The Arkansas Department of Education is making significant changes to its School Readiness Assistance program. On Sept. 19, the department hosted a Zoom webinar with early childhood providers to inform them of changes to reimbursement rates and adjustments to the sliding scale copayment rates for eligible families. The changes were scheduled to go into effect today, Oct. 1 — less than two weeks’ notice.
That left childcare providers like Lensa Odima-Warden scrambling. She’s the owner and director at Apple Tree Academy in Springdale. She says when she told parents about the changes, they said they would not be able to afford it.
“I know for me, in order to be able to compensate my employees, I can’t go lower. This is the lowest that I can go.”
Some of those parents include five of her teaching staff, all of whom have more than one child.
“I have one parent with two kids here that I believe started applying for vouchers in February, whenever the waitlist was implemented, and has not… Right now we’re at about $6,000 or $7,000. I’m not charging her for that because she’s providing a service to our community. And we were told, ‘Hey, if you work more than 30 hours or 20 hours and you work at a childcare facility and you qualify within this income, then you should be able to get free child care.’ So we’ve been reaching out, reaching out, reaching out, but we’ve not been able to get an answer.”
The School Readiness Assistance program provides financial assistance for childcare to eligible, low-income families while parents work or attend school. The program currently serves more than 16,000 children in Arkansas. The proposed changes include one statewide rate in every county except Washington and Benton, and streamlining the waitlist program implemented in February.
Previously, families making less than 75% of the state median income — approximately $44,000 — qualified for the program with zero copays. Under the new structure, only families making less than 40% of the SMI qualify for zero copays.
Nicole Carey, an education policy expert with Arkansas Advocates for Children and Families, says it’s still not entirely clear how the state will enforce the new standards.
“For current families participating who can’t meet the copayment, and maybe the provider tries to waive it somehow — is the state going to allow them to stay in the program? Because that’s another big question mark of the families right now that aren’t going to be able to do it. Is the state going to say you aren’t complying and kick them out of the program too? Or will that be a potential solution, which then of course is falling on the providers who, based on our childcare model, are already operating potentially barely within margins as it is. So providers, especially those rural providers, I mean, those relationships that they have with those families, it’s going to be so hard to try to then be some type of money enforcement for this state program. And it all is happening so fast.”
Lensa says expecting parents to pay more out of pocket for childcare is a nonstarter.
“I’ve had where some individuals that had even $3 copays, I have to chase them for $3. And for some people they’re like, well, if you have a child, you should be able to provide for them. They are working. They’re just stretched thin. Sometimes parents are not able to afford diapers. For example, we had one where for two weeks we were buying diapers because mom was just like, I cannot afford it. Then I can’t go back and be like, okay, well, since we bought diapers for you, can you give us diapers back? We can try that. But it’s like getting blood out of a turnip because a lot of them are going through hardships.
“We have parents who lose their jobs right when their vouchers end, and they’re not able to get vouchers because they don’t have a job, but they’re not able to get a job because they don’t have childcare. In that situation, she had two students and she stayed for a week, and she was not able to pay us for that week as well. So that’s cost that we’re absorbing because what am I going to do, go after her when she literally did try, going every day, putting out applications.”
She says her work is mission-driven. It’s a people thing, not a profit thing.
“You will see that our prices are lower, but we’re doing that intentionally because a lot of the parents in our community are struggling. If you have two or three kids, paying for childcare is rough, especially if you’re working at just a regular job. And so the vouchers are necessary right now. That decision — we’re not saying that it shouldn’t be a change. We’re asking for more time.”
The Department of Education provided a press release and a frequently asked questions Google doc to providers and the public about the reasons for the changes. In both documents, the agency frames the changes as an opportunity to continue serving as many families as possible while prioritizing those most in need of care.
But yesterday, Arkansas Secretary of Education Jacob Oliva sat before the Early Childhood Legislative Subcommittee to discuss the changes. It was during this meeting that Oliva mentioned for the first time one of the reasons for the rapid decision: the possibility of a federal government shutdown.
“Until we get a budget, we can’t plan on spending those dollars. So we had to start immediately, really looking over the last few weeks, because these were short notices. And I think a lot of criticism that I’m hearing from providers, and it’s very warranted, is that they didn’t have a lot of time to plan and make some decisions. Because we received really short notification that the current revenue and future revenue may look different depending on what our congressional awards are.”
Oliva says another factor in the decision was an unexpected reduction in federal funding.
“One of the things that we didn’t know that was going to happen to us is in this last quarter, when we got our allocation — and we get quarterly payments — the formula changed and we had an $8 million reduction that wasn’t being anticipated for.”
He also says the current model in Arkansas is unsustainable.
“We can’t keep funding at that level unless the state or somebody else makes a significant contribution. So right now, if we just said, well, what if we want to leave everything alone and leave it all the same, it’s probably about $80 million a year that we would need to invest as a state.”
