It was nearly two and a half years ago that Senate Majority Leader M. Teresa Ruiz announced a comprehensive childcare bill package to address the needs of providers, employees and parents.
But one key bill in that package that would establish a gross income tax credit for childcare staff and registered family daycare providers has not yet made it to the finish line.
After bill A-2243 unanimously passed its first committee test of the 2024-25 session this week, NJBIA Vice President of Government Affairs Althea D. Ford said it needs to maintain momentum and finally get to Gov. Phil Murphy’s desk.
“This is legislation that is critically important to help address the staffing shortage childcare providers continue to face,” Ford said.
“We say it often because it really is true – childcare is the industry that supports all industries. We really saw its importance vividly during the pandemic. But the industry still struggles to attract and retain adequate staff. This bill could help improve a very challenging situation for the childcare industry.”
The bill, which was S-1099/A-1469 in the 2022-23 session and now S-3382/A-2243 in the current session, would help mitigate negative economic impacts and support childcare staffing by boosting wages through an earned income tax credit for employees making $45,000 or less a year.
The tax credit would range from $500 to $1,500, depending on the employee’s salary and the age of the children they care for. Higher tax credits would go to staff caring for infants and toddlers, which is the area of greatest need for providers.
The estimated fiscal impact of the bill would be around $10 million per year.
“We believe this is a modest investment that could pay huge dividends in terms of supporting the childcare workforce and, as a result, supporting working families and the overall economy by expanding access to childcare,” Ford said.
On Monday, the Assembly Children, Families and Food Security Committee advanced the bill, 6-0.
The Murphy administration, to its credit, had made a critical move by basing state subsidy payments for childcare service providers on their enrollment, rather than their attendance during the pandemic.
The governor had also extended that provision several times post-pandemic. But in January, he vetoed a bill that would have extended that provision to 2025.
Ford said that the decision now places more importance on bill A-2243 as it returns to committees for votes.
“We credit Governor Murphy for changing that determinant for childcare subsidy payments during the pandemic and then extending it,” Ford said. “We also recognize that the change was made due to a more fiscally challenging time for the state.
“But we do hope that should this current bill gets to his desk that he signs it. Childcare providers have very unique challenges and when they close or are not solvent, it has devastating implications for working parents who rely on these facilities for care.”
