HARRISBURG (TNS) — A bill that would give tax credits to employers for helping employees with child care expenses passed in the House with bipartisan support and is headed to the Senate, as lawmakers aim to help families confronted by a staff-starved child care system.
“Our child care system in this commonwealth is very fragile” and at risk of failing, Rep. Liz Hanbidge, D-Montgomery, and a prime sponsor, said on the House floor on Wednesday. Moments later, members voted 155-47 to approve the bill, with all Democrats and 53 Republicans in favor.
Employers would get a tax credit equal to 30% of the aggregate contribution they made to employees’ child care expenses during a tax year, with only the first $500 in contributions per employee counting toward the total used in the determination.
The bill now goes to the Republican-dominated Senate for consideration. A spokesperson for Gov. Josh Shapiro, Will Simons, said Shapiro “will continue to monitor this legislation.”
Shapiro wants to cut costs for Pennsylvanians, Simons said, and that is why he signed a child care tax credit expansion last year that was the largest in state history.
The biggest single problem in Pennsylvania child care is a staffing shortage, according to Diane Barber, executive director of the Pennsylvania Child Care Association.
She said she supports the tax credit bill because it will help some families that pay for child care. “But it doesn’t help families that don’t have child care,” she said.
Because they cannot find employees, some child care centers have closed their most labor-intensive rooms: the ones for infants up to 12 months. Those rooms require a minimum of one staff member per four children, while pre-school rooms have a state-set minimum ratio of one-to-ten.
“So new mothers going back to work can’t find care,” Barber said.
She would like to see the Legislature approve another bill from Hanbidge that would set up a state fund that would help pay child care costs for eligible residents via a “public private partnership.” That bill is awaiting consideration in the House.
Among those who voted ‘no’ in the House on the tax credit bill was Rep. Eric Davanzo, R-Westmoreland. While he liked the concept, he noted the vote came about 40 days before the deadline for approval of a state budget.
“We don’t know what that budget looks like,” Davanzo said. Beyond that, he said, some employers said they did not believe the proposed tax credit was large enough.
“It was one of those bills that didn’t sit well,” Davanzo said.
Rep. Lou Schmitt, R-Blair, another ‘no’ vote, said there were unanswered questions about how the tax credit would be applied.
Democrats pointed to a study that found Pennsylvania loses an estimated $3.47 billion each year as a result of insufficient child care. A Democratic co-prime sponsor, Rep. Morgan Cephas of Philadelphia, said in a written statement the tax incentive would push employers to put child care assistance in their strategic plans, “creating a more stable work force.”
The bill may be steered to the Senate Finance Committee, where minority Chairman Nick Miller, D-Lehigh, favors the concept. In an interview, he cited staffing troubles in the industry and said the tax credit’s use by businesses would “make them more competitive against companies in other states.”
Miller said he thinks the bill will get support from both parties in the Senate.
Republican Sen. Pat Stefano of Fayette County, a co-chair of the informal Early Childhood Education Caucus, said family access to child care is crucial.
“However, we must remember that our child care providers are facing severe staffing shortages, leaving them unable to adequately meet the demands of our families and our work force,” Stefano said. “Making child care affordable is essential, but it won’t necessarily eliminate years-long waitlists and inaccessibility.”
