The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.
A host of bills meant to improve the child care system in Ohio are currently making their way through the legislature, some partnering employers and the state, and some aiming to lift a tax burden off Ohio parents.
State Rep. Andrea White, R-Kettering, recently spent time in the Ohio House Ways and Means Committee, introducing a trio of bills, all three of which deal with tax credits for businesses and households related to child care.
“These bills are all about coming together for us to help our employers and our families figure out how do we solve this staggering workforce crisis and this staggering child care crisis,” White told the committee.
House Bill 576
Joined by fellow Rep. Cindy Abrams, R-Harrison, White brought House Bill 576, which would supplement federal tax credits “associated with acquiring, constructing, rehabilitating or expanding property used as the employer taxpayer’s qualified child care facility,” operating expenses for child care workers and “qualified resource and referral expenditures,” which can include contracts with child care facilities.
Federal tax credits can cover up to $150,000 per employer, but to receive the maximum federal tax credit, businesses have to spend at least $600,000, Abrams told the committee.
“Ohio’s small businesses, businesses with smaller profit margins and those without a federal tax liability – for example, nonprofits – are not incentivized to invest in this area with the tax credit in its current structure,” Abrams said.
Under H.B. 576, the state would fill the gap by creating a deduction to cover up to $500,000, and would expand eligible expenses to include direct contributions to an employee for child care expenses or other things employers could do to help.
“So that way it’s much more flexible, and it also enables smaller businesses who want to make it part of their employee benefits package, perhaps,” White told the committee.
House Bill 577
Tax credits for parents would fall under a different bill sponsored by White, House Bill 577. That bill would bring Ohio up to par with 30 other states currently allowing a child care tax credit for parents.
“You may already know Ohio is scraping the bottom when it comes to subsidizing child care for lower-wage working families,” White wrote in her testimony on the bill.
The new bill would offer $3,000 per child or up to $6,000 per family in tax credits specifically for child care. The bill would credit “eligible employment-related child care expenses” on a sliding scale, from full credit for lower income households down to a 10% of available credits for “high wage earners,” defined at more than 700% of the federal poverty line, according to the bill’s sponsor.
White told the committee the “economic boon” in Ohio could be hindered by a lack of child care options, especially the 40% of Ohio residents who live in regions with few or no options for child care.
“It’s kind of like, you can have the job, but if you don’t have the skills to get the job and you don’t have the transportation or the child care to ensure that you can make it to work every day, we will never be able to fill these jobs that we have been so fortunate to attract in Ohio,” White said.
Democrats on the committee praised the bills for their focus on improving child care affordability for Ohioans, which they said was a needed target to improve the state’s workforce numbers and economy.
“This is, if not the number one issue I hear about from constituents, it’s up there,” said state Rep. Dani Isaacsohn, D-Cincinnati. “If you have a kid under 5 in Ohio, this is your number one expense.”
Isaacsohn is a co-sponsor of a different bill on the same topic, which White noted as part of the discussion on the state of child care in the state. House Bill 570, also sponsored by state Rep. Bride Rose Sweeney, D-Westlake, was introduced last month and aims to provide publicly funded child care to child care staff members themselves.
Child care advocates have often decried a lack of affordability for child care, even for those who work in the field.
But Isaacson’s bill may have a harder time getting through to passage than the Republican-led bills, based on the GOP supermajority in both chambers at the statehouse.
Similarly, state Dems introduced their own version of a family tax credit in October of last year, but it has yet to see action after being assigned to the same committee where White’s bills are currently under consideration.
House Bill 578
The third bill White brought before the Ways and Means Committee seeks to empower taxpayers to throw their support toward child care providers.
H.B. 578 would create a nonrefundable tax credit for Ohioans who “make a financial contribution to a qualified child care provider, including family home or center-based child care providers and day camps,” according to White.
The credit would cap at $100,000, equal to half the total value of the contributions.
Donors won’t be allowed credit for payments to their own child care providers, but employers can get a discount on employee child care rates as incentive for donations under the bill.
One state in particular inspired the bill. White told the Ways and Means Committee Colorado invested $30 million in “similar tax credits” and produced $60 million per year in “private investment in child care capacity.”
“A proposition that doubles your money is certainly one I would deem worthy for this committee of financially-minded individuals to consider,” White’s testimony stated.
Cost-sharing model
Loading up the child care bills further are companion bills in the House and Senate which would create a cost-sharing model, splitting the cost of child care between employees, employers and the state.
State Sen. Michele Reynolds, R-Canal Winchester, announced Senate Bill 273at the end of May, and introduced the bill last week in the Senate Workforce and Higher Education Committee. Reynolds told the committee the high cost of child care “has become an overwhelming burden for countless families,” with an average cost for an infant and a four-year-old sitting at $18,277. The bill sponsor said despite the publicly funded child care offered in the state, “current state support is inadequate.”
“This financial strain has forced many parents, especially mothers, to reduce their working hours or leave their jobs entirely to manage child care responsibilities,” according to Reynolds.
On Thursday, the House version of Reynolds’ bill will be introduced by state Rep. Mark Johnson, R-Chillicothe, in the House Finance Committee. Johnson joined Reynolds in announcing the bills, while also admitting “it’s not a silver bullet to fix all child care.”
But, he said when the bills were announced, the measure is a step toward stabilization for child care providers, and comes with the support of the Ohio Chamber of Commerce and advocacy group Groundwork Ohio.
