by Ezra Bitterman

Missouri News Network

A bill that would enact a trio of tax credits for child care was debated in the state Senate before being temporarily set aside Tuesday.

A similar bill — which is a priority for both Republicans and Democrats this year — passed through the House a few weeks ago with bipartisan votes.

The Senate version, SB 742, has bipartisan support, too. Majority Floor Leader Sen. Cindy O’Laughlin, R-Shelbina, voiced her growing appreciation for the bill before it was set aside for another day.

“I like the bill a lot more than I used to. It gives local people an opportunity to see a need in a local community and pay for something,” she said. “And instead of sending taxes to Missouri for them to decide how to spend it, you get to decide how to spend it.”

The bill sets out to counteract the lack of child care providers in the state. According to the Department of Elementary and Secondary Education, there are 500 fewer licensed child care providers than five years ago.

Gov. Mike Parson’s legislative director, Jamie Birch, cited the lack of available child care as a major problem in a 2023 interview with the Missouri Chamber of Commerce.

“In 2022, there was a study on the capacity for licensed child care slots in the state. We found we only have enough capacity to serve 39% of kids under 6 years old,” Birch said. “We also found that about 77% of the counties — that’s 89 out of 115 counties — are considered a child care desert.”

The bill’s first provision provides a tax credit of 75% of what someone spends at a licensed child care provider. For example, if a parent spends $10,000 on daycare, they would receive a $7,500 credit.

The second provision allows employers to receive a 30% tax credit on contributions to a child care provider if child care is paid for the company’s employees. For example, if a company spends $50,000 a year to provide child care to its 10 employees, it would get a tax credit of $15,000.

The final provision allows child care providers to get a full tax credit on the amount of income tax withheld for employees. For example, if a provider withholds $1,000 a year from an employee for state income tax, the provider would get a credit of $1,000.

The provision also adds that a 30% tax credit would be given against the cost of physical improvements for a child care facility.

A similar bill passed through the Senate last year with bipartisan support, except for Freedom Caucus members who opposed it. It wasn’t able to pass the House before the end of session.

One of the Freedom Caucus members who voted against the bill last year, Sen. Bill Eigel, R-Weldon Spring, debated with the bill sponsor Sen. Lauren Arthur, D-Kansas City, on Tuesday.

He argued that government intervention was a problematic approach and that rising costs in child care are not unlike everything else that has gone up with inflation.

Arthur contended that the state needs to support child care because “quality child care plays a pivotal role in child development, offering more than just a safe environment while parents are at work. It serves as a foundation for lifelong learning.”

The bill can be considered again later in the session.