Lawmakers on the Senate Health Committee on Monday unanimously approved bills that would establish child care tax credits, expand child care subsidies to more families and establish subsidy programs to boost enrollment in early childhood education.
The moves come as New Jersey continues to struggle amid a shortage of child care staff and as its economy heads into a post-pandemic correction still hampered by a shortage of affordable childcare.
“As we face labor shortages across all sectors, reducing the cost of childcare will allow more parents to re-enter the workforce at a time when we have the most. need,” said Senator Teresa Ruiz (D-Essex), House Majority Leader and sponsor of the invoice package. “This multi-pronged approach tackles this problem from all angles to ensure the maximum impact on our economy and our children.”
Each of the bills still has to be voted on in committee in the Assembly.
A proposal would give licensed child care workers and those registered as child care providers gross income tax credits ranging from $500 to $1,500, depending on the taxfiler’s income and the age of the children they monitor.
To be eligible for the tax credit, custodial staff must hold their position for six consecutive months during a given taxation year. Proponents say they hope the credit will improve employee retention in the industry as economic pressure drives up wages in other areas.
“Child care programs are struggling to find staff to teach in their classrooms because they are hired by places like Amazon and Target because they can pay a higher hourly wage,” said Cecilia Zalkind, president and CEO of Advocates for Children of New Jersey, told lawmakers.
Another measure would expand eligibility for child care subsidies to middle- and low-income families. This would raise New Jersey’s child care assistance program income threshold from 200% to 300% of the federal poverty level. For a family of four, this would raise the income threshold from $55,500 to $83,250.
The program pays a portion of child care costs for the first two children in an eligible family, with the remaining costs covered by copayments.
As under current law, the Department of Social Services would be able to establish a single level above the income limit to provide an exit ramp for families experiencing an increase in income that would otherwise render them ineligible. to subsidies.
Habibah Johnson, a mother of four, testified that she sometimes earned just 3% above the income threshold for subsidies.
“After each of my children was born, I applied for grants and they refused. A grant would have been a lifeline for our already financially struggling family,” Johnson said.
Other bills would establish a $22 million grant program to fund a 1,000-space expansion of the state’s child care industry. The program would offer separate grants that could be used to recruit and train more staff and increase program capacity by expanding or renovating existing facilities.
The fourth bill in the package would extend a pandemic-era program that saw state daycare subsidies awarded based on a center’s enrollment instead of attendance. Gov. Phil Murphy signed a bill with the same requirements last year, but those provisions were set to expire on July 1. The new measure would maintain the program until June 30, 2025.
As they have done in the past, progressive and business groups have offered support for child care initiatives. Progressive groups have long advocated for widespread, and sometimes universal, child care, but the issue has taken on a new dimension for business groups with the onset of COVID-19.
Even with the virus receding from public view, childcare remains a barrier for parents re-entering the workforce. Ferlanda Fox Nixon, chief of policy and external affairs for the New Jersey African-American Chamber of Commerce, said the bills would help Black businesses and households in New Jersey.
“Black mothers are more likely to be breadwinners, but less likely to work from home, and then black mothers earn less,” she said.
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