuesday unveiled a slew of proposed rule changes designed to continue fleshing out the state’s budding universal childcare program.
The New Mexico Early Childhood Education and Care Department’s proposals, many of which were designed to come into compliance with a cornerstone piece of legislation passed earlier this year, would impose budgeting requirements for childcare providers, call on them to report key pieces of information to help ensure workers are paid fairly and create guardrails for the economic future of the program.
“These proposed rules are intended to provide clear program structure, strengthen accountability, support stable access for families, and ensure that public investments support a strong child care sector and early childhood workforce,” department spokesperson Julia Sclafani wrote in an email. “… ECECD looks forward to hearing from families, early childhood educators, providers, advocates, and other partners directly affected by these proposed rules.”
However, some providers have raised concerns with the rule changes, highlighting a provision that would require them to spend at least 57% of the money funneled to them by the state to cover universal childcare on workers’ salaries and benefits.
“We support investing in the workforce, we support increasing compensation,” Barbara Tedrow, president of the New Mexico Early Childhood Association, said in an interview. “But instead of imposing that one-size-fits-all percentage, we believe that there should be flexibility in determining the staffing and operational structures that just meets the needs of that community, those children and those families and employees in that center.”
Wages, guardrails
Many of the proposals would implement requirements established in Senate Bill 241, legislation passed by lawmakers this year. In addition to providing up to $700 million from New Mexico’s early childhood trust fund over the next several years to pay for universal childcare, SB 241 also sets up other important components of the program.
For example, the bill and corresponding rule changes would lay a foundation for a wage and career ladder, a framework long pushed for by advocates that would allow workers to earn fairer pay based on their expertise and allow them to advance in their careers as they gained education credentials and experience.
Teresa Madrid, executive director of advocacy organization Partnership for Community Action, said proposed requirements for providers to report information about workers’ salaries, benefits, professional qualifications, roles and levels could help inform implementation of such a framework.
“What we are really looking forward to is ensuring that this technical tracking … of wages, benefits and credentials will then give us the information and evidence that we need to ensure educators, providers, teachers are receiving the wages that align with their experience and expertise,” she said.
SB 241 also includes financial guardrails like co-payments or a waitlist that would trigger if New Mexico’s economy takes a turn for the worse.
Under the bill — and the proposed rule changes — co-payments or a waitlist would kick in under a number of factors, including the average price for West Texas intermediate crude oil dropping below $50 per barrel or enrollment in universal childcare exceeding state projections by 3%.
Under those circumstances, co-payments would kick in for families with incomes of more than 600% of the federal poverty level. Families between 600% and 900% of that line could pay up to 3% of their household’s monthly income, and families above 900% could pay up to 7%.
Notably, the rule changes would allow the early childhood department to cover co-payments when it has the money to do so, and allow the agency’s Cabinet secretary to waive a family’s co-payments under exigent or emergency circumstances.
Sclafani wrote that the goal of the rule change is to “ensure that, if co-payments are required in the future, they are administered in a way that is predictable, fair, and does not unnecessarily disrupt a child’s care.”
Salary spending concerns
Providers have raised concerns with another key component of the proposed rules: the requirement that they spend at least 57% of the money paid to them by the state for childcare assistance on the salaries of teachers, substitutes, directors and others.
Some have called the percentage arbitrary, questioning how the state arrived at 57% as the number that providers should be using to guide their spending on salaries. Providers argue the percentage might work for some childcare facilities, especially smaller operations, but might not for others.
Tedrow said providers have already given mixed feedback on whether they could meet the 57% requirement — some believe it will be possible while others don’t. For instance, she said larger operations with human resources specialists, financial officers, website costs and other expenses may have budgets that do not work out to 57% of spending going toward frontline workers’ salaries, whereas smaller businesses with less in overhead costs may not.
“It’s really concerning that ECECD put out an arbitrary number without clear definitions or thinking about the larger, multi-site entities,” she said.
In response to a question about how providers’ business models could be impacted by the new proposed rules, including the requirement dictating how much they should spend on salaries, Sclafani wrote that SB 241 “requires the department to set the portion of the rate that is used for salaries and benefits.”
“The proposed 57% takes into consideration child care operators’ expenses,” she wrote.
Olga Grays, of advocacy organization OLÉ New Mexico and a member of a task force dedicated to implementing the wage and career ladder, also expressed concerns the state’s plans for ensuring its payments for childcare are used by providers for salaries were lackluster. She suggested the early childhood department impose random audits of up to 10% of providers to “make sure that people are being honest and the money is going where it needs to go.”
Sclafani wrote in response to the concern that “accountability is a central part of both SB 241 and the proposed rules. We look forward to receiving public comment.”
