On Wednesday, two bills were introduced by U.S. Senators Katie Britt (R-Ala.) and Tim Kaine (D-Va.) in an effort to assist families, workers, and businesses in the face of the expanding child care crisis.
The proposed legislation aims to increase the accessibility and affordability of child care for families, provide financial incentives for child care workers, and encourage businesses to offer child care services. The bills include measures to expand tax credits for parents and provide more resources for local businesses.
On Wednesday, Britt expressed that her and her husband, Wesley, faced their own obstacles when navigating the world of parenthood. She believes that their proposed legislation, which focuses on improving affordability and accessibility, has the potential to help ease financial burdens for hard-working parents.
According to the Center of American Progress, over 50% of American families currently reside in child care deserts. Shockingly, in 2022, nearly 85,000 families in Alabama required access to child care but were unable to find affordable and high-quality options within their communities. This data was reported by the Women’s Foundation of Alabama.
Families have been facing tough decisions when it comes to child care costs, which have skyrocketed by 220% in the last thirty years. In Alabama, mothers have reported having to make difficult choices such as filing for bankruptcy or choosing between buying household necessities and paying for child care. It’s clear that the rising cost of child care has put a significant financial strain on families, leaving them with limited options.
According to a report by the Council for a Strong America, the country’s economy suffers a significant loss of $122 billion annually due to the choices made.
Britt explained that with the exorbitant cost of child care, many parents are left with no choice but to question the financial feasibility of returning to work. For some, it’s simply unaffordable, making it an unrealistic option.
Furthermore, child care workers are facing financial challenges as they strive to make ends meet. Sadly, many have even decided to leave the industry in search of better-paying jobs. Additionally, child care providers are finding it difficult to keep their businesses running due to financial constraints.
According to Britt, the new legislation will bring relief to all parties involved. Senator Kaine expressed his pride in working on this matter in a news release.
Camille Bennett, the founder and executive director of Project Say Something and three child care centers in North Alabama, has pointed out that previous tax credit programs offered in Alabama have mainly favored big businesses. As a result, low-income families and child care workers have been excluded from benefiting from these programs, which are meant to stabilize the industry.
According to Britt, the legislation has a good chance of passing and she considers it to be a realistic proposal.
The proposed legislation aims to enhance the Child and Dependent Care Tax Credit, which is distinct from the current Child Tax Credit. By making the credit refundable, it would enable working families with lower incomes and child care expenses to take advantage of it. As per the proposal, families with one child could benefit from a maximum tax credit of $2,500, while families with two or more children could receive up to $4,000.
Families who benefit from the Dependent Care Assistance Program would now be able to deduct 50% more in expenses, up to $7,500, as per the proposal. This would make the program stronger and more beneficial for those who rely on it for their dependent care needs.
Britt proposes enhancing the Employer-Provided Child Care Tax Credit to incentivize companies to offer child care services to their employees. The suggested implementation includes raising the maximum credit from $150,000 to $500,000 and increasing the percentage of expenses covered from 25% to 50%.
Small businesses will receive a bigger incentive under the new legislation, with a maximum credit of $600,000. Additionally, groups of small businesses will now be able to jointly apply for the credit, allowing them to pool their resources.
According to Britt, the small businesses that line the main streets of our state are what give each community its unique character. It’s crucial that these businesses not only survive but thrive, which is why he believes that the proposed changes could be a game changer for so many of them.
The Child Care Workforce Act is set to bring relief to child care workers by initiating a competitive grant program for states, localities, tribes, and tribal organizations. This program will give them the opportunity to adopt or expand pay supplement programs for child care workers, which will help reduce turnover.
