TACIR draft finds low wages, regulatory frictions and possible policy fixes to expand childcare supply

TACIR staff presented a draft report Dec. 19 summarizing research on childcare workforce conditions, capacity constraints and regulatory barriers in Tennessee required by Public Chapters 934 and 938 (Acts of 2024).

Why it matters: Childcare affordability and workforce shortages affect parents’ ability to work and employers’ ability to hire; staff told commissioners these problems vary across communities but are a consistent barrier to workforce participation.

Study methods and key findings: Bob Marrero, presenting the draft, said TACIR staff conducted six focus groups, more than 45 interviews and an online survey that drew 364 responses from childcare directors and owners. Staff reported that about 55% of respondents indicated hiring and retention were major problems and that the estimated average hourly wage for childcare workers in Tennessee is roughly $13.21 (U.S. Bureau of Labor Statistics, 2023). Marrero noted that about one in 10 childcare workers falls below the federal poverty line.

Regulatory friction and local variation: The draft identifies areas where state and local rules are not aligned and where local requirements can be more restrictive than state licensing standards. Examples include widely varying local requirements for outdoor play‑space minimums (several cities requiring far more than the state’s 50 square feet per child minimum), and local building or fire code amendments that require sprinkler systems in facilities the state code would not require to be sprinklered. Marrero said Tennessee’s State Fire Marshal’s Office and the Department of Human Services (DHS) have agreed with staff recommendations to reestablish regular regional meetings and better coordinate inspections with local fire and building officials to reduce confusion and delays during pre‑licensing and occupancy approvals.

Workforce supports and incentives: The draft reviewed the state’s Child Care Wages Tennessee education‑based supplement program and noted it has helped but mostly targets education attainment. Staff recommended developing an additional wage incentivization program that rewards years of service and retention, not only higher education, citing models used by other states (Virginia, Georgia).

Facility and finance recommendations: The draft recommends exploring ways to make underutilized local education agency (LEA) properties available to childcare providers (similar to priority access now provided to charter schools), and suggests the General Assembly consider exempting childcare businesses from the state business tax and compensating local governments for lost local business tax revenue to reduce operating costs for providers.

Local officials’ concerns and options: Presenters and commissioners discussed zoning differences, coordination of plan review and inspections, and the high real‑estate costs in fast‑growing communities. Marrero said state and local coordination — not wholesale preemption — is the recommended path, with local tailoring as appropriate.

Ending: The draft will be revised with commissioner feedback and presented as a final report for possible approval at TACIR’s January meeting so the commission can meet statutory deadlines on the public chapters.