By a vote of 97-44, the Missouri House of Representatives has passed a childcare tax credit package that is designed to help families and the state’s economy.
State Rep. Brenda Shields, R-St. Joseph, is sponsoring the plan. She said the goal is to help families better access childcare so parents can go back to work. She stresses the most important and critical time in a child’s brain development is from birth to age 5.
“And if we don’t help foster that, we will pay for this later in life,” she said.
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 putting a strain on Missouri’s workforce and economy.
The bottom line: Missouri’s lack of childcare options is hurting the state’s bottom line. According to Shields, her legislation would pay dividends.
“I truly believe if Missouri can fix the childcare problem, we’ll be able to attract more businesses to our state because we’ll be able to say that we have developed all the infrastructure your business needs to be successful in our state, including quality, reliable care for your children,” said Shields.
Her legislation would provide tax credits to childcare providers or afterschool care, donors to childcare services, and businesses who help to cover the childcare costs of their employees. It also includes intermediaries who serve as a third party or go-between. They would help to connect donors, businesses, providers, and parents.
The components of the bill include:
•Child Care Contribution Tax Credit: 75% tax credit for businesses, charitable organizations and individuals on contributions to a licensed or registered child care provider.
•Employer-Provided Child Care Assistance Tax Credit: 30% tax credit on eligible child care expenses for employers’ on-site or off-premises child care for employees.
•Child Care Providers Tax Credit: Credit for payroll tax withholdings for employees or eligible capital improvements to a child care center.
State Rep. Jim Murphy, R-St. Louis County, said he supports the bill, despite his hate for tax credits.
“I’ve got to put my hate for tax credits aside a little bit here and say, ‘What’s more important?’ Our society deserves kids that grow up in a family that isn’t struggling every day just because they couldn’t afford or had to pay outrageous amounts for childcare,” said Murphy. “I don’t know if this is the answer to everything, but I know I’ve been eight years and we’ve done nothing. We’ve done nothing. I’m a hypocrite. I’ve been up against all the other tax credits this year, but this is about kids.”
State Rep. Dave Griffith, R-Jefferson City, said he backs the plan that aims to get citizens back to work to help drive up the economy.
“One thing that I have tried to do in the eight years that I’ve been here is be consistent,” said Griffith. “And I can remember back when I was a freshman and we were talking about tax credits on this floor. And I think that some of us were saying that talking about tax credits on the floor is kind of like cussing in church – it’s something you just don’t do. And I can also tell you that one thing that I said then, I’m going to say it again today, and that is that all tax credits are not created equal.”
The plan received bipartisan support and opposition. State Rep. Pattie Mansur, D-Kansas City, threw her support behind it.
“We in this chamber want everyone to pull themselves up by their bootstraps. We expect them to work and participate in the economy. But if we don’t provide a quality solution for mothers and fathers, then we are leaving families without the ability to do the very thing that we demand of them.”
“This bill is a top priority of the business community,” said Kara Corches, president and CEO of the Missouri Chamber.
According to a report from the U.S. Chamber of Commerce Foundation and the Missouri Chamber, the Show Me State misses out on an estimated $1.35 billion annually, including $280 million in lost tax revenue, due to what the state Chamber refers to as a childcare crisis.
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.
Many of the House’s opposing votes are from ultra conservatives, who are often against tax credits of any kind.
State Rep. John Martin, R-Columbia, calls the bill “a band-aid at best.”
“I’m still very concerned of the role of government in this area. It may help motivate investment, I understand that. Yet as a business owner, I currently have the freedom to do this, as do other businesses. Government has a history of distorting the market, raising costs, as seen in many other areas of our society when we expand governmental priorities. Families struggle affording childcare, but can Missouri government afford this,” asked Martin.
Under the proposal, the program would expire in six years. The expiration would help future lawmakers determine if the program was effective and should be renewed.
House Bill 2409 now goes to the Missouri Senate for more hoops to jump through. Last year, a few ultra conservative Senators blocked the bill’s passage.
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