Sen. Charlane Oliver introduces child care affordability reform

Slate of bills aim to reduce costs, increase availability for working parents

Tennessee Senate Democrats
5 min readFeb 9, 2024

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NASHVILLE — Nearly half of Tennessee is a child care desert and even in places where child care agencies are available, affordability and workforce shortages can still leave care out of reach for many families.

Tennessee Sen. Charlane Oliver, D-Nashville, is tackling the state’s child care crisis head on with a legislative package aimed at lowering costs for working parents, increasing availability and investing in the state’s underpaid caregiving workforce.

“Child care and care-giving workers are essential to our economy as they enable parents to participate in the workforce and reach their career potential,” said Sen. Oliver, vice chairwoman of the Senate Democratic Caucus. “Right now, too many parents from working and middle class families are leaving good jobs because they either don’t have access to high-quality child care or they can’t afford it. If we want to protect our long-term economic success, we need to make sure working families have the tools they need to succeed — and affordable child care is near the top of that list.”

Source: TQEE, The Economics of Tennessee’s Child Care Crisis

In 2022, a study that examined Tennessee’s child care crisis found that inadequate child care resulted in $1.7 billion annually in lost earnings for parents and $910 million in lost revenue for business owners and taxpayers.

Cost was a driving factor for many families, according to the study. In Tennessee, the average annual price of center-based care, irrespective of quality, was $11,068 and $10,184 for infants and toddlers respectively — more than the cost of tuition at most state colleges.

To support working families and protect our long-term economic success, Sen. Oliver will soon begin introducing a slate of bills targeting the root causes of Tennessee’s child care crisis.

Make child care more affordable for working families

Increase eligibility for child care assistance
Senate Bill 2064, by Sen. Oliver and Rep. Bob Freeman, would increase the number of working families who are eligible to participate in the state’s Smart Steps Program, which provides child care payment assistance. Currently, families are only eligible if they earn 85% of the state median income or less — about $52,000 annually for a single parent. Under this bill, income eligibility would increase to the state median income.

Set reasonable child care co-pays
Senate Bill 2207, by Sen. Oliver and Rep. Karen Camper, aims to keep families from falling off the “benefits cliff,” which occurs when a low-income family’s increased income triggers an abrupt loss of child care assistance that outweighs the boost in pay. The benefits cliff is counterproductive to self-sufficiency, which should be the goal of state policy, Sen. Oliver says. This bill eliminates the state’s Smart Steps Program co-payment fee for families under 150% of the Federal Poverty Line and caps co-payment fees at 7% or less of household income for families above 150% of the Federal Poverty Line.

Modernize child care reimbursement formula for ‘true costs’

Senate Bill 1805, by Sen. Oliver and Rep. Jason Powell, would modernize the formula used by the Department of Human Services to calculate the cost of child care. Currently, the department uses a “market rate” formula, which can underestimate the cost of child care by more than half. For example, the department’s current base reimbursement rate for infants in center-based care is $1,018, which meets the 75th percentile of the most recent market rate survey, based on 2020–21 data, of $1,075. However, the estimated true cost of care for infants in center-based care is $2,280. This legislation, Sen. Oliver says, would ensure the department’s reimbursement rate formula includes a “true cost” estimate, resulting in more realistic rates for child care providers.

Investing in the early care and education workforce

Senate Bill 2063, by Sen. Oliver and Rep. Bob Freeman, would establish a two-part study of low wages in the child care sector — one involving a pilot program for child care workers advancing in their careers and a second that examines compensation throughout the childcare workforce.

  • Under the two-year pilot program, child care educators and adults working in early care, who receive public assistance from the state, would continue to qualify for public benefits even when the worker receives a wage increase from their employing child care agency that pushes them over eligibility thresholds. Sen. Oliver says child care workers are historically underpaid and the program will test whether public assistance, coupled with salary increases, can help child care agencies maintain adequate staffing levels, which would, in turn, increase the number of available enrollment slots for children.
  • The bill would also direct the Tennessee Advisory Committee on Intergovernmental Relations to study child care worker compensation rates statewide as well as the effectiveness of the two-year pilot program. Researchers would examine the establishment and feasibility of an early educator target compensation scale, the benefits cliff in the child care workforce, and whether public benefits program eligibility thresholds are in alignment with state program income eligibility requirements.

Target support to high-need areas and populations

Child meal program in food deserts
Senate Bill 945, by Sen. Oliver and Rep. Harold Love, would direct state officials to develop a plan to provide full meals — instead of snacks — to students enrolled in after-school child care programs that serve children within a USDA-designated food desert. Over 40% of Tennessee families report low or very low food security and the effects of child hunger can result in poor academic performance as well as long-term physical and mental health issues.

M.A.T.C.H. Fund to incentivize local investments in child care
Senate Bill 1907, by Sen. Oliver and Rep. Torrey Harris, would create the Municipalities’ Access To Childcare (M.A.T.C.H.) Fund that would incentivize municipalities to invest in child care by matching investments that cities, counties and metropolitan governments make in programs for children from birth to age 3. The fund would pay a dollar-for-dollar matching grant to local governments that make investments in eligible child care programs either directly or through a local partner organization.

Sen. Oliver will begin next week introducing pieces of her child care affordability agenda to committees in the Tennessee Senate.

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Tennessee Senate Democrats

Fighting for everyday people in the Tennessee General Assembly