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Hochul dangles $500M to child care providers

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(The Center Square) — New York Gov. Kathy Hochul is offering $500 million in cash bonuses and other incentives to buoy the state’s beleaguered child care workforce.

The plan, which first term Democrat rolled out on Thursday, authorizes grants for child care providers who can use the money to provide bonus payments ranging from $2,300 to $3,000 to staff in caregiving roles and offer sign-on and referral bonuses to recruit new workers. The spending was approved as part of the $229 billion fiscal year 2024 state budget.

Hochul said the new grant program will “grow and support our child care workforce as we continue working to expand access to this essential service for families across our state.”

“As a mother who put her career on pause due to a lack of affordable child care, I understand first-hand how much not having access to these services can affect a family,” she said.

Overall, the lack of child care options in New York is costing working families, some of whom are spending 20% to 40% of their annual income on programs.

The average cost of child care is $15,394 a year in New York, the sixth-most expensive state in the nation, according to a recent report by the Economic Policy Institute.

A typical family in New York would have to spend 39.8% of its income on child care for an infant and a 4-year-old, according to the report. Child care costs in New York City are even higher.

Many child care providers are financially strained in the wake of the COVID-19 pandemic, and advocates say low compensation and the rising costs of caring for children are putting some providers out of business.

Meanwhile, early education providers struggle to retain workers in an industry where the pay is traditionally low, and health risks are elevated.

New York lawmakers recently approved a plan to spend $4.8 million to create a new Employer-Sponsored Child Care Pilot Program that splits the cost of child care between employers, employees and the state’s taxpayers. Families must earn between 85% and 100% of the state’s $69,651 annual median income to qualify.

Another measure created a new Employer Child Care Tax Credit for businesses that creates new child care seats for their workers. The $25 million annual credit will be administered by the New York State Department of Taxation and Finance and the New York State Office of Children and Family Services, the Hochul administration said.

Lawmakers also expanded the Empire State Child Credit to include children under 4 years of age, which Hochul says will provide $179 million to cover child care costs for more than 525,000 low- and middle-income taxpayers and 630,000 additional children. The program provides an average benefit of $340 per taxpayer and $284 for every new child.

Hochul has clashed with fellow Democrats and child care advocates over a proposal floated by lawmakers during budget negotiations, which called for spending $5 billion for a universal child care system for all New York families, regardless of income or immigration status.

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