A bill that would create tax credits designed to make child care more affordable and accessible won initial approval Tuesday from the Missouri House.
The bill will need to be approved one more time by the House before it heads to the Missouri Senate.
The state continues to grapple with a child care crisis, with about 200,000 children living in parts of Missouri considered “child care deserts” because there are one or fewer child care slots available for every three children.
The bill, refiled this year by Republican state Rep. Brenda Shields of St. Joseph, would offer three types of credits: for taxpayers who donate to support child care centers, for employers who make investments in child care needs for their employees and for child care providers.
The same legislation was also filed by Democratic state Sen. Lauren Arthur of Kansas City, and was approved by a committee last month.
During Tuesday’s debate, Shields cited a 2021 U.S. Chamber of Commerce Foundation study that found lack of accessible and quality child care forced many Missouri parents to change or leave their workplace. The foundation determined this workforce disruption cost the state more than $1.3 billion annually.
“Affordable, reliable, safe, child care is an important infrastructure in our state,” Shields said. “Just as important as roads, rails and the Missouri and Mississippi Rivers.”
Shields called on the legislation’s “innovative solution” as a means to bring together communities and businesses through the following tax programs:
The “Child Care Contribution” tax credit would allow donors to child care providers to receive a credit equal to 75% of a qualifying donation, up to a $200,000 tax credit. The provider must use the donation to “promote child care” including by improving facilities, staff salaries or training.
The “Employer Provided Child Care Assistance” is aimed at creating partnerships between businesses whose employees need child care and providers. It would allow employers to receive tax credits equivalent to 30% of qualifying child care expenditures.
The “Child Care Providers Tax Credit” would allow child care providers to claim a tax credit equal to the provider’s employer withholding tax and up to 30% of a provider’s capital expenditures on costs like expanding or renovating their facilities.
“We want people working, we want people to come here and expand their businesses, and this is one of the main things that needs to get done,” state Rep. Bridget Walsh Moore, a Democrat from St. Louis, said in support of the bill. “Times are desperate.”
The average cost of full-time center-based care for an infant in Missouri was $11,059 as of 2022, according to Child Care Aware. Meanwhile, it can be difficult to hire and retain staff, who often make barely over minimum wage.
Gov. Mike Parson has also been a champion of the tax credits, saying the issue transcends party lines.
In his State of the State address last month, Parson highlighted a $51.7 million budget increase to the child care subsidy program for low-income children. Last year he supported a $78 million boost to child care subsidies to encourage child care providers to offer services to low-income and foster families and another $81 million for state-funded pre-kindergarten targeted at low-income four-year-olds.
“Today, we have the capacity to serve just 39% of Missouri children in licensed facilities,” Parson said at the address. “It’s time for change.”
The legislation has been promoted primarily as a workforce issue and gained support from child advocacy organizations, chambers of commerce and business groups. This year, no one testified against the bill at the Senate committee hearing. Dozens testified in support at the House hearing, with only one person opposed.
A set of similar child care tax credits almost passed last year, but ultimately stalled when dysfunction and filibusters derailed the Senate in the 2023 legislative session’s final week.”
While Shields’ bill is making progress in the House, some advocates worry the bill could again be killed by a divided Senate. Shields told reporters Monday that she is optimistic the bill’s chances are better this year because the House is moving it over to the Senate earlier in the session than last year.
