For the record, Heidi Hedberg, commissioner of the Alaska Department of Health, told the House Labor and Commerce Committee on Feb. 19 that the governor's Task Force on Child Care completed two reports that together contained 56 recommendations aimed at increasing access to quality child care across the state.

The task force, created by a governor's administrative order in April 2023, examined workforce, wages and benefits, workplace conditions, career pathways, system coordination and small-business support for both home-based and center-based providers. "What we know is that a robust childcare system is critical to ensuring the healthy development of our children," Hedberg said. "It also supports parents to participate in the workforce, and a high quality childcare system can support children as they are entering kindergarten."

The department presented the task force's workforce findings, a newly completed cost-of-care study and the steps the department has already taken and will pursue in the next 12 to 18 months. Leah Van Kirk, the department's health policy advisor, said the cost-of-care analysis modeled actual business costs for licensed homes and licensed centers and showed large gaps between current subsidy rates and the cost of providing care in many regions. "Our current rate-setting methodology isn't sustainable for childcare businesses in Alaska," Van Kirk said.

Key findings and actions reported to the committee

- The task force produced two reports with 56 recommendations. Hedberg said the task force included substantial public participation and contractor work, including a workforce deep dive and a first-of-its-kind cost-of-care study in Alaska.

- Cost-of-care findings: Van Kirk said gaps between subsidy rates and modeled cost-of-care ranged from about $12 to $140 per child per month for home-based providers and from roughly $360 to $653 per child per month for licensed centers, with regional variation. The study modeled assumptions such as operating at 85% of licensed capacity and a 3% uncollectible revenue allowance; it excluded in-kind supports such as reduced rent.

- Subsidy usage and market signals: Van Kirk told the committee that about seven of 10 children in care do not use a subsidy, so market rates are directly influenced by what families pay. Alaska uses a market price survey (biennial) and has begun using the cost-of-care work as an alternative methodology to inform rate-setting.

- Implemented regulatory and operational changes: Hedberg and Van Kirk described several department actions taken this year, including removing the childcare associate diploma/GED requirement for relatives caring for family members, broadening administrator qualifications, aligning licensing and assistance regulations, and allowing administrators to delegate on-site authority. The department also launched the first portal of the Alaska Child Care Information System, purchased digital fingerprinting equipment, and plans a pilot of digital fingerprinting in four communities.

- Direct financial support: The department distributed $7,500,000 to providers; 357 providers received funds, which the department said represents approximately 90% of licensed providers in the state.

- Workforce and education pipeline: The department reported partnerships with the University of Alaska Anchorage and University of Alaska Fairbanks to support apprenticeships and college coursework. Van Kirk said the University of Alaska reported a 30% increase in early childhood education enrollments tied to these efforts.

- Business supports and facilities: The cost-of-care work highlighted operating under licensed capacity as a driver of higher per-child costs; models showed that operating at full capacity could reduce cost per child by about $90 to $220 per month. The department plans to inventory state-owned and public spaces for potential public'private partnerships, support start-up/renovation grants for home-based and center providers, and expand technical-assistance for licensing and business operations.

Planned rulemaking and program work

Van Kirk said several regulatory packages are planned or in process to revise rate-setting methodology, account for geographic differentials, revisit copay amounts and eligibility, and launch targeted grants to incentivize care for infants and toddlers, children with special needs and children experiencing homelessness. The department also plans to build out two additional portals in the Alaska Child Care Information System (family and provider portals) and continue the digital-fingerprinting rollout.

Committee question on implementing statute: Representative Fields asked about the status of legislation referenced during the presentation, specifically the change "from 85 to a 5% SMI" (as discussed during the hearing). "We know SP 189 passed," Van Kirk replied, "the department cannot implement that without appropriations, but is in the process of drafting the regulations." Van Kirk's answer indicates implementation of that statutory change will require funding allocations.

Why this matters: The department told legislators that aligning subsidy rates to actual costs and reducing administrative barriers for providers are central to retaining and expanding the childcare workforce and improving access statewide, particularly in rural areas where in-home providers predominate.

The committee had limited time for questions and was asked to submit further questions to the committee office for written responses from the department. The department said it will continue regulatory work and pilot efforts in the coming year and will share additional details with committee members as they become available.