Report calls for streamlining child care licensing process

Child care in Arkansas can be made more available and affordable by reducing licensing and regulatory burdens, providing pooled or state-backed insurance programs, and expanding workforce training offerings, according to a University of Arkansas Office of Education Policy study released Wednesday (Oct. 29).

The report was funded by United WE, an organization committed to elevating female labor force participation, and the Walton Family Foundation.

The report said that child care is too expensive and too scarce, especially in rural Arkansas. In an online presentation announcing the release of the report, Wendy Doyle, United WE president and CEO, said, “There is no state in America where child care is affordable, and Arkansas is no exception.”

The year-long research process of preparing the “Early Childhood Care and Education in Arkansas Licensing Policy and Practice Report”^[1] included 50 interviews and six focus groups. Researchers Ashley Daniel and Sarah McKenzie, Ph.D., wrote the report.

The report says the highest-quality infant care facilities in Arkansas would cost $15,000 annually, about 26% of the state’s median household income of $58,700 in 2023. Federal guidelines say families should spend no more than 7% of their income on child care, the report says.

The report noted six barriers facing child care providers: licensing and regulatory burdens, financial barriers, workforce shortages, zoning and code enforcement challenges, dependence on federal funding, and family child care barriers.

The researchers say licensing regulations are too complex and have long timelines, overlapping inspections, and sometimes duplicative rules. Providers sometimes must meet both state licensing requirements and local approvals, with agencies checking the same things separately.

In addition, some steps can be out of order. A provider may need proof of insurance in order to obtain a license but can’t get the insurance until it obtains the license, Daniel said during the online presentation.

Daniel said the licensing and inspection barrier would be the easiest one to remove. The report suggests streamlining the licensing process and aligning inspections. A unified licensing system working across agencies and jurisdictions would reduce duplication and delays.

Another of several reforms would be a digital application platform with step-by-step guidance. Indiana has developed an online portal that lets providers apply for licenses and track their applications.

Financial barriers are another challenge facing child care providers. The report suggests the state explore pooled or state-backed liability insurance programs to reduce the cost of premiums. Grants or low-interest loans could help pay for facility modifications required by health and safety regulations. Financial assistance could help small providers pay for background checks.

Child care providers also face workforce shortages related to the industry’s low wages, high turnover, and limited training opportunities. The report suggests low-cost certification programs and career pathways for individuals without a high school diploma. It suggests states launch reciprocity pilot programs across state borders, as Nevada has done with numerous states, including Mississippi, Missouri and Oklahoma.

The report suggests changing local zoning codes to permit child care in residential and mixed-use areas, and creating “child care zones” with pre-approved guidelines.

Another barrier is child care providers’ dependence on federal funding – an issue that has moved to the forefront in recent months as the federal government has cut Arkansas’ $137 million allocation for child care vouchers by $8 million. The Department of Education has responded by adding co-pays for some families and announcing planned cuts to providers.

The report suggests expanding state funding and creating new public-private partnerships. It notes that New Mexico has become the first state to offer free universal child care for nearly all families.

To address family child care barriers including limited access to training, the report suggests state funding for home-based child care programs in areas where they are most needed.

The researchers noted that Arkansas has taken steps to address the child care issue. The LEARNS Act, which overhauled the state’s education system in 2023, moved licensing authority and most early childhood education funding from the Department of Human Services to the Arkansas Department of Education (ADE). The report says the intent was to align early learning with the state’s overall education efforts and create a more education-focused early childhood system.

“Under ADE, licensing is now more education-driven, with an increased emphasis on curriculum quality, teacher credentials, and school readiness standards,” the report says.

The Office of Early Childhood, which is housed within the Department of Education, has drafted guidelines that are under review as part of a broader strategic plan. The proposed changes are expected to be presented to the Arkansas Early Childhood Commission in the coming months.

The LEARNS Act also created local early childhood lead organizations that coordinate programs, identify gaps, encourage partnerships, and align public and private providers within their communities.

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