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Montana committee hears testimony to expand Best Beginnings eligibility to 85% of state median income
Summary
Witnesses, providers and business groups urged the House Health and Human Services Committee to expand the Best Beginnings childcare scholarship so more working families can afford care; agency witnesses outlined participation and budget questions including an estimated $17 million appropriation for newly eligible children.
HELENA — The House Health and Human Services Committee heard more than two hours of testimony on House Bill 457 on Thursday, a proposal to change eligibility for the Best Beginnings Child Care Scholarship from 185% of the federal poverty level to 85% of the state median income.
Representative Jonathan Karlen, the sponsor, told the committee the bill is aimed at helping working families stay in the labor force by reducing a ‘‘benefits cliff’’ that can penalize families who earn a modest raise. "The bill I have before you today sets the income threshold for the Best Beginnings Child Care Scholarship program at 85% of the state median income rather than 185% of the federal poverty level for families who work," Karlen said in his opening remarks.
Supporters from across the state — child care providers, advocacy groups, business organizations and parents — told personal stories and offered data they said demonstrate unmet need. "About 66,000 Montana parents are not able to fully participate in the workforce because of childcare barriers," Grace Decker of Montana Advocates for Children told the committee, citing state Department of Labor figures. Providers gave local examples of families who lost subsidized care after small income gains and later left the workforce when they could not afford higher co‑payments.
Department of Public Health and Human Services (DPHHS) staff and the state economist answered committee questions about current participation and cost. Jessie Counts, executive director for the Human Services practice area at DPHHS, said the department’s federal Child Care and Development Block Grant is about $41 million and that the bill’s fiscal estimate would require an ongoing appropriation of roughly $17 million to serve the projected additional children. Counts said the $41 million grant covers licensing, quality supports and scholarships and that precise state match figures will be provided to the committee.
Committee members probed whether past emergency funding during the pandemic produced measurable changes in workforce participation. Amy Watson, state economist at the Department of Labor and Industry, said the state's labor force has grown substantially since COVID, complicating simple before‑and‑after comparisons. "When you look at the number of parents who are out of the labor force or underemployed because of family responsibilities or lack of childcare, that number has not increased as rapidly as the labor force itself," Watson said.
Proponents noted differences between unique annual participation and average monthly participation in Best Beginnings. Zanna Berg of the Montana Budget and Policy Center explained the department’s figures show about 6,500 unique children received Best Beginnings in fiscal year 2024 while average monthly participation is around 4,500 — a distinction the committee sought to understand when evaluating cost estimates.
Several questioners raised the source and sustainability of funds. Representative Buttry asked whether the 85% threshold could conflict with federal grant limits; Karlen and witnesses said 85% of state median income is the maximum allowed under federal rules and that bill language could be clarified. Lawmakers also asked DPHHS to provide exact budget numbers for program costs and state matching amounts.
Supporters argued the change would reduce the number of families priced out of licensed child care, keep parents in the labor force and help businesses retain employees. Dan Brooks of the Billings Chamber of Commerce said the chamber’s surveys show lack of child care is a persistent business concern, and multiple provider witnesses described difficulty covering operating costs without public support.
The hearing closed with the sponsor urging further fiscal review and promising to work with Appropriations on funding. "All federal money is spent before any state money is spent," Representative Karlen said, noting the state would be leveraging federal dollars. The committee did not take a final vote on HB 457 at the hearing; members requested additional budget details from DPHHS and the department of labor to inform future action.
What happens next: The committee closed the hearing on HB 457 and committee staff said DPHHS would provide requested budget and participation breakout figures; Representative Karlen said he hopes the bill will be considered by the Appropriations Committee for funding decisions.
