Iowa House child care bills move forward, but may fall short of need

Bills to expand child care opportunities advanced in the Iowa Legislature on Monday, but a lawmaker involved in the business warned that the proposals may not go far enough to solve the state's shortage of providers and staffing.

House File 1, which would double the maximum net income threshold for the Iowa child and dependent care credit and early childhood development tax credit from $45,000 a year to $90,000 was approved 24-0 by the House Ways and Means Committee.

It's part of a package of bills House Republicans are including in their push to address workforce issues. Iowa has more households with all parents working than any other state. So the lack of child care opportunities is seen as impediment to meeting the state's labor force needs.

In the past five years, the state has lost 33 percent of its child care businesses and needs an additional 350,000 child care slots for children younger than 12, according to Gov. Kim Reynolds' office. On top of that, the governor's office says nearly a quarter of children in live in areas with a shortage of providers.

The problem has worsened during the coronavirus pandemic. According to the Linn County Community Child Care Supports Team, during COVID-19, the county has lost 24 regulated child care programs - 20 registered child development homes and four licensed centers. That is an overall loss of 385 child care slots, said Rep. Tracy Ehlert, D-Cedar Rapids, who works in the child care industry.

Also Monday, HF 3, which would make incentives from the High Quality Jobs Program available for the development of child care facilities, was advanced to the full Economic Growth Committee.

Rep. Jacob Bossman, R-Sioux City, explained that much like the state offers incentives for infrastructure such as natural gas, water, sewer and roads for developments, expanding the high-quality jobs incentives would help attract an adequate workforce to a new development or expansion.

Businesses could qualify for tax credits if they develop or expand child care facilities for their employees if the project creates or retains jobs that meet a state wage threshold.

In awarding incentives, the state must consider the economic impact, including placing greater emphasis on economically distressed areas, facilities that will care for 20 or more children and whether there are adequate child care facilities in the area.

Lobbyists who spoke on the bill offered generally favorable comments on what one described as Bossman's 'holistic approach” to addressing workforce child care issues. All three subcommittee members signed off on the bill to send it to the full committee.

Although encouraged by efforts to address child care issues, Ehlert said the bills might not accomplish as much as their titles would suggest.

'There are quite a few bills that have the word child care in them and are related to child care, but for the everyday person who doesn't fully understand these bills or understand the profession, it's going to look like we're doing a lot of great things for child care when we're really still falling short,” Ehlert said.

That's especially true when talking about child care staffing issues, she said.

One bill, for example, asks that child care providers be reimbursed at the 50th percentile for child care assistance. That will have little impact because it's being done for some of the regulated child care categories and federal guidance call for reimbursement at the 75th percentile, Ehlert said.

Another bill, HF 6, addresses Iowa's TEACH and WAGE$ program. As chairwoman of the Early Childhood Workforce Advisory Committee and a TEACH recipient, Ehlert monitors both programs. The bill doesn't provide funding, but sets up a new structure that she said would create some difficulties for program participants.

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