Leaders in the child care services industry say they require more than $700 million from the state every year to meet need. The proposed 2024-25 budget for child care services doesn’t come close.
But one section in the proposal seeks to attract new funding for child care from a different source: the private sector.
Gov. Ned Lamont’s budget included a 25% tax credit that businesses could apply toward the cost of building on-site child care facilities or providing child care subsidies for their employees.
The legislature expanded on the governor’s proposal in its revenue and spending bills, released last week. In addition to on-site child care and subsidies to staff, businesses would also be able to write off 25% of any funds they contribute to nonprofit child care centers in their communities.
Child care providers applauded the legislature’s change, saying support for their sector should start by bolstering providers that are already there. Encouraging companies to construct new facilities or offer subsidies wouldn’t address systemic staffing and capacity problems in the sector, they said.
“There’s an existing industry that is doing this work really well, with not nearly enough resources or support,” said Jessica Sager, chief executive of All Our Kin, a group representing home-based child care providers. “We should think about this as a way to get them more resources, rather than build something new and different.”
The sector has struggled for years to recruit and retain teachers and to grow to meet Connecticut families’ needs. About one in four working households in the state have children under the age of 6, and the state was already short 50,000 infant and toddler care slots before the pandemic.
The proposed budget for the coming biennium includes over $100 million in additional funding, but advocates say that’s not enough to help build the workforce pipeline for early childhood teachers and pay wages that would attract more people to the field. Further funding would be needed to help working families pay for care, they said.
Connecticut’s business community has joined child care advocates in calling on the legislature to boost support for early childhood. Since the COVID-19 pandemic lockdown and recession, child care has become a focal point for employers looking to draw parents back into the workforce.
Lamont has responded by inviting businesses to help solve the state’s child care crisis. In addition to proposing the 25% corporation tax credit this year, the governor established a panel of public and private sector leaders, experts, educators and parents to develop a strategic plan for the sector.
During a visit to the Women’s League Child Development Center in Hartford with the governor earlier this year, Connecticut Business and Industry Association President Chris DiPentima said child care is “the workforce behind the workforce.”
“To grow our economy in Connecticut, to create jobs in Connecticut, child care is just as important as highways and bridges, broadband and the rest of the infrastructure we need,” DiPentima said. “If we’re going to have world class businesses, which we do, and the world class workforce, which we do, we need that world class infrastructure, and child care is a critical part of that.”
Proceeding with care
Leaders in the early childhood sector have welcomed the support of private industry, but they caution that some forms of assistance could cause more harm than good.
At a panel at the state Legislative Office Building last week, Georgia Goldburn, director of child development center Hope for New Haven, said any new policies and funding directed toward the sector must recognize and prioritize the women — primarily women of color — who established and sustained the industry for generations.
“This industry has really evolved from the sacrifice of women, and more especially Black women — sacrifices built on the backs of women who started this in their homes,” Goldburn said. “There is no equitable system that can go forward that does not preserve the ownership of those women.”
Elliot Haspel, a national child policy researcher who also spoke on the panel, said companies offering on-site child care might sound good in theory, but there are several drawbacks. For one, it puts employees in a position where they could lose their child care if they lose the job or seek work elsewhere. Second, depending on the size of the company, it may not be able to provide enough child care capacity for everyone on staff who needs it.
Overall, it’s a less stable system, Haspel said. “We know economic conditions change, leadership changes, and … we have seen several examples throughout the country of large employers who used to offer child care benefits suddenly backing off.”
Haspel also noted that employer-provided subsidies, to offset the cost of outside child care, don’t solve the underlying problem of strained capacity in the system.
“You’re still going to see increasingly long waitlists, you’re still going to see increasing numbers of program closures, you’re still going to see increasing amount of turnover of employees, which again is really bad for quality and child development,” he said.
Business tax credit tweak
The legislature’s addition of nonprofit funding — specifically, “donations or capital contributions to nonprofits for acquiring, constructing, or improving child care centers for use by children residing in the community” — seeks to solve for the issues advocates raised.
“We were trying to expand it so we’ll still have child care that will abide in the community should the corporation go elsewhere,” said Rep. Maria Horn, a Salisbury Democrat who co-chairs the Finance, Revenue and Bonding Committee, which proposed the language.
Merrill Gay, executive director of the Connecticut Early Childhood Alliance, said, “We prefer, if companies are going to invest in child care, that they invest in a community asset and negotiate a deal to get their employees into that community child care that they’re helping to build.” Gay added that he’s confident the language will remain intact as the budget moves through negotiations in the coming weeks.
In an emailed comment, a representative for the governor’s office wrote: “Expanding affordable childcare and getting parents back to work are essential goals Governor Lamont shares with the legislature. That’s why he put a practical plan on the table — one that helps families right now and invests in a future that works for all. In the coming weeks, we’ll work with the legislature to achieve these goals to help build growth and opportunity for Connecticut’s families and businesses.”
Sager of All Our Kin, who is a member of the governor’s Blue Ribbon Panel working on solutions to the child care crisis, said she’s optimistic about the ideas the panel is working to develop. But she said she sees private sector incentives as only a part of the solution, not as a substitute for public funding.
“It might help, but it won’t solve it,” Sager said. “There’s just going to be too many parents and children who are not connected to these employers and have urgent need for care.”