DC Council Should Restore Funding for the Pay Equity Fund

Testimony of Anne Gunderson at the Committee of the Whole Fiscal Year 2025 Budget Hearing for the Office of the State Superintendent for Education

Chairman Mendelson, members of the committee, thank you for the opportunity to testify. My name is Anne Gunderson, and I am a Senior Policy Analyst at the DC Fiscal Policy Institute (DCFPI) and a member of the Under 3 DC Coalition (U3DC). DCFPI is a non-profit organization that shapes racially-just tax, budget, and policy decisions by centering Black and brown communities in our research and analysis, community partnerships, and advocacy efforts to advance an antiracist, equitable future.

Despite being called a budget of “shared sacrifice,” Mayor Bowser’s proposed fiscal year (FY) 2025 budget and financial plan eliminates the Pay Equity Fund (PEF) and cuts funding for the child care subsidy program, balancing the budget on the backs of early educators and the families they serve. The DC Council should restore full funding to the PEF across the financial plan. Eliminating the PEF and cutting the child care subsidy program will decimate the early education sector by backtracking on DC’s commitment to Black and brown educators fueling a sector on which all other businesses rely.

The Council Should Restore Funding for the Early Childhood Educator Pay Equity Fund

Educators are the foundation of DC’s early learning system, shaping the most formative years of infants’ and toddlers’ mental, emotional, and social development. Paying early childhood educators livable and professional salaries is one step needed to boost teacher satisfaction, retention, and quality care, thereby improving DC’s early learning system. Over 4,000 early childhood educators, most of whom are long underpaid Black and brown women, have received boosted income since the launch of the PEF, and over 1,000 educators and their families have been covered by HealthCare4ChildCare (HC4CC).[1]

The mayor’s proposed budget eliminates funding for the PEF across all four years of the financial plan, abruptly ending a program that has already been implemented successfully for two years. For some educators, losing the PEF means a 40 percent reduction in their annual salaries, or racking up medical debt in the absence of affordable care. Today, teachers will testify about how they will suffer, and we have already heard from them at past hearings on how they have used the income to buy homes and with their own children. Losing this funding would devastate educators who took DC leaders by their word that this program would provide professional wages in the long-term.

Despite the mayor’s own Comeback Plan calling for building “economic stability, mobility, and wealth” among DC’s Black, brown, and Indigenous residents, her budget cuts a program that has made such incredible progress towards achieving pay equity.[2] The Council should restore funding for the PEF across the financial plan and refuse to balance the budget on the backs of the Black and brown women that caregivers entrust with their children. That is not “shared sacrifice.”

The Council should continue to push back on the Chief Financial Officer’s overreach by forcing the mayor to replenish reserves more quickly than what DC law requires—an act that blew a $253 million hole in her budget and resulted in the proposed elimination of critical programs, like the PEF.[3] The Council should hold its ground that the law allows lawmakers to replenish the Fiscal Stabilization Reserve using future budget surpluses. The Council could ask the Attorney General for an official opinion on this matter. The Council could also explore progressive revenue sources for future years to keep up with the growth of the program.

When Child Care Crumbles, the Economy Crumbles

Eliminating pay equity and access to affordable health care provided through the PEF could lead to devastating, long-term, and broad consequences that go beyond the classroom. PEF elimination could (1) cause a mass exodus of early educators, causing a churn in classroom teachers, which would interrupt learning, (2) force facilities to close their doors due to workforce shortages and the inability to operate on tighter margins, and (3) result in fewer places for District parents to send their children to learn while they work, harming businesses and DC’s economy. At a time when the District is still working to increase the supply of high-quality child care, these cuts are a step in the wrong .[4]

The mayor also proposed a $10 million recurring cut to the child care subsidy program, which offers support to parents with the lowest incomes to afford child care. In the District, this means that the subsidy program is an avenue for predominately Black and brown parents to give their children a jumpstart on their education and to have a safe and supportive environment to place their children while they work or pursue an education.

The child care subsidy program currently serves over 6,000 in the District, and helps caregivers stay attached to the workforce, a vital service that supports our economic recovery.[5] In 2018, lawmakers passed the Birth-to-Three for All DC Act, which set the vision for early care and education in the District and established a calendar for expanding the child care subsidy program to increasingly higher income families until all District families would be eligible in .[6] The Office of the State Superintendent of Education (OSSE) has been working to address barriers to families to access this program, like launching an online application, but delays in review and approval for subsidy continue to cause underutilization, and cuts to the program undermine DC’s ability to address these issues and push for future expansion. DC already cut the subsidy program in the FY 2024 budget and another $10 million cut could put at risk vouchers for families once OSSE implements solutions to address utilization. Therefore, the Council should work to restore funding for the child care subsidy program to ensure as many District parents can access this resource as possible.

We cannot cut our way to prosperity. DCFPI is asking the Council to restore all funding to the PEF and to the child care subsidy program to save the District’s early childhood education system. DCFPI appreciates the Councilmembers who spoke in defense of the PEF at the public briefing on the mayor’s budget on April 3, 2024.

Thank you for the opportunity to testify. I am happy to take questions.

[1] DC Office of the State Superintendent of Education, Responses to Fiscal Year 2023 Performance Oversight Questions, February 2024; DC Health Benefit Exchange, Fiscal Year 2025 Budget Oversight Pre-Hearing Questions, April 2024.

[2] The Office of the Deputy Mayor for Planning & Economic Development, “DC’s Comeback Plan: Our 2023-2027 Economic Development Strategy,” January 2023, page 11.

[3] Tazra Mitchell, “CFO Overreach on Reserves Policy May Hurt Black and Brown Women the Most,” DC Fiscal Policy Institute, March 21, 2024.

[4] Bainum Family Foundation, Assessing Child Care Access: Measuring Supply, Demand, Quality, and Shortage in the District of Columbia, January 2024.

[5] DC Office of the State Superintendent of Education, Responses to Fiscal Year 2023 Performance Oversight Questions, February 2024.

[6] DC Law 22-179: Birth-to-Three for All DC Amendment Act of 2018.