New law boosts child care, workforce, Iowa Gov. Kim Reynolds says

FORT DODGE — Participation in Iowa’s state-funded child care assistance program is projected to increase 15 percent, thanks to an expansion of eligibility signed into law Thursday by Gov. Kim Reynolds.

The new law raises the eligibility threshold for state-funded child care assistance from 145 percent of the federal poverty level to 160 percent. That means a family of four with a household income of up to $48,000 would be eligible for help.

That increase will apply to more than 2,600 children, according to projections from the Legislative Services Agency, the state’s nonpartisan fiscal analysis agency.

The new law increases how much the government reimburses child care providers.

And it increases the number of hours that most adults in the child care assistance program must work each week or participate in an education program.

Reynolds signed the bill into law during a ceremony at ChildCare Discovery Center in Fort Dodge, flanked by children who attend the day care center. She called it “an important bill that will help expand access to high quality child care.”

“With these changes, child care centers will be better positioned to again recruit and retain a stable workforce to serve families,” Reynolds said.

The changes will increase costs to the state’s child care assistance program by more than $25 million annually, according to the Legislative Services Agency.

In 2022, an Iowa family with the median household income] and with an infant in child care spent between 10 percent and 14 percent of their income on child care, before taxes, according to Iowa Child Care Resource and Referral. Nationally, 7 percent is considered affordable child care.

A state report published in November 2021 said that 23 percent of Iowans, and nearly 35 percent of rural Iowans, lived in a child care “desert,” which is an area with a shortage of licensed child care providers.

That same report, which was a product of Reynolds’ state task force on child care, said the state’s average monthly cost for child care — just more than $1,000 — was higher than what the average Iowa family paid for housing at the time.

Reynolds on Thursday acknowledged the high cost of child care with a personal anecdote, saying her daughter at one point left the workforce for a time because, with the costs associated with three children of day care age, her daughter was “at a deficit.”

Reynolds said the new law is an attempt to help more families access affordable child care and address the state’s workforce shortage by increasing the work or study requirements from 28 to 32 hours per week.

“We’re just trying to do whatever we can to really help families but (also) to encourage them, with such a workforce shortage in the state of Iowa,” Reynolds told reporters after the ceremony. “I think it was a fair and reasonable place to land for the bill.”

Tammy McNeil, the owner and administrator of the ChildCare Discovery Center, said the increased reimbursement rate will make “a huge difference.” She said more than half the center’s clients are on the state’s child care assistance program.

She said the center also has benefited in recent years from federal grants, which helped equip the center with infrastructure and toys.

The new law includes some of the recommendations made by Reynolds’ 2021 task force. She said the state has invested $500 million in child care since 2020.

The new law, as House File 707, passed the Iowa Legislature with near-unanimous support, on votes of 48-0 in the Senate and 92-1 in the House.

Comments: (515) 355-1300, erin.murphy@thegazette.com