The state legislature is again being asked to tackle an issue that touches every Missourian in some way – access to childcare services.
Three-fourths of Missouri counties are considered childcare deserts, meaning families struggle to find quality, safe, and affordable childcare. Whether it’s a family who cannot afford the services to an employer losing workers due to lack of childcare, the challenge is impacting Missouri’s workforce participation and economy.
For the fourth year in a row, state Rep. Brenda Shields, R-St. Joseph, is proposing a tax credit package that is designed to help families better afford and access quality childcare. She said Missouri cannot afford to keep kicking the can down the road.
“It is estimated that Missouri’s economy each year that we don’t have enough childcare loses $1.35 billion, which is about $280 million to the bottom line for Missouri,” Shields told a state House committee this week.
Legislation that draws widespread support from Missouri Republicans and Democrats is not a regular occurrence in the state legislature but boosting childcare access is one goal both parties are united on.
“Ninety-percent of a child’s brain is developed in between zero and five (years old). And if we don’t take advantage of that opportunity, we’re not growing the economy currently, but we’re not taking care of our future. And we can never spend enough remedial dollars in 4th grade to make up for the difference,” Shields said.
Her legislation would provide tax credits to childcare providers and afterschool care, donors to these services, and businesses who help to cover the childcare costs of their employees.
Rep. Louis Riggs, R-Hannibal, said passing the plan is overdue to help families seeking childcare.
“And we decimated that sector with COVID and that never really recovered,” Riggs told Shields. “So, this is an important step on that road. I fully support your bill. I’m not going to sweat the fiscal note. I think this is one of those things that it’s an investment.”
For donations given to providers, the tax credit could cover up to 75% of the contribution. The donations could be used for things like staff salaries, training, making site upgrades, equipment, and services.
For employers who provide childcare assistance, the tax credit would amount to 30% of childcare costs. The funding could be used for scholarships to pay for employee childcare costs, in-house childcare, contracts for services, or creating a cafeteria plan for employees.
The third tax credit would go to providers in an amount equal to the provider’s eligible employer withholding tax. They may also claim a tax credit in an amount up to 30% of their capital expenses to improve their business, such as for increasing classroom size, improving bathrooms and other areas.
The package would cap each of the three tax credits at $20 million annually. If the maximum amount of tax credits allowed annually is distributed, the cap must be increased by 15%, provided that all tax credit increases are reserved for contributions made to childcare providers located in a childcare desert.
The maximum tax credit would be $200,000 per person annually.
If passed, the cost is projected at $878,000 the first year and up to $69 million annually the following years.
Rep. Chris Brown, R-Kansas City, is all in on the legislation.
“I hear a lot of chatter in this building about Missouri competing,” said Brown. “It’s kind of a, if you build it or if you pass it, they will come kind of scenario. And if we’re trying to improve our economic, our workforce climate in the state of Missouri, I think this is a huge component to that.”
The Missouri Chamber of Commerce and Industry has been a leading advocate for the legislative effort. President and CEO Kara Corches told the committee that the package would pay for itself.
“We spend a lot of time talking to our fellow state chambers across the nation, and I’m telling you, childcare is the number one issue that they’re all working on. There’s bills in all of our neighboring, competing states trying to figure out this childcare crisis. If we don’t do something about it, we will get left in the dust,” she told the committee.
Corches said the package would go a long way in supporting Missouri’s small businesses. She said lack of access to childcare is a common reason “people are sitting on the sidelines.”
“Childcare is expensive. A lot of people say that childcare, and actually I know this firsthand, it’s more than a mortgage payment. It’s often more than even a rental payment,” she said.
Shields said some parents have reported that infant care costs more than a student’s first year attending the University of Missouri.
Jordan Lea is the economic development director for the City of Raymore. She is also a committee member for Workforce YOU, a Cass County collaborative working to address workforce issues, specifically childcare.
She told the committee that 82 children have been on a wait list for childcare in Raymore over the past year. In the Harrisonville school district, it opened 42 childcare slots this year. Lea told Missourinet most of those slots have been filled.
Robyn Schelp, with child welfare organization Kids Win Missouri, said infant and toddler care is especially expensive.
“Our communities want to help make a change; they aren’t really quite sure how to do that. This tax credit gives them a path to help make a change,” she said. “We have to make this easy for our businesses so that they can participate in this, as well as our providers and our families.”
That’s where intermediaries come in to serve as a third party or go-between. The bill includes provisions about using intermediaries.
“They will help connect donors and businesses, providers and parents, so this program can be used easily in both the urban and the rural areas. And not-for-profits can participate in this program because their tax credits will be refunded because they do not have a tax liability,” said Shields.
Shields said her bill is not government creating childcare.
“It’s local businesses, churches, family homes, group homes who will create the care that their community needs,” she said.
The House has passed the bill each year, but the roadblock has been the Senate, where many bills end up dying each session due to a traffic jam of bills waiting in line.
“They must not have very many children on the Senate side,” said Rep. Michael Johnson, D-Kansas City.
Under the current legislation, the program would expire in six years.
No one spoke in opposition to the bill during the hearing.
For more information on House Bill 2409, click here.
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