(The Center Square) – House lawmakers passed a bill on Wednesday that would change how the state reimburses providers under the Working Connections Child Care program to save $100 million in 2027.
WCCC is a state and federal subsidy for working families and parents enrolled in school whose income is at least 60% of the state median income, or SMI. Eligibility is scheduled to expand to 75% of SMI in 2029 and 85% of SMI in 2031, but House Bill 2689 aims to halt the expansion before that can happen.
If approved, it would help Democrats fill a multi-billion-dollar deficit while ultimately raising spending.
The state House of Representatives passed the proposal with a 53-44 vote, with five Democrats joining the minority party in opposition, and one majority member excusing themselves. HB 2689 now heads to the state Senate for consideration, as another proposal reducing WCCC obligations in that chamber awaits a floor vote.
“There are some good reforms within the bill,” Rep. Travis Couture, R-Allyn, said. “What I fear is that it’s a cost savings on the backs of an industry – our child care industry – that is suffering right now.”
The Department of Children, Youth & Families program had an active caseload of more than 33,000 as of November 2024, with enrollment breaching 44,000 as of February 2025. HB 2689 would initially have capped caseloads at 33,000 in 2027, but the version passed Wednesday removed that provision.
Rep. Mia Gregerson, D-Seattle, said her proposal came at a request from Gov. Bob Ferguson’s office.
“What we’ve done is we’ve actually taken less of a savings,” Gregerson said Wednesday, “because we heard that a cap on working connections was really going to be harmful to everyone around the state.”
According to a fiscal note, pausing new entries and capping caseloads at 33,000 could have resulted in nearly $313 million in savings in 2027 alone, rising to $400 million when other provisions are included.
Instead, HB 2689 now halts the SMI eligibility expansion, caps provider reimbursements at 75% of the market rate for subsidized care, changes payment rules tied to absences so providers can only claim a full month if a child has 10 or fewer absences, or a half month if that child was there one day but had more than 11 absences that month, and ends prospective payments based on anticipated start dates.
The last thing it does is repeal enhanced subsidy rates for four counties considered child care deserts.
According to the updated fiscal note, the current status of HB 2689 would result in savings of around $102 million in 2027, of which about $9 million would be federal dollars. Those savings would rise to more than $462 million in the 2027-29 biennium and another $462 million in the following biennium.
“Benton County, Walla, Walla County, Whitman County and Clark County,” Couture said, “since 2007, they’ve had enhanced rates; these enhanced rates were meant to help in those child care deserts.”
The House Republican budget leader argued that Washington state’s “regulatory regime” has created these child care deserts by imposing what he described as excessive red tape on the industry. The provision repealing enhanced rates for those four counties amounts to $15 million in annual savings.
Rep. Mary Dye, R-Pomeroy, said she represents Whitman County, which is home to Washington State University, where many families need child care while pursuing a degree. She said WCCC makes this possible and warned that the proposed cuts would upend that across the rest of the county as well.
Like Couture, Dye said the state’s “regulatory regime” has made it hard for the small towns across the Palouse to maintain licensed child care facilities for those areas. She thinks it’s pushing families out of the county because the parents can’t find anyone to care for their children while they are at work.
“How do you keep the teachers in your school without childcare? How do you get the healthcare personnel that you need? That’s what’s happening in eastern Washington,” Dye said. “We’re being depopulated by default, and it’s childcare at the base of it that makes it more difficult for families.”
