JEFFERSON CITY, Mo. – With a majority of the state in a childcare desert, lawmakers are pulling out all the stops to help businesses, families and providers. This includes the idea of splitting the costs of child care.
According to the Missouri Chamber of Commerce and Industry, the state’s economy is losing out on more than a billion dollars a year due to a lack of childcare. It’s no longer just an issue for working families, as employers also struggle to find workers. The lawmaker behind this proposal thinks his plan could be a recruiting tool for businesses.
“Employers could opt into the program and the incentive here is that they are providing something that their competitors aren’t,” Sen. Greg Razer, D-Kansas City, said.
Razor said the idea behind his legislation came from the state of Michigan.
“Tri-Share is simply a pilot program that says that the child care costs will be paid one-third by the families, one-third by the businesses, and one-third by the state,” Razer said. “The average employee participation decreased their monthly child care costs by $464 or 65% of the costs of child care in their first year.”
Within the first year of the program in Michigan, Razer said nearly 40 businesses and 400 families took advantage.
The Department of Economic Development and the Department of Elementary and Secondary Education would be able to oversee the program under Senate Bill 881. Razer said eligibility for families would be based on income. For example, a family of three would qualify if the household income is between $50,000 and $80,000.
“We know businesses have countless amounts of unfilled jobs, so we want to do everything we can to remove barriers to entry into the workforce and child care is indeed a barrier,” Kara Corches, vice president of governmental affairs at the Missouri Chamber of Commerce and Industry, said.
This proposal comes as the general assembly is moving forward on a plan to offer incentives to employers, families and child care providers through tax credits.
“We talk a lot about educational choice and opportunities,” Sen. Lauren Arthur, D-Kansas City, said. “The reality is most families don’t even have a choice of where they send their kids because there just aren’t enough spots available.”
Similar legislation died in the Senate last year, but there’s a new push this year to get it across the finish line. Over the course of two years, the state lost 1,1000 providers, leaving some counties without a facility.
Arthur is sponsoring the legislation in upper chamber Senate Bill 742, which would include a “Child Care Contribution Tax Credit,” the “Employer Provided Child Care Assistance Tax Credit,” and the “Child Care Providers Tax Credit.”
“Every single day I get many, many, many phone calls, especially looking for infant and toddler care and my waitlist at all four of my facilities is a mile and a half long,” Nicci Trapp Rexroat, owner of A Place to Grow in mid-Missouri, told the Senate committee Thursday. “These tax credits would help me as a small business owner, an early childhood provider, and as someone who cares about the care and education of children.”
Trapp Rexroat is a childcare provider in mid-Missouri with facilities in New Bloomfield, Holts Summit and Jefferson City. She said she operates an entire infant and toddler facility that has room for 52 children ages two and under. It’s always full, and yet she still has a waiting list. She told lawmakers she’s losing quality staff.
“I would be able to raise the wages that my professional staff desperately need and deserve, as well as the ability to bring staff that are qualified and passionate back into my workforce,” Trapp Rexroat said.
House leadership said they plan to debate and possibly even pass the House’s version of the child care tax credit legislation this upcoming week.
Under House Bill 1488, there would be three new tax credits: the “Child Care Contribution Tax Credit,” the “Employer Provided Child Care Assistance Tax Credit,” and the “Child Care Providers Tax Credit.”
“Each tax credit is capped at $200,000 per taxpayer,” Rep. Brenda Shields, R-St. Joseph, who is sponsoring the legislation, said. “These tax credits are nonrefundable and nontransferable. This is not government care being run by government. It is local businesses, churches and family homes who will create the child care that they need in their communities.”
The Child Care Contribution Tax Credit allows a donor who contributes to a child care provider to receive a tax credit for up to 75% of their contribution. The money can be used for the improvement of a facility, training and salary boosts for staff or to purchase new equipment.
The Employer Provided Child Care Assistance credit helps employers pay for child care for their employees. Businesses can provide scholarships and offer resources in benefit packages.
The Child Care Providers Tax Credit allows providers to invest in themselves. Money can be used to update facilities as long as it is approved by the state’s Office of Childhood. If a provider has at least three employees that work at least 10 hours a week, they are allowed to claim a tax credit in an amount equal to the employee’s withholding tax.
Gov. Mike Parson has previously said this is a priority the General Assembly needs to accomplish this session. This past summer, Parson signed off on $78 million in child care subsidies to help low-income families.
