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Iowa lawmakers look to improve access to affordable child care
Committee advances Ernst bill allowing nonprofit centers to tap into program
Jul. 19, 2023 5:47 pm, Updated: Jul. 20, 2023 9:53 am
Iowa state and federal lawmakers — from both sides off the political aisle — were in Washington, D.C., on Wednesday as part of separate efforts seeking to advance policies to expand access to affordable child care in the state.
A bill sponsored by Iowa Republican U.S. Sen Ernst would allow nonprofit child care centers, including religious nonprofits, to participate in a Small Business Administration loan program to open more child care slots.
Currently, only for-profit child care centers qualify for federal programs that help small businesses access capital. To qualify, child care centers would have to comply with usual credit requirements and licensing requirements.
The bill, introduced in March, passed Wednesday without objection in the U.S. Senate Small Business Committee. Ernst sponsored the bill alongside U.S. Sens. Jacky Rosen, D-Nev., Tammy Duckworth, D-Ill., Marco Rubio, R-Fla., and James Risch, R-Ind.
According to a 2021 report by the Bipartisan Policy Center, a Washington, D.C. based nonprofit focused on promoting bipartisan policy solutions, 15 percent of working families nationwide use faith-based child care.
“Iowa parents shouldn’t be forced to change jobs or forgo work altogether due to gaps in affordable, accessible child care,” Ernst said in a statement. “This effort will unlock additional child care slots in our communities and improve their quality by allowing nonprofit entities, including our faith-based institutions, to participate in SBA loan opportunities that support child care providers.”
Increasing access to capital would help support providers looking to start a child care center, Linda Smith, director of the Bipartisan Policy Center’s early childhood initiative, said in a statement. Better access to financial resources would make it easier for child care providers to expand child care slots available in rural communities, she added.
“Access to quality child care providers is critical for hardworking families and a strong, stable economy,” she said. “Yet across the country, providers are struggling to deliver care on razor thin margins and with limited resources.”
A lack of accessible child care options is preventing Iowa families from entering the workforce, according to a report by the Annie E. Casey Foundation released last month.
Between 2020 and 2021, 14 percent of Iowa children under 5 had a family member quit, change or refuse a job due to child care quandaries, according to the report, compared with 13 percent nationally. The report also found that child care workers earn less than 98 percent of workers in professions nationally, and the median hourly wage for Iowa child care workers was $10.99, compared with $13.71 nationally.
Democrats travel to White House
Also Wednesday, four Democratic state lawmakers traveled to the White House for a meeting with administration officials and lawmakers from across the country on child care policy.
State Sens. Janet Petersen of Des Moines, Molly Donahue of Cedar Rapids and Janice Weiner of Iowa City and state Rep. Tracy Ehlert of Cedar Rapids joined more than 90 legislators from 41 states at the White House event, where first lady Jill Biden spoke about President Joe Biden’s commitment to lower child care costs for working families and where lawmakers attended breakout sessions outlining how states can help.
Among the proposals lawmakers heard:
- Cap child care co-payments for working families at no more than 7 percent of a family’s income, and encourage states to waive co-payments for families at or below 150 percent of the federal poverty level.
- Improve financial stability for child care providers and incentivize their participation in the Child Care & Development Block Grant program, which supports 1.5 million children and their families each month with child care assistance, by ensuring they are paid on-time and based on program enrollment instead of attendance.
“President Biden is not giving up on kids and families. It’s a huge component to his budget that he’s putting out and his policy initiatives,” Petersen said. “And Iowans would be much better off by taking up some of these policies to help young families in our state.”
Weiner noted a growing list of states are moving forward with their own child tax credit programs after Congress ended pandemic-era cash assistance payments for parents. The 2021 expansion of the Child Tax Credit led to a historic reduction in poverty in the United States, lifting 2.9 million children out of poverty.
"What could we do with that?“ Weiner asked of the state of Iowa.
Iowa House Democrats, as part of their “People over Politics” agenda, proposed providing a child care tax credit that would lessen childcare costs for Iowa families making less than $250,000, based on a sliding scale. The less an Iowa family makes, the larger the tax credit.
Iowa Republican U.S. Rep. Ashley Hinson, of Marion, has proposed an increase in the federal child tax credit as part of a package she says will support women during and after their pregnancies. The 2021 American Rescue Plan that Hinson opposed raised the tax credit for low and middle-income parents of kids under 17, providing most parents monthly cash payments of up to $300 per child.
Hinson’s bill would raise the credit even higher.
New Iowa law takes effect
Iowa Gov. Kim Reynolds in May signed into law legislation that took effect this month expanding eligibility requirements for statechild care assistance and child care provider reimbursement rates, while also increasing work requirements for parents of children who qualify for assistance.
Senate Democrats, saying the law shows some improvement, criticized it for increasing work requirements, and said the funding still is inadequate to address child care staffing shortages and high costs of keeping Iowans out of the labor force.
Petersen said the new law implements the strictest work requirements in the country on new Iowa parents to receive childcare assistance. If they lose hours at work, the law does nothing to protect kids’ slots or their providers’ paychecks, she said.
House File 707 increases the income limit for child care assistance to 160 percent of the federal poverty level. That equates to a household income of $48,000 for a family of four.
Iowa Democrats, though, note more families qualify for state assistance to send their child to private school than qualify for child care, and that the same income threshold — 300 percent of the federal poverty level — should apply for families seeking child care assistance also.
“We have a lot of things we could and should be doing for our children,” Donahue said. “It will spur the economy if we have great child care.”
Republicans argue the new law will help more Iowa families find affordable child care and return to work, and note Reynolds has approved more than $500 million in state and federal funding to increase access to child care since the start of the pandemic.
Ehlert, an early childhood educator, argued Reynolds and GOP legislators invested heavily in expanding child care infrastructure, “but we didn’t invest in the workforce.”
“It’s not getting to the families,” Ehlert said. “It went into infrastructure that we can’t fully staff. … And we’re not adequately paying the workforce to keep them staffed.”
Weiner said Iowa should look to other states like New Mexico, Minnesota, Colorado, Massachusetts, California and others that have passed guaranteed-income child tax credits over the past two years.
“And let’s watch what happens with their employment, with their schooling, with their ability to pull in business and keep it there and keep a quality workforce,” she said. “And I think, ultimately, that will give us our answer.”
Comments: (319) 398-8499; tom.barton@thegazette.com
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