State officials on Tuesday introduced multiple suggested modifications to rules aimed at further developing the state's emerging universal childcare initiative.

The New Mexico Early Childhood Education and Care Department's suggestions, many crafted to align with major legislation enacted earlier this year, would mandate budgeting standards for childcare providers, require reporting of essential data to promote fair worker compensation, and establish protections for the program's financial stability.

“These suggested rules aim to deliver clear program guidelines, enhance accountability, promote consistent family access, and guarantee that public funds bolster a robust childcare industry and early childhood staff,” department spokesperson Julia Sclafani noted in an email. “… ECECD anticipates input from families, early childhood educators, providers, advocates, and other directly impacted partners on these suggested rules.”

Yet, certain providers have voiced apprehensions regarding the modifications, pointing to a clause mandating that at least 57% of state funds for universal childcare cover employee wages and benefits.

“We back investing in the workforce and raising pay,” Barbara Tedrow, president of the New Mexico Early Childhood Association, stated in an interview. “However, rather than enforcing that uniform percentage, we advocate for adaptability in setting staffing and operational frameworks that address the specific requirements of the community, children, families, and staff at each 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.”

Republish our articles for free, online or in print, under a Creative Commons license.