Tax credit? Allow more kids per adult? Utah considers how to help families afford child care

Lawmakers are weighing how to expand access for parents.

(Francisco Kjolseth | The Salt Lake Tribune) Flor Barragan spends time with Danna Reyes, 7 months old, as she gets some relief with a cold teething toy on Thursday, Sept. 23, at PC Tots in Park City. State lawmakers are considering proposals to alleviate the child care shortage in Utah.

State lawmakers are finalizing a list of ideas about how to alleviate Utah’s child care shortage, and Sen. Derek Kitchen said he thinks one item in particular may be the “the crown jewel” of their efforts.

Utahns could receive a nonrefundable individual income tax credit for children ages zero to 5, ranging between $300 to $500 per child, per year, if legislators move forward with a proposal outlined in a recent meeting of the Economic Development and Workforce Services Interim Committee.

This “will truly give families, especially young families, options for child care” based on what they need, said Kitchen, D-Salt Lake City.

Rep. Susan Pulsipher agreed, saying it will give families flexibility and control. They could choose to send their kids to a center or a program at their workplace, or maybe to “a neighbor down the road” who provides care at their home, she explained.

“Or, it could be one of the parents staying home and using that money to help care for their own children,” or even a relative or grandparent, said Pulsipher, R-South Jordan.

The tax credit would be scaled based on income, she said. Lower income households would receive the full amount, and higher earners would receive 80% of the credit. Those who make more than $100,000 would be ineligible.

In most counties in the Beehive State, both rural and urban, full-time child care for one child costs a family 10% to 20% of the median annual income, according to a market rate study released in May by the Utah Office of Child Care. Parents spend about $999 a month at a licensed center for children up to 2 years old, and rates decrease by age, to roughly $620 for children 6 and older, the report shows.

While licensed family and residential providers are slightly cheaper in Utah, families still spend well over $500 a month for care, according to the report.

Utah’s proposed child tax credit is modeled after a program in North Carolina, but other states have also done this, according to Pulsipher. In North Carolina, families can receive up to $125 per year per child.

The initiative in Utah would cost between $42 million to $65 million per year from the education fund, according to the Office of Legislative Research and General Counsel.

Before the coronavirus pandemic, Utah’s system of providers was meeting only about a third of the need for child care in the state, according to a report from the Office of Child Care. The problem was amplified during the spread of COVID-19, as parents — especially mothers — struggled to juggle caregiving responsibilities with work when day care facilities and schools were closed.

The legislative committee made studying child care a priority over the summer. Last week, lawmakers went over eight proposals as the culmination of that work, and they plan to go over draft legislation in November.

Pulsipher noted, though, that this is not the end of the work that needs to be done related to child care. “I think it’s the beginning,” she said.

Help employers interested in offering care

One idea Pulsipher presented is to create an employer child care pilot program. Some small businesses struggle to offer child care to employees, whether off-site or on-site, and Pulsipher said she has heard from school districts interested in child care for teachers.

Through this program, the employer would offer child care to their employees through a contract with a licensed child care provider.

Change the capacity rules

Pulsipher also went over possible ways to allow more flexibility, through updating definitions and shifting restrictions now set by law to administrative rules. Two proposals would benefit rural Utah in particular, Pulsipher said, where there are not as many options for families.

One suggestion is to increase the maximum number of qualifying children that are not related to a residential child care provider from four to six. The other is to allow child care providers to be able to take on additional children after school, such as the older siblings of kids regularly in their care.

When increasing access to child care, it is also important to make sure it is high quality, said Simon Bolivar, administrator of the state’s child care licensing program. Bolivar applauded many of the ideas that lawmakers are considering, but urged some caution.

Bolivar said his department has tried the after-school option in the past, but providers told him it didn’t work, because there were too many children. Instead, Bolivar said they created a separate license for this, and now there are more than 70 programs for children to go to before and after school.

Also, increasing the number of qualifying children from four to six is “not as simple” as it may seem, he said. In March, Bolivar visited a facility where a child died earlier this year. The provider, who was unlicensed, was caring for multiple children, including her own kids and other relatives, he said.

Bolivar told The Salt Lake Tribune about another extreme, but real situation, where a family has 15 children of their own, plus 14 nieces and nephews and four more unrelated children. One person takes care of all of them, he said.

The issue here, according to Bolivar, is that the current statute allows a person to care for up to four children that are not related to them, plus an unlimited number of children who are related, no matter their age or needs.

“That proposal, the four to six, is moving the state backwards. That’s just my warning to you,” Bolivar said, adding that he is willing to work with lawmakers on this.

Pay the carers more

As she did at the committee’s meeting in September, Rep. Carol Spackman Moss, D-Holladay, said again that she thought increasing wages should be included in these proposals.

The median hourly wage for child care workers in Utah is $10.47 per hour, according to the Office of Child Care report. Meanwhile, there is a workforce shortage, Pulsipher said at a previous meeting.

“This has got to be a component, it seems to me, to get people in this field,” Moss said.

Raising wages was not included in the list that Pulsipher went over at the meeting. But Rebecca Banner, director of the Utah Office of Child Care, said that in November, her office will release $250 million in grants to help stabilize the state’s child care industry. Providers could use these grants for employees’ pay, she told the committee.

Becky Jacobs is a Report for America corps member and writes about the status of women in Utah for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.