A bill for an act relating to economic development including child care, grants and tax credits relating to child care, and state child care assistance, and including applicability provisions.
The bill also introduces a small business child care tax credit aimed at incentivizing businesses to offer child care benefits to their employees. This credit allows businesses to receive up to $3,000 per employee per year for providing child care benefits, with total credits capped at $2 million annually. In addition, the creation of a child care center and child development home grant fund is mandated, establishing a program for grants up to $50,000 to support the establishment or expansion of licensed child care facilities. This fund aims to address the critical shortage of affordable child care options in the state, aligning with workforce needs.
House File 695 is a legislative act aimed at enhancing economic development in the state by introducing several measures related to child care. The bill outlines a child and dependent care tax credit, which allows taxpayers to reduce their state income taxes based on the federal child and dependent care tax credit. This reduction is particularly generous for those with lower income levels, providing a 100% credit for taxpayers earning $45,000 or less, with scaled back percentages for those earning up to $200,000. Such measures hope to alleviate financial burdens on families, making child care more accessible.
This bill stands as a response to growing concerns regarding the accessibility and affordability of child care services, particularly for low-income families. However, it is likely to incite debate regarding its fiscal implications and the effectiveness of tax credits versus direct subsidies for families. Critics may question the sustainability of the tax incentives and whether they adequately address the foundational issues of limited child care availability and affordability for those at or below the poverty line. Stakeholders on opposite sides of the aisle may have differing views on whether developing child care infrastructure through grants or incentivizing businesses through tax breaks will yield the best outcomes for families in need.