Rep. Julie Mayberry, a Republican from Hensley, asked Oliva when the idea to make these changes first came up. Oliva said about three weeks ago, in part to keep the agency’s budget balanced.
“We’re not Congress, right? We have to present level, balanced budgets. And I know it’s painful and it’s not fun, but I think when I talk to the field, they understand that there’s probably some adjustments that need to be made. They’ve asked, can we just not do this so quickly? Can we have about 30 days to help process? Let us work with you. Let us look at these amounts. Let us define quality. I’m willing to do that, but I’m willing to do that to make sure this legislature knows that if this government shuts down for another three weeks, there’s no money to pay these people at all.”
“Well, but also going back. So let’s just say three weeks ago, this is when the idea came up with you and you all became aware of the situation. Was there any phone call or meeting to people who this might greatly affect, and say, ‘Hey, this is what we’re being told, we want to come up with some ideas?’ Was there any effort to involve the stakeholders in trying to come up with a solution, instead of finding out in seven days this is the solution, no ifs, ands or buts? And I think that’s where there’s a lot of frustration.”
“Which is why I’m publicly saying, I hate that we’re here. I didn’t ask for this. I don’t disagree. Do we want to be transparent? Yes. Are there things we can look in the rearview mirror and say, I wish I would have done differently, which is why we say the windshield is this big, the rearview mirror is this big. These folks want to come to the table and have that conversation. But when you’re under the gun to have an Oct. 1 budget, it’s hard to get a lot of input. So did we meet with local providers? Did we talk to our team? Did we look at other states? Did we ask as many people as we could? Yes. Is this the perfect solution? No. I’m not disagreeing, but we have to do something.”
More than once, Oliva suggested it may be possible to pause certain parts of the new changes for 30 days. Rep. Stetson Painter, a Republican from Mountain Home, tried to get clarity.
“I just want to reiterate for the record that you’re looking at doing a pause until Nov. 1 with the current rates for…?”
Oliva replied:
“Yeah. Make sure I always state that the right way. What we’re looking at is not changing the reimbursement rates to providers for about 30 days, so that we can get them a little bit more comfortable. They are businesses too. They have contracts, they have payroll. They have been very clear. I feel for the most part, they understand the need to make some adjustments to this program. They just need a little more time and want to have more voice to help make those adjustments. And we’re willing to do that. I do think we need to start implementing the sliding scale for copays for families, because we can’t just pause this program. We’ll run out of money by the end of the month.”
Rep. Denise Garner, a Democrat from Fayetteville and chair of the Early Childhood Subcommittee, also sought clarification. She said she is hearing from parents who still don’t know what will happen to their vouchers. Oliva said the department will have to provide more support to childcare facilities.
“Like I said, if you’re under 40% of the threshold, there’s not a copay. Forty to 60%, there’s a little bit of a copay. Above that, it’s a little bit more. If we stay the status quo and don’t get a congressional delegation, there will be no money in this pot to give providers.”
“I get that. I just… I do understand that I’m just a little bit concerned, a whole lot concerned, actually, that we’ve given less than a pay period to these parents to figure out how they’re going to pay for childcare. Right. And that’s why I’m saying the copay goes up by Oct. 1.”
“And I want to work. I want to work with the providers. I want to work with this delegation. What I’m telling you is if we don’t do something, this pot of money will not have any money in it. And somebody’s going to have to fill this pot of money with money from somewhere else. And I don’t have the authority to do that.”
Moore: Where do you find the line between compassion and pragmatism in your work?
Odima-Warden: “It sometimes gets blurred. There are so many outside forces that come in and so many things you have to take in. I even have providers sometimes that are like, well, you’re not running a charity. But I’m like, you know what? You make a little bit of a difference in this person’s life, and hopefully, even if they don’t remember it, that still ripples where it goes.
“Everybody has an agenda, and a lot of the other outside voices come in, and you just have to say which one is going to do the most good and weed out everything. I hope that my response is responsive to you, but it’s hard. We’re a society geared toward, how is it going to benefit me? We’re a society where it’s profit, profit, profit. And it’s hard for me to say, hey, I want these people to have a voice. I want to advocate for my students. I want to advocate for my workers. I want to advocate for my families. But then I’m going to ask them, hey, let me close for today so that I can go and do that, because it might be just that one mom that may be on her last absence at work and that other employer doesn’t care.
“And so again, we go back to: we shouldn’t have to do all this. We can sit down and say, hey, policymakers, hey stakeholders, this is what’s happening across the state. What can we do?”
This morning, Secretary Oliva’s office confirmed the changes in reimbursement rates to the School Readiness Assistance Program would be delayed until Nov. 1. But the changes in copayments are effective today.
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