During and following the pandemic, the Murphy administration made a critical move by basing state subsidy payments for childcare service providers on their enrollment, rather than their attendance.
But a bill (S-2478) that would have extended that provision from June 30 to next year was vetoed by Gov. Phil Murphy at the end of the lame duck legislative session.
According to NJBIA Vice President of Government Affairs Althea D. Ford, the impacts of the returning childcare subsidy payments based on attendance remains to be seen.
“Governor Murphy deserves much credit for changing that determinant for childcare subsidy payments during the pandemic – and also extending that provision a couple of times in recent years,” Ford said.
“We also respect the notion that as we are transitioning to a more fiscally challenging time for the state, we need to be mindful of where state funding is going.
“The concern we have is the childcare industry – both in New Jersey and nationally – was vulnerable before the pandemic and that vulnerability continues today. Without a more predictable funding mechanism, childcare providers run the risk of closing, and this will have devastating implications for working parents who rely on these facilities for care.
“So, while it’s difficult to know at this point exactly how this more stringent funding mechanism will impact our childcare services, we do know that this is something we must monitor, and we must be vigilant in trying to do whatever we can to improve their business conditions,” Ford said.
ACCESS & AFFORDABILITY
Childcare access has long been a critically important issue for the business community, and it has been further exacerbated by workforce challenges in recent years.
In 2023, a Rutgers Center for Women & Work’s recent report, “The Status of Women in New Jersey” found that while women are largely back to work in our state, there are major changes in their employment post-pandemic, particularly for low-income women.
The report found 20.5% of women in households earning less than $50,000 have cut their work hours, 14.6% left their job and 13.2% have taken unpaid leave because of childcare disruptions.
Additionally, the report found that nearly 10% of New Jersey women who were not working sometime between April 2020 and December 2021 indicated they were not working because they were caring for children. In comparison, just 2.3% of men reported not working because of childcare responsibilities.
“This is why we think expanding childcare access and affordability is a key component of supporting our overall economy and ensuring working parents, particularly mothers, can fully participate in the workforce,” Ford said.
“We saw the pandemic disproportionately affect the female workforce, particularly women of color, lower-wage workers and those women with lower levels of education. So, it really is critical that our childcare facilities stay open.
STEPS AHEAD?
There have been positive steps taken to help the childcare industry in New Jersey.
In 2022, Senate Majority Leader M. Teresa Ruiz released a comprehensive childcare bill package, supported by NJBIA, to help the industry.
One bill (S-2476) that was signed into law provides funding for the expansion of infant and toddler seats by 1,000, with a grant program prioritizing providers in communities identified as childcare deserts, areas with a high percentage of low-income families and those that align their childcare center with high quality preschool.
Several other key bills, which help both childcare businesses and New Jersey workers who use them, did not make it to the finish line, however.
They included:
- S-2475: Establishes the Department of Early Childhood to provide focused and integrated development of children 0 to 5 care and education.
- S-2477: Requires new preschool programs or seat expansions to use private providers for at least 50% of their preschool slots.
- S-2479: Provides tax incentives to employers who provide childcare in their facilities, reimburse parents for their childcare expenses or contract with private providers so their employees can enroll their children in those childcare programs.
- S-1099: Allows a gross income tax credit for childcare staff members who have been employed by a childcare provider or worked as a registered family day care provider for a minimum of 1,260 hours for a six-month period during the taxable year.
- S-2480: Extends childcare subsidies to families earning up to 300% of the federal poverty line. Currently, families earning up to 250% FPL are eligible.
- S-2465: Requires the Department of Human Services to establish a quality-based reimbursement system for registered family day care providers participating in Grow NJ Kids.
“As we head into the new legislative session, we look forward to working with lawmakers to see where else we can help the childcare industry – whether it’s reintroducing these bills or working on new ones,” Ford said.
“The stability of the industry is too important in these challenging times and must be prioritized.”
