Early childhood education tax credits proposed
Parents whose children attend qualifying early childhood education programs would be eligible for a tax credit under a bill heard by the Revenue Committee Feb. 3.
LB889, introduced by Omaha Sen. Heath Mello, would create four tiered tax credits related to early childhood care and education. These would include credits for:
• parents whose children attend eligible programs;
• providers of eligible programs;
• staff members of those programs; and
• businesses that support those programs.
A child care or early childhood education program would have to be assigned a quality rating under the Step Up to Quality Child Care Act to be eligible for the credit. The program’s quality rating would determine the amount of credit the parent or provider receives.
Business expenses eligible for the credit include payments made to an eligible program on behalf of employees, construction or expansion of a facility that houses an eligible program and the purchase of equipment.
The bill also would direct the state Department of Education to develop a classification system for employees of applicable early childhood care and education programs. An employee’s rating would be based on his or her level of education, training and work history. The rating would determine the amount of credit the employee receives.
The credits would become effective in January 2017. The bill would reduce tax revenue by approximately $10.1 million in fiscal year 2017-2018 and $16.4 million in FY2018-2019.
Mello said early childhood plays a crucial role in a person’s future success and contributes to the development of Nebraska’s future workforce and economic growth. He said approximately 75 percent of Nebraska children younger than 6 have both parents working outside the home, but many working families cannot afford quality child care because of its high cost. Mello said the proposed tax credits would give more low-income families access to high-quality early childhood care and education programs.
“It’s a poorly funded education system,” he said. “It’s stratified purely on an individual family’s ability to pay for better care.”
Sarah Ann Kotchian, director of early childhood policy and public relations for the Holland Children’s Movement, spoke in support of the bill. She said giving child care workers a financial incentive to improve their education and training would raise the overall quality of early childhood care and education programs in the state. It also would assist workers in an industry where wages increased only 1 percent from 1997 to 2013, Kotchian added.
“Child care workers are some of the lowest paid workers in the country despite their essential role in educating and nurturing young children during an astonishing period of brain development,” she said. “With such low wages, it will continue to be difficult if not impossible to attract and retain good teachers.”
Geoffrey Nagle, president and CEO of the Erikson Institute, also testified in support of the bill. Nagle worked with the Louisiana Legislature to create and implement the system of early childhood education tax credits on which LB889 is based.
After Louisiana implemented its system in 2008, Nagle said, the state saw a 600 percent increase in the number of low-income children with access to quality care. The number of child care centers above the minimum quality level increased by more than 400 percent, he added.
“Ultimately this legislation sends a message of support to the child care sector of your commitment to quality,” he said. “It’s a great investment in economic development and it impacts every district in this state.”
No one spoke in opposition to the bill and the committee took no immediate action on it.
