Councilors defend rejection of childcare quality contract despite federal and state consequences 

Last month, New Hampshire Executive Councilors John Stephen and Joe Kenney published a column in NH Journal explaining their decision to vote down a childcare quality contract in favor of funding the childcare workforce grant. Since then, as new information has clarified the state’s inability to fund the workforce grant, they both said they stand by their decision. 

On May 6, the Department of Health and Human Services brought forth a contract that would allocate $1.2 million to the Pyramid Model Consortium, an early education resource company, to support coaching for special needs children and continue to provide free e-learning services to providers under Granite Steps for Quality, or GSQ. GSQ is a nationally recognized, federally funded continuous improvement program that helps childcare programs and teachers with quality and pays them incentives as they improve. 

It was the second time in eight months that the department brought the contract forward to the five-member Executive Council. In a 3-2 vote, led by Stephen with the support of fellow Republican councilors Kenney and David Wheeler, the contract was voted down. 

The Bulletin reported that had the contract been approved, it also would have unified and fully funded the two quality improvement “pathways” for Granite Steps for Quality under one company. Funding for the Environmental Rating Scales pathway, one of the two, has slowly been fading since 2022, leaving programs without the proper support to move through the program. The contract voted down by the Executive Council on May 6 would have restored funding. 

In the column, published July 28, Kenney and Stephen said they voted against the contract and would do so again, because the childcare workforce grant program is the biggest priority for the childcare community. The grant program would provide money to help employers recruit and retain childcare employees and increase wages and capacity. 

“I met with a lot of childcare folks in my district, who all told me unequivocally, unanimously that they want to see and need workforce grants and their legislative appropriation released to them for their workers to meet the workforce needs for recruitment and retention versus any more training dollars,” Stephen told the Bulletin. “We don’t need to go forward with more dollars for the initiative before workforce grants needs are met.”

Funding for the workforce grant has been held up since the biennial budget passed last June, as the Legislature tried to use federal Temporary Assistance for Needy Families dollars, an unusual method that required federal approval. When the article was published, some state officials still believed the federal government had not issued a clear response on how to move forward. 

The May 6 contract was funded fully through the federal Child Care and Development Fund, or CCDF, the pot of money that funds childcare professional development and assistance services and the state’s childcare scholarship program. The state contracts with companies to provide some CCDF-funded childcare services, and because the contract amount is over $10,000, it must first get approved by the Executive Council before it can be used. 

Every state is required to tell the federal government how they plan on spending CCDF money. Some of the money is required to be spent for certain purposes, such as 12% for improving quality childcare. In New Hampshire’s current plan that runs through 2027, state officials listed Granite Steps for Quality as one of the ways they were meeting that requirement. 

The majority of the CCDF dollars go toward the N.H. Child Care Scholarship Program and contracts to meet other federal requirements. The state is spending the most it has in years on the scholarship due to increased income eligibility and program visibility, and after Gov. Kelly Ayotte increased spending to prevent a waitlist for the program. 

CCDF money is subject to federal and state rules and consequences if certain provisions aren’t met. 

According to Health and Human Services spokesperson Jake Leon, if the department does not meet CCDF quality spending requirements, a goal of the May 6 Pyramid Model Consortium contract, the state “may not be able to demonstrate full implementation of the quality improvement and professional development requirements.” 

“As those provisions are federally required, the state faces potential sanctions and other penalties if it is found not to comply with them,” Leon said. “Ultimately, the state would have to return federal funds if it is unable to meet federal quality benchmarks.” 

Other potential consequences for not properly spending CCDF funds under federal law include a reduction in future childcare grants and a “disqualification” of the state from receiving future federal funding. 

Since the column was published, the federal government and the state Department of Health and Human Services issued new guidance on funding the childcare workforce grant. After months of state officials seeking a clear answer from both on whether Temporary Assistance for Needy Families could be used, or whether enough CCDF funds were available based on the state’s current plan, the answer became a clear “no.” 

Kenney and Stephen both said that regardless of the new clarity on the workforce grant funding situation, their positions have not changed on approving future contracts for childcare quality and professional development funding. 

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“There’s nothing that changed my mind; it reinforced the bottom line,” Stephen said. “The issue is (to) meet the legislative intent, find the funding source, and make sure you help the workforce of all childcare providers in this state. When you send the council contracts that are not going to help further recruitment and retention and help our workforce that needs help right now, you’re not going to get my support.” 

Stephen said that he believes CCDF quality funding can be used for the workforce grant, even after Health and Human Services Commissioner Lori Weaver said last week that there are no uncommitted funds that can be redirected to the grant. As a former Health and Human Services commissioner, he suggested that Weaver should instead go to the state’s Joint Legislative Fiscal Committee and ask for a general fund transfer. He also said there is “no risk to the quality benchmarks” required in the CCDF. 

The Fiscal Committee contains members of both parties and legislative chambers. Throughout this year’s legislative session, bills that would have approved state general funds for the grant program were tabled or amended to remove the request due to budget concerns.

Kenney said his position “hasn’t changed” and that he hopes to convince his colleagues they need to put “real dollars” toward the workforce. He said he does not believe there will be any consequences to voting down a future contract. 

“We can’t be this hocus pocus in the budget process,” he said. “The Legislature’s famous for that. … We need to direct our efforts towards childcare, the workforce, and obviously, professional development. But that’s funded until 2028.” 

There is an active contract between the state and the Pyramid Model Consortium that ends in June 2028, but it only partially funds the quality program. Child Development and Head Start Collaboration bureau chief Jessica Carver outlined current and future consequences to GSQ as a result of the May 6 vote in a letter to childcare providers on June 18.

Leaders in the childcare community have had mixed reactions to the councilors’ stance on not approving a future GSQ contract. 

Shannon Tremblay, director of the legislatively enacted Child Care Advisory Committee, said the organization “sincerely appreciates” that state leaders recognize the childcare workforce crisis, but since the GSQ contract does not impact the workforce grant, the committee hopes the councilors will continue to be available to help the workforce in the long term. 

“Regardless of the administrative approach, our priority is that the funding reaches child care professionals efficiently and effectively so they can continue providing the high-quality care and education that New Hampshire’s children, families, and employers rely on,” Tremblay said. 

Jackie Cowell, executive director of childcare advocacy group Early Learning NH, said she was “grateful” to the councilors for raising their voices and “using their strong connections” to help with funding for the childcare workforce grant. She said the column they wrote helps people “not misinterpret” their voice against the contract as “a vote against childcare.”

Trina Ingelfinger, early care and education policy director at New Futures, said the council “should not be gutting one type of workforce support in the name of supporting another.” 

“Early educators — and the children, families, and communities they serve — need all the help we can give them,” Ingelfinger said. “There are childcare programs relying on the training and professional supports in the Pyramid Model contract, and they are getting lost in the conversation.” 

Stephen and Kenney continually reiterate their support for state funding for childcare and early education. Both have said they will continue to use their positions as executive councilors to try to get Weaver and the Legislature to take action on the workforce grant as soon as possible. 

“We’re all striving for the same thing: to provide good, quality childcare for our state. We have to make a statement that says if we don’t have a workforce, we don’t have early childcare learning centers,” Kenney said. “We’re taking a hard line to make sure that they understand that the money that the Legislature supposedly gave to DHHS, they better go find it because we need to give it to the workforce.” 

An amended version of the May 6 contract is expected to come before the council in the next few weeks.