Alaska child care advocates want subsidies and tax credits caught in legal limbo — and more

JUNEAU — Advocates want the Alaska Legislature to again pass a child care measure that is being challenged in court, along with additional help for the beleaguered sector.

Legislators last year approved Senate Bill 189, which included new state tax credits for certain corporations that contribute to child care or offer their employees child care, alongside an increase to the state’s existing assistance payments for families.

SB 189 was combined with several different measures in the final hectic hours of last year’s legislative session. Gov. Mike Dunleavy allowed the bill to pass into law without his signature in September.

But the measure has since faced a legal challenge. Former Wasilla Republican Rep. David Eastman sued the state in November, arguing that the combined bill violated the Alaska Constitution’s “single-subject rule,” which requires that provisions adopted in a single bill all relate to one topic.

State senators have recently introduced measures that were identical to those approved by the Legislature last year. Those measures are intended to avoid disruptions if a court strikes down SB 189 as unconstitutional, lawmakers said.

Anchorage Reps. Zack Fields, a Democrat, and Julie Coulombe, a Republican, said the Legislature should pass the same child care provisions as last year.

“Just do the safe thing. Effectively nullify the lawsuit and maintain these important programs,” said Fields, co-chair of the House Labor and Commerce Committee.

Child care providers and workers have long struggled with low wages, high turnover and meager benefits. Parents have complained of long waitlists and soaring costs at child care centers.

The Alaska Chamber of Commerce in recent years has advocated for reforms to expand child care access across the state.

Kati Capozzi, president and CEO of the Alaska Chamber of Commerce, said full-time child care for an infant averages $21,000 per year in Alaska.

She said a recent statewide chamber survey showed that 19% of parents missed work last year, and 12% of parents chose not to work, due to a lack of affordable and accessible childcare.

“We have thousands of able-bodied, ready-to-work Alaskans that are sitting on the sidelines due to this crisis,” she told lawmakers last week.

Capozzi said some companies have “expressed serious interest” in using tax credits, but that was stalled by the lawsuit. She urged lawmakers to pass the same child care legislation as last year without changes.

“Let’s just get that through and then focus on the other pieces,” she said.

Another consequence of rushing to pass Senate Bill 189 is that it did not include a formal estimate of costs for child care subsidies. As a result, the higher assistance payments for families have not been paid yet, said Alex Huseman, a spokesperson for the Alaska Department of Health.

Huseman said that the cost estimate was included in Dunleavy’s budget proposal for the fiscal year that starts July 1. If lawmakers approve that as part of the budget this year, the expanded subsidies will start being paid, she said.

Fields said those subsidies for low-income families are essential.

Alongside subsidies and tax credits, legislators for the past two years have approved $7.5 million in one-time grants for child care providers. Advocates say that grant funding should be increased and made permanent.

Thread Alaska, a statewide child care advocacy organization, wants the Legislature to approve $13 million this year for providers and $8.5 million to support early educators.

Robert Barr, Juneau’s deputy city manager and a thread board member, said those grants would be a starting point to help stabilize and grow the sector. But he also acknowledged the challenges facing lawmakers from the state’s strained finances.

Dunleavy established a task force in 2023 to study child care and how to stabilize the sector. The task force concluded its work late last year and made 56 recommendations. Those include subsidies for families and help for providers to navigate a complex bureaucratic process.

Coulombe, who served on the task force, opposed using state funds to subsidize child care providers’ operating expenses. She said uncertainty surrounding state funding and federal grants under President Donald Trump made that risky for business owners.

“I want them to be thriving businesses. I don’t want them to rely on the state for money every two seconds,” she said Tuesday.

Advocates consider Juneau as the gold standard for municipal support of child care. Anchorage and other Alaska communities are establishing their own local subsidy programs for providers.

Blue Shibler, executive director of the Southeast Alaska Association for the Education of Young Children, is advocating for the state to establish a pooled fund to match local government support. She said that would help providers enroll more kids in child care.

“It’s clear to me that the biggest part of the problem, especially in terms of how it’s impacting the economy, is the supply side,” she said.

Barr calculated that it would cost roughly $47 million per year to create a statewide version of Juneau’s subsidy program for providers. He has advocated for an all-in approach for child care funding from local, state and federal sources.

“The state alone isn’t going to solve it. Local governments alone aren’t going to solve the challenge that we’re facing in the sector,” Barr said.