Bill would eliminate child care assistance sunset date

The Health and Human Services Committee heard testimony Feb. 6 on a bill that would eliminate a scheduled sunset date on expanded eligibility for the state’s Child Care Subsidy program.

The program provides a subsidy directly to providers to cover a portion of child care expenses for low-income Nebraska families. Income eligibility guidelines were expanded in 2021 from 130% of the federal poverty level to 185%. That expansion is scheduled to expire Oct. 1, 2026.

LB304, sponsored by Sen. Wendy DeBoer of Bennington, would remove the sunset date and instead make the current income eligibility level permanent. If the expansion is rolled back, DeBoer said, only one state would have a lower eligibility level than Nebraska. The current 185% threshold is in line with the average of surrounding states, she said.

DeBoer said the 2021 legislation authorizing the initial expansion also required an impact study, which indicated that more than 2,000 families were made eligible under the new guidelines. Ninety-eight percent of those families cited employment as the reason for needing the subsidy, she said.

“We have incredibly high workforce participation in our state and we still have job openings,” DeBoer said. “Child care is an essential need in our state.”

Bryan Sloane, president and CEO of the Nebraska Chamber of Commerce and Industry, testified in support of the measure on behalf of more than a dozen local chambers of commerce and economic development organizations.

Sloane said the consistent No. 1 concern for business leaders in the state is workforce development. In order to achieve that goal, he said, the state needs to do more to attract 18 to 35 year olds.

“For Nebraska to remain competitive in business, it’s essential that we develop longer-term and bolder strategies and make greater investments — both public and private — in affordable child care throughout our state,” Sloane said.

Katie Bass of First Five Nebraska also spoke in favor of the proposal. Families who qualified under the previous expansion, which was funded through federal block grant dollars, generated between $5.8 and $8.9 million in positive impact on the state’s economy, she said.

In addition, Bass said, many families benefitted from interactions with providers with expertise in early childhood development.

Taylor Givens-Dunn of I Be Black Girl also supported LB304. Making the expanded income eligibility levels permanent would help small business owners keep their doors open and increase child care options for the state’s most vulnerable families, she said.

“The challenges of affording child care did not begin with the pandemic, nor have they disappeared,” Givens-Dunn said.

John Meals, chief financial officer at the state Department of Health and Human Services, testified in a neutral capacity.

He said the state has roughly $90 million in federal grant dollars to allocate to the Child Care Subsidy program annually, which cost Nebraska approximately $125 million in 2024. That gap was covered with other federal dollars that have since expired, Meals said, and the department does not have sufficient base funds if the expansion does not sunset.

“We already exceed the annual value of the grants … so it’s going to end up being a General Fund cost,” he said.

No one testified in opposition to LB304 and the committee took no immediate action on the bill.