Childcare tax credits face an uphill battle in the Missouri Senate

A bipartisan package of tax breaks for child care, championed by Gov. Mike Parson, has drawn fierce opposition from conservative lawmakers

For the second year in a row, the fate of a bill creating new tax breaks for child care — one of Gov. Mike Parson’s top legislative priorities — rests in the hands of a faction of Republicans in the Missouri Senate.

The child care tax credit package, designed to help improve access and affordability of child care, has received bipartisan support and was the first bill passed by the House of Representatives this year.

But that bill, sponsored by Republican state Rep. Brenda Shields of St. Joseph, stalled in the Senate. Democratic state Sen. Lauren Arthur’s version of the bill has fared no better.

With the legislative session ending Friday at 6 p.m. and a stalemate expected in the Senate, the bill is unlikely to end up on the governor’s desk.

A similar dynamic killed the legislation last year.

“There remains hope,” Arthur said on Friday. “But things are still up in the air.”

The governor has promoted the legislation as a way to help parents enter the workforce, highlighting the proposal in his last two State of the State addresses to the Legislature. The legislation has also received support from children’s advocacy groups, chambers of commerce and business groups, and faced little opposition in committee hearings this year.

Casey Hanson, director of outreach and engagement at the nonprofit Kids Win Missouri, which is supporting the legislation, said she is trying to remain optimistic.

But this session, Hanson said, is looking more and more like 2023.

“Same roadblocks. Same characters,” she said. “Different year.”

‘It’s well-being’

A proposal by Arthur to add the child care tax credit to another bill, as an amendment, was rejected by the Missouri Freedom Caucus last week.

Sen. Bill Eigel, a Republican from Weldon Spring who is running for governor, characterized Parson’s childcare priorities as promoting bigger government and called it “a great time to be a Democrat in Jefferson City.” ”

“… And it is not intended to actually protect the rights of the children. In this case, it’s to give them something,” Eigel continued. “In this case we want to give away free childcare.”

Senator Rick Brattin, a Harrisonville Republican and member of the Freedom Caucus, also spoke out against the proposal, saying that “the administration created all the regulations that have literally decimated the child care industry” and now the administration is trying to “step in” to to fix a problem that caused it.

State Sen. Mike Moon, a Republican from Ash Grove, later piled on.

“I think it’s a benefit,” Moon said, adding that he and his wife decided years ago that she would stay home with their children. “We must create an environment where our families can care for themselves and their children at their own expense.”

Eigel has hinted at a possible compromise between the Freedom Caucus and the sponsors of the child care tax credit legislation. Arthur said she has been in constant discussions with him about finding a compromise between his desire for property tax cuts and her child care tax credits.

But she admitted that their idea of ​​a reasonable middle ground will likely be very different.

“I am frustrated that I have to defend legislation that working families desperately want,” Arthur said. “Meanwhile, my male colleagues are coming out and criticizing the idea that the government will play a role in making childcare affordable and available.”

But the most likely obstacle to the legislation ultimately ending up on the governor’s desk is a bill in the Senate that hopes to make it harder to change the state Constitution through citizen-led petitions.

That top priority for Republicans will likely lead to conflict between the parties in the final week of the session, potentially blocking other legislation.

Democrats have vowed to filibuster the legislation as Republicans threaten to invoke an unpopular and rarely used tactic called moving the “previous question” to force a vote on the bill.

If Republicans do that, Arthur said Friday, “they will ultimately decide that nothing else will be done.”

‘I can’t find care’

As the Senate heads toward its session deadline, emails in support of her child care tax credit continue to flood Shields’ inbox.

“It is not affordable for me to go to work,” some say. Others send pleas: “I can’t find care.”

Those who have been able to find affordable child care regret that the quality of care does not meet their standards. Other Missourians told stories of their child care provider closing their doors with less than 30 days’ notice, leaving them looking for a new provider.

Shields often cites a 2021 U.S. Chamber of Commerce study that found a lack of accessible and quality child care forced many Missouri parents to change or leave their workplaces. The foundation found that this workforce disruption costs the state more than $1.3 billion annually.

She sympathizes with those families. Thirty-five years ago, Shields said, she faced a similar choice between her career and motherhood. She wanted them both, and thanks to a last-minute daycare opening in St. Joseph, she got them both.

A study of child care spending by The Independent and MuckRock last year found that nearly half of Missouri’s children under the age of five, or about 202,000 children, live in child care deserts, with one or fewer child care openings for every three children.

According to Child Care Aware, the average cost of full-time center care for an infant in Missouri in 2022 was $11,059. Meanwhile, staff in child care facilities often earn just over minimum wage, posing a challenge for hiring and retention.

“If we want to grow our economy,” Shields told The Independent on Wednesday. “It requires us to help people get back to work.”

Her bill would add three tax credits:

  • The “Child Care Contribution” tax credit would allow those who donate to child care providers to receive a credit equal to 75% of their donation, up to a maximum of $200,000 in tax credits;
  • The “employer-provided child care assistance” would encourage partnerships between companies whose employees require child care and providers, by allowing employers to receive tax credits equal to 30% of eligible child care expenses;
  • The “Childcare Provider Tax Credit” allows childcare providers to claim a tax credit equal to the provider’s employer’s withholding tax and up to 30% of a provider’s capital expenditure on costs such as expanding or renovating their facilities.

Kids Win Missouri recently started a community project highlighting child care needs in several counties across the state. This included Shields’ hometown of St. Joseph.

When surveying community members and providers, they found that there are only enough childcare spaces available for 29% of infants and toddlers, and for 69% of preschoolers and 53% of other preschoolers. Families in the province spend on average at least 20% of their income on childcare costs.

Surviving this “huge societal crisis,” Hanson said, with Kids Win Missouri will take everyone, especially as the state approaches a “fiscal cliff” that now leaves it without the same levels of COVID-era federal funding .

Childcare subsidies

Parson’s push to expand access to child care also included increasing payments for subsidized care. To fund this, Parson asked lawmakers for an additional $51.7 million in the coming year, which followed a $78 million increase in funding in the current year.

Ultimately, the increase was funded, but not in the way the governor requested.

The budget includes language authorizing higher rates, House Budget Committee Chairman Cody Smith said at a news conference after the budget was passed.

The additional funding Parson sought was based on every eligible parent using its benefits, Smith said. Instead, the budget allows for higher rates by assuming some of the money would otherwise not be spent.

If demand for the subsidy increases, lawmakers will have to come back to the table to discuss ways to continue funding the increase in the future.

House Minority Leader Crystal Quade said Democrats are still trying to calculate whether there are funding shortfalls.

Quade said that despite child care being a persistent problem, lawmakers have failed to address the shortage in a meaningful way.

“We know there are too many Republicans in positions of power in this state who do not believe that I have a voice in this chamber, that I should not be elected, that I should be standing here as a mother, and that I should be home,” Quade said . said. “And I’m tired of them telling us that.”

Rudi Keller of The Independent contributed. This story was first published on