Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR Begaye

ORIGINAL DATE

LAST UPDATED

1-20-06

2/11/06 HB 13/aHLC

SHORT TITLE CYFD Child Care Worker Wage Support

SB

ANALYST Lucero

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$0.0

$1,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB141, Relates to SB159

Duplicates/Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Children, Youth and Family Department (CYFD)

SUMMARY

Synopsis of HLHRC 13

The House Labor and Human Resources Committee amendment to HB013 amended page 1, line

21 after “workers”, insert” in rural or sparsely developed areas or in areas with a high rate of

worker turnover or low income individuals”.

The amendment narrows where the funds may be expended in FY07 to rural or sparsely devel-

oped areas or areas with a high rate of worker turnover or low income individuals.

The 2005 General Appropriation Act equalized the reimbursement rates for childcare providers

in urban and rural areas with $1,500.0. The equalization was to expand efforts to improve the

quality of child care through the Aim High program.

This bill conflicts with SB 141, which does not have this rural area restriction.

Synopsis of Original Bill

House Bill 13 appropriates $1,000.0 from the GENERAL FUND to Children, Youth and Fami-

lies Department for the purpose of developing a statewide supplemental wage support program

House Bill 13/aHLC – Page

2

and benefit package for eligible child care workers and to implement the program on a phased-

in-basis in selected counties as determined by the department.

FISCAL IMPLICATIONS

The appropriation of $1,000.0 contained in this bill is a RECURRING expense to the GENERAL

FUND. Any unexpended or unencumbered balance remaining at the end of 2007 shall revert to

the GENERAL FUND.

This appropriation was not included in the department’s budget request and was not part of the

executive recommendation.

The total cost of providing supplemental wage supports and benefits to child care workers is de-

pendent upon the number of eligible child care workers and the magnitude of the individual sup-

plement. The total cost would be determined during the development of a wage support and

benefit program.

SIGNIFICANT ISSUES

The legislature in 2005 issued House Memorial 22 to study the value and impact of providing

supplemental wage support and benefits to child care workers, identify methods to finance such

wage supports and benefits.

From the HM22 report:

The early care and education workforce is an integral part of the socio/emotional and

school readiness development of young children. Their work in the early care and educa-

tion industry enables parents to pursue employment and/or education opportunities that

will allow them to grow both educationally and economically as citizens of New Mexico.

The value of recruiting and retaining a qualified early care and education workforce

reaches far beyond the children who participate in the programs and goes to the value we

place on ensuring that all children are given every opportunity to develop into well-

adjusted, well-educated, highly productive members of society.

This bill does not differentiate amounts to be used for development versus implementation.

PERFORMANCE IMPLICATIONS

CYFD believes the bill will positively impact improvement of the quality of childcare as re-

flected in the performance measures “Percent of movement through levels one through five of

aim high”, “Percent of children receiving state subsidy in Aim High/Stars child care programs of

levels two, three, four and five or with national accreditation”, and “Percent of licensed childcare

providers with an increased level of quality.”

ADMINISTRATIVE IMPLICATIONS

CYFD will absorb any additional administrative costs.

House Bill 13/aHLC – Page

3

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates SB 141.

Related to SB 159, part 5 which proposes one million dollars ($1,000.0) for wage supplements

for early childhood teachers, based on the educational level that those teachers achieve.

TECHNICAL ISSUES

The method for paying a wage supplement has not been fully developed. HM22 proposed a

sample wage supplement schedule which is tied to educational achievement, experience, and low

turnover. As an employee builds knowledge in early childhood development the wage supple-

ment increases. An additional supplement is proposed for each year of experience the worker

attains. Knowing that continuity in a child life is important, the wage supplement would also

reward employees a premium for remaining employed in the same program. (sample supplement

schedule attached)

HM22 identified several health benefit options including participating in the State Coverage In-

surance (SCI) program with the state paying the SCI monthly premium, making the necessary

changes to allow early care and education professionals to buy into the State employees insur-

ance package, medical savings accounts. Other benefits such as dental and vision insurance, re-

tirement benefits, life insurance and paid leave were discussed. The HM22 work group recom-

mended additional study on how to increase the availability of these benefits.

HM22 suggested a statewide phased in implementation beginning with counties or communities

around the State that currently do not receive significant funding for private early childhood pro-

grams.

OTHER SUBSTANTIVE ISSUES

From the HM22 report:

The loss of teachers and directors in the early care and education workforce to other ar-

eas of employment has created a need to provide incentives, such as benefits and

wages, broadly comparable to the positions the staff with similar educational back-

grounds receive in other entities outside the early care and education industry. It is our

belief that supplemental wages and other benefits not currently available to the early

care and education workforce will provide an incentive for qualified employees to re-

main in their present positions.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

As stated in House Memorial 22, there is a shortage of child care professionals in the State and

an even more sever shortage of professionally educated and trained early care and education pro-

fessionals. Without a wage supplement benefits program, more staff will leave the industry leav-

ing New Mexico’s children in the care of substandard staff.

DL/mt

Attachment

House Bill 13/aHLC – Page

4

APPENDIX

SAMPLE WAGE SUPPLEMENT SCHEDULE

Education

Wage Supplement

Additional 2% for

each year of experi-

ence

Additional 3% for

each year of experi-

ence (if at same pro-

gram)

45 Hr (entry level course for center staff)

and 18 Hr (entry level course for FCCHPs)

or one 3-credit EC course; or CCP or NAC

for directors

$100

$2

$3

At least 6 semester hours toward an AA in

EC

$200

$4

$6

At least 12 semester hours toward an AA

in EC

$300

$6

$9

At least 18 semester hours toward an AA

in EC

$400

$8

$12

At least 24 semester hours toward an AA

in EC

$500

$10

$15

AA in non related field plus 6 credit hours

in EC, or 36 semester hours toward AA in

EC, or 36 semester hours in related field

plus a CDA

$750

$15

$23

45 hrs toward AA in EC or 45 semester

hours in related field plus at least 12 hours

in EC toward AA in EC

$1,000

$20

$30

AA in related field plus 15 semester hours

in EC

$1,500

$30

$45

AA in EC

$2,000

$40

$60

Bachelor Degree in related field plus at

least 90 semester hours toward BS in EC

and at least 15 credit hours in EC

$3,000

$60

$90

Bachelor Degree & licensure in Early

Childhood Education

$4,000

$80

$120

NOTES:

- The supplement would be for teachers and directors working in licensed early childhood programs

at least 30 hours/week and earning $16 an hour or less.

- Developmental Reading and Math classes count as courses required for degrees.

- Each year of experience garners a 2% increase in the supplement; the increase is 3% if the person

stays in same program.

- An individual must be at the same program for 6 months to be eligible for the supplement.