Child care centers are struggling to make ends meet, and a new voter-approved tax credit is a first step toward boosting the flagging system, advocates say.
Kindergarten students are loaded into a van by Pita Espinosa so they can be driven to their elementary school from the Learning Tree childcare center in Yoakum, on Sept. 13, 2022.As Texas’ child care centers struggle to stay open amid mounting post-pandemic financial woes, a lifeline thrown out by voters last year – a new tax credit for providers – is gaining traction in the state’s biggest metropolitan areas.
“I was so, so proud,” said Dianne Miller Nielsen, executive director Children's Coalition of Aransas County, who will save $11,000 on the tax bill for her local center. “It’s a blessing to us, for sure.” The exemption applies to those centers that receive state subsidies for lower income families for at least 20% of their enrollees. They also must be qualified to participate in the Texas Rising Star program, which ties funding to quality.
A federal infusion of more than $4 billion to Texas for child care funding helped keep the centers afloat while Texans went back to work in the months after the pandemic.in 85% of Texas counties to help cover costs for an estimated 836,000 children, according to the federal Administration for Children and Families’ Office of Child Care. But that funding ended late last year.“Texas has money.
Without funding to replace the federal relief dollars, up to 44% of child care centers in Texas are likely to close their doors within the next year, according to aChild care facilities are struggling to meet rising costs — such as an average 37% increase in payroll — as families strapped by inflation are unable to pay higher tuition to meet those needs, owners and advocates say.
Next year, Kaminski plans to join other owners and advocates in pushing to broaden the credit to include centers regardless of their subsidy status, a change that would only need legislative approval but would help three times as many facilities. But the break at her flagship center, which has been open three years, can eventually help her raise staff pay by at least 20%, build playground equipment that will cost about $15,000, replace furniture and make other quality upgrades. Some day, she said, the money will help her save enough to buy the property she has her centers on, instead of renting them.
But acceptance in those regions has been slower, Kofron said. Some are waiting to see how other counties and cities implement the exemption, and many are still trying to determine the impact such an exemption might have on their small budgets.cost of the exemption makes a lighter impact on its $31.7 million budget — but much lower costs get dicier when budgets get smaller, Kofron said.
“It’s not really something that has bubbled up until now,” she said. “It’s never been funded at the local level. As a state, we’re 100% reliant on our federal government to support child care, so there hasn’t been a mindset that the state should invest or the locals should invest. But this is something that we as a community should be asking: Are we making sure that there are places for our 0-5 kids so that our families can work? It’s bringing that to their attention.
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