Article Summary –
Michigan’s child care sector has seen improvements, but more support is crucial for sustaining child care providers and assisting working parents, as highlighted by experts and business leaders during a Senate committee hearing. Senate Bill 838 proposes a Working Parent Tax Credit, offering low-income families up to $5,500 per child annually, which could address workforce participation issues and economic losses due to inadequate child care options. Despite existing initiatives like the Great Start Readiness program and MI Tri-Share, the proposed tax credit has the potential to benefit a larger number of children and families, significantly impacting Michigan’s economy and workforce.
Michigan is making significant progress in supporting struggling child care providers, yet more assistance is needed for these facilities and the working parents relying on them.
Early childhood education experts and business leaders highlighted these issues during a testimony before the Michigan Senate Housing and Human Services Committee on Oct. 17. They noted the complexity of the child care crisis in Michigan and across the U.S., suggesting that a Senate bill for a Working Parent Tax Credit could be a promising start.
Senate Bill 838, introduced by Democratic Sen. Kristen McDonald Rivet of Bay City, proposes a tax credit for low-income families with children aged 3 or younger. This credit, aligned with Earned Income Tax Credit criteria, considers filing status, number of children, and disability status, offering $5,500 per child annually, distributed monthly.
The October committee hearing was the first for a legislative package introduced earlier this year, aiming to ease financial burdens for families and child care providers in Michigan.
Taunya Sims, a home-based provider in Lansing with nearly 30 years of experience, stressed the importance of such facilities for families with nontraditional work hours. However, she finds it challenging to pay her staff a living wage.
“I open my doors at 3:25 a.m., and my last child leaves at almost 11 p.m.,” Sims shared. “We need extra funding to continue providing care so parents can work and support their families.”
According to a press release from McDonald Rivet’s office, Michigan has experienced a 40% decrease in child care providers over the past decade, with existing centers having waiting lists exceeding two years.
“I love what I do and would choose it all over again,” Sims affirmed. “But we need support for sustainability. Good providers are closing their doors.”
In June, a coalition of Michigan businesses, faith institutions, and nonprofits sent a letter to Gov. Gretchen Whitmer and legislative leaders advocating for the Working Parents Tax Credit, emphasizing its potential to boost the child care sector and state economy. A 2022 Business Leaders for Michigan report ranked Michigan 39th nationally in workforce participation, partly due to insufficient child care.
The proposed tax credit requires a $1.5 billion state investment, but a 2023 study indicates the state loses nearly $3 billion annually due to employee turnover and absenteeism linked to poor child care options.
“Fixing child care at scale is costly,” said Lou Glazer, president of Michigan Future, Inc. “The income gap is too great without major investments.”
The Whitmer administration has introduced programs like the Great Start Readiness state-funded preschool, the MI Tri-Share program, and the Child Development and Care subsidy to support the child care sector.
The Working Parent Tax Credit could potentially reach 250,000 children in Michigan, offering greater coverage than current programs, according to Angela Rincones of The Source. She noted that around 100,000 people in West Michigan alone are hindered from rejoining the workforce due to child care challenges.
“The ripple effect of empowering working families financially will significantly benefit households and Michigan’s economy,” Rincones emphasized.
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