A number of bills aimed at improving Ohio’s child welfare system are currently making their way through the Legislature, with some working with employers and the state and some aimed at removing the tax burden from Ohio parents.
State Rep. Andrea White, R-Kettering, was recently on the Ohio House Ways and Means Committee introducing three bills, all of which involve tax breaks for businesses and households related to child care.
“All of these bills are intended to bring us together to help our employers and our families figure out how to solve this staggering workforce crisis and this staggering child care crisis,” White told the committee.
House Bill 576
Along with fellow Republican Cindy Abrams, R-Harrison, White introduced House Bill 576, which would supplement federal tax credits “related to the acquisition, construction, renovation, or expansion of property used as a qualified child care facility owned by a taxpayer-owned employer,” operating expenses child welfare workers and “skilled resources and referral expenses”, which may include contracts with child care providers.
Federal tax credits can cover up to $150,000 per employer, but to receive the maximum federal tax credit, companies must spend at least $600,000, Abrams told the committee.
“Ohio small businesses, businesses with tighter profit margins and those without federal tax liability – such as nonprofits – are not incentivized to invest in this area under the current tax credit structure,” Abrams said.
Under HB 576, the state would fill the gap by creating a deduction to cover up to $500,000 and expand eligible expenses to include direct contributions to an employee to cover child care costs or other things the employer could aid with.
“It’s much more flexible this way and also allows for smaller companies that may want to include this in their employee benefits package,” White told the committee.
House Bill 577
The parenting tax credit would fall under another bill sponsored by White, House Bill 577. That bill would bring Ohio in line with 30 other states that currently allow the child care tax credit for parents.
“You may already know that Ohio is hitting rock bottom when it comes to subsidizing child care for lower-wage working families,” White wrote in her testimony on the bill.
The up-to-date bill would provide tax credits of $3,000 per child or up to $6,000 per family specifically for child care. The bill would recognize “qualified employment-related child care expenses” on a sliding scale, ranging from the full credit for lower-income households to 10% of available credits for “high-income individuals,” defined at more than 700% of the federal poverty level according to the author of the project.
White told the committee that Ohio’s “economic recovery” could be hampered by a lack of child care options, especially for the 40% of Ohioans who live in areas where there are few or no child care options.
“It’s kind of like, you can have a job, but if you don’t have the skills to get it and you don’t have the transportation or child care to get you to work every day, we’re never going to be able to fill the jobs that we’ve been fortunate enough to have attract in Ohio,” White said.
Democrats on the committee praised the bills for focusing on improving the affordability of child care for Ohioans, which they say is a goal necessary to improve the state’s workforce and economy.
“This is if not the most important issue I hear from voters, it is certainly a very important one,” said state Rep. Dani Isaacsohn, D-Cincinnati. “If you have a child under 5 in Ohio, this is your number one expense.”
Isaacsohn co-authored another bill on the same topic, which White noted as part of a discussion about 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 workers themselves.
Child care advocates feel this way often decried the lack of affordability of child care, even for those who work in the field.
However, Isaacson’s bill may have a harder time passing than Republican-led bills based on GOP majorities in both chambers of the House of Representatives.
State Democrats introduced something similar its own version of family tax relief last October, but no action has yet been taken because it was assigned to the same committee currently considering White’s bills.
House Bill 578
The third bill that White introduced to the Ways and Means Committee aims to allow taxpayers to donate their support to child care providers.
HB 578 would create a non-refundable tax credit for Ohioans who “contribute financially to a skilled child care facility, including those that provide child care in family homes or centers and at day camps,” according to White.
The credit limit would be $100,000, which is half of the total value of contributions.
Donors will not be able to receive credit for payments to their own child care providers, but employers can receive a discount on employee child care rates as an incentive to donate under the bill.
One state in particular inspired the bill. White told the Ways and Means Committee that Colorado invested $30 million in “similar tax credits” and generated $60 million a year in “private investment in child care opportunities.”
“A proposal that doubles your money would certainly be something I would consider worthy of consideration by a committee of financially minded people,” White said in his testimony.
Cost sharing model
Adding to the burden on the child care bill are companion bills in the House and Senate that would create a cost-sharing model, dividing child care costs among employees, employers and the state.
State Sen. Michele Reynolds, R-Canal Winchester, announced Senate Bill 273 in overdue May, and last week he presented the bill to the Senate Labor and Higher Education Committee. Reynolds told the committee that the high cost of child care “is becoming an overwhelming burden for countless families,” with the average cost of care for an infant and four-year-old being $18,277. The bill’s sponsor said that despite publicly funded child care being offered in the state, “current state support is insufficient.”
“This financial burden has forced many parents, especially mothers, to reduce their working hours or leave their jobs altogether to attend to childcare responsibilities,” says 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 acknowledging that it is “not a silver bullet to fix all child care.”
But, he said after the bills were announced, the measure is a step toward stabilizing child care providers and provides support from the Ohio Chamber of Commerce and the advocacy group Groundwork Ohio.
