U.S. Sens. Katie Britt (R-Ala.) and Tim Kaine (D-Va.) introduced two bills on Wednesday to address the worsening child care crisis and provide assistance to families, workers, and businesses.
The proposed legislation aims to make child care more accessible and affordable for families while also providing financial incentives for childcare workers and businesses. The bills seek to expand tax credits for parents and increase resources for local businesses.
On Wednesday, Britt shared that she and her husband, Wesley, faced obstacles while navigating their way through the early stages of parenthood. She expressed that their proposed legislation will aid hardworking parents by tackling the issues of affordability and accessibility, ultimately providing significant cost savings.
According to the Center of American Progress, childcare deserts are a reality for over 50% of American families. In Alabama, the Women’s Foundation of Alabama reports that in 2022, nearly 85,000 families needed child care services, yet had no access to affordable and quality options within their communities.
Families have been experiencing the brunt of childcare costs for the past 30 years, with expenses rising by a whopping 220%. In this scenario, parents are often left with no choice but to make difficult decisions between work, bills and child care. Reports from Alabama reveal that mothers feel the heat of this situation and are often forced to make choices such as filing for bankruptcy or choosing between basic household necessities like toilet paper and paying for child care.
According to a report by the Council for a Strong America, the country’s economy suffers a loss of $122 billion annually due to these choices.
Britt stated that when parents are faced with the exorbitant costs of child care, they are often forced to consider the financial feasibility of returning to work. Unfortunately, for many, this is not even a question, as the cost of child care is simply unaffordable, leaving them with no viable alternatives.
In addition, childcare professionals are facing financial difficulties, leading some to consider leaving the industry for higher-paying jobs. Meanwhile, childcare providers are finding it challenging to maintain their businesses due to financial constraints.
According to Britt, the newly proposed legislation will bring relief to all parties involved. Senator Kaine also expressed his pride in working on this issue in a news release.
Camille Bennett, the founder and executive director of Project Say Something and three child care centers in North Alabama, believes that the tax credit programs previously offered in Alabama mainly favored big businesses and neglected low-income families and childcare workers, thus failing to support the industry effectively.
According to Britt, the legislation has a good chance of passing and she finds it to be a realistic approach.
Under the proposed legislation, the Child and Dependent Care Tax Credit (distinct from the current Child Tax Credit) would be enlarged, and made refundable. This will enable low-income working families with childcare expenses to avail of the credit for the first time. The plan also raises the maximum tax credit to $2,500 for families with one child and $4,000 for families with two or more children.
Families will have more support in covering dependent care expenses under the proposal, as the Dependent Care Assistance Program will be strengthened. The program will allow families to deduct up to $7,500, which is 50% more than the current limit.
One of Britt’s proposals is to enhance the Employer-Provided Child Care Tax Credit, which aims to incentivize companies to offer childcare services to their workers. The plan involves boosting the maximum credit from $150,000 to $500,000 and increasing the percentage of expenses covered from 25% to 50%. This strategy could potentially benefit numerous employees who struggle with finding affordable and reliable childcare options while working.
Small businesses will be pleased to know that the legislation provides a more significant incentive for them, with a maximum credit of $600,000. Another great feature is that groups of small businesses can pool their resources and submit joint applications.
According to Britt, small businesses are the backbone of our state, as they add character to each community’s main street. He believes that their success is vital, and the new initiative will be a game-changer for many of them.
The Child Care Workforce Act is set to benefit childcare workers by creating a competitive grant program for states, localities, tribes, and tribal organizations. This program aims to encourage the adoption or expansion of pay supplement programs for childcare workers. The ultimate goal is to reduce turnover rates in the industry and ensure that childcare workers are fairly compensated for their hard work.
