WA lawmakers consider axing child care licensing fees

SEATTLE – State lawmakers are considering eliminating the annual fees that child care providers must pay to be licensed by the state’s Department of Children, Youth and Families.

Senate Bill 5130, sponsored by Sen. Claire Wilson, D-Federal Way, would eliminate those fees. She said they can be a barrier as Washington battles a child care shortage. The proposal received a brief public hearing in Tuesday morning’s Senate Early Learning and K-12 Education Committee meeting.

An in-home provider must pay $30. A child care center must pay $125 for the first 12 children plus $12 for each additional child. The licensing fee for a center with 40 children would be $461.

“The fee, for many, can oftentimes hamper the opening and the expansion of facilities in communities across our state,” Wilson said.

According to DCYF estimates, the need for child care in Washington exceeds the system’s capacity. Still, there is significant variation in need from county to county, and depending on whether families are searching for child care for an infant, toddler or preschooler.

Sen. Paul Harris, R-Vancouver, had remarked earlier in the committee meeting, as lawmakers received a briefing from DCYF officials, that two rural counties in his southwest Washington district, Klickitat and Skamania, were “very hard hit” by a lack of child care access.

There are about 6,000 licensed providers in the state, according to DCYF. Not all caregivers require a license.

The licensing fees aren’t massive, depending on the size of the child care provider. Amy Anderson of the Washington Childcare Centers Association told lawmakers that child care providers face such thin margins that even eliminating licensing fees can affect their bottom line.

Anderson said the state waived the fees during the pandemic, which helped child care providers stay open. According to DCYF, the fees were waived until mid-2023.

Sen. Deb Krishnadasan, D-Gig Harbor, asked whether Anderson saw eliminating the fee as a way to entice providers to open more centers, or to decrease the cost of child care for families.

“I would say both,” Anderson said. “The margins are so thin for child care providers that even taking away these licensing fees are going to have an impact on that bottom line and whether or not they are able to open new child care centers or family home care.”

By opening new child care centers, more people can re-enter the workforce, Anderson said. A study by ReadyNation and Child Care Aware last year found that the lack of enough care for kids from birth through age 5 costs Washington’s economy $5 billion a year in lost wages, productivity issues and tax revenue.

DCYF estimates that nixing the fees would mean the state would collect $2 million less annually.

That’s not a huge figure in the context of the state’s overall budget, but measures that cost money or reduce the amount of revenue the state collects could face a hurdle in the session as lawmakers grapple with a significant budget shortfall.