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Employer child care tax credit up for discussion

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(The Center Square) – Pennsylvania families left in the difficult position of securing affordable child care may see some relief through employer contributions.

The House Finance Committee met this week to discuss a bill to create a tax incentive for participating employers.

“We have an industry that’s not sufficiently supported, but we also have families who can’t afford child care,” said Rep. Liz Hanbridge, D-Blue Bell, one of the bill’s co-sponsors.

Hanbridge noted the irony as she spoke remotely from her home, where she was addressing her own child care needs.

For many women, work outside the home becomes untenable due to the cost and availability of child care, forcing them to postpone, pause or end careers. Hanbridge stated that in the United States, the percentage of women in the workforce hangs in the low 70s relative to much higher percentiles among European counterparts.

Chester County Chamber of Business and Industry President and CEO Laura Manion, who addressed the hearing remotely while on maternity leave herself, emphasized that the bill will “not only help employers retract and retain quality candidates who might otherwise not be able to enter the workforce but to also ease the financial burdens on parents who genuinely want to get back to work.”

Manion explained that employers want to help their employees with child care, but they “just don’t know how.”

The bill as currently written would allow employers to deduct up to 110% of their aggregate contributions to an employee’s child care costs.

Rep. Steve Samuelson, D-Bethlehem, said that an amendment would soon be proposed vote to change the incentive to a tax credit. The credit would be available to employers whose workers receive child care from providers regulated by the state.

Dr. Lesley Spina, executive director of Kinder Academy, testified about the benefits of investing in early childhood education.

“For every dollar spent on childhood education, we save between 7 and 13 dollars over the child’s lifetime,” she said.

In order to make that impact, however, families need to be able to place their children in centers, and centers need to be able to attract and retain staff. Child care providers are currently carrying over 4,000 vacancies across the commonwealth with many centers shutting down under the pressure.

“We always need to remember that while we do this really amazing work, it is a business,” said Spina, who noted that the child care industry has the “lowest pay scale of all professional industries” with the average wage falling under $13 per hour.

Incentivizing employers to contribute to child care, she believes, could help to get early childhood educators closer to parity with their counterparts teaching in K-12.

Spina cited additional strains to the early childhood education system including increased insurance rates, increased numbers of children with behavioral challenges, increased threats of violence in the community, and increased levels of poverty.

Diane Barber, Executive Director of PA Child Care Association made it clear that while the bill would be welcomed, it would not be enough to solve the current crisis. For thousands of families, the issue of affordability is secondary to the issue of availability with most centers forced to put eager parents on waitlists.

“We need investment that is substantial and sustainable,” said Barber.

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