Business Insider

Cities and counties across the US are coming up with ways to make childcare more affordable — and many are turning to taxes.

Colorado has a policy that allows taxpayers who donate to qualifying child care facilities and programs to claim an income tax credit equal to 50% of their contribution.

To be sure, local tax revenue cannot replace funding for America's whole childcare system. Anne Hedgepeth, the senior vice president of policy and research at the advocacy organization Child Care Aware of America, told BI in an email statement that local policies are a complement larger state-level and federal funding pools.

"Additional funding is paramount to building a strong child care system," she said. "And it is positive to see localities interested in supporting their child care systems and taking action."

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NPR

Child care was on the ballot in several cities and counties across the country.

In Austin, Texas, where voters weighed whether to raise property taxes, advocates noted that a year of child care costs more than a year of tuition at the University of Texas at Austin.

In Sonoma County, Calif., where a new sales tax was on the ballot, a year of infant care can cost more than a year at the University of California, Berkeley. And still, demand is high. A report found the pandemic had decimated the county's child care workforce to such a degree that it was left with just over half of the child care slots it once had.

Meanwhile, in a statement early Wednesday, the advocacy group Child Care Aware of America, urged the incoming Trump administration and Congress to work toward broader solutions.

"The American people have resoundingly called for — both before and during the election cycle — affordable, accessible, quality child care solutions," wrote the organization's CEO Susan Gale Perry.

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Washington, D.C. – On Sept. 30, federal relief funding for child care expired. In recent years, several states expanded eligibility, improved affordability, and made other changes to their child care policies, funded in part by COVID-19 relief dollars.  

Parents across the nation are struggling to access affordable and reliable child care almost five years after the start of the pandemic — a phenomenon that new survey data suggests may be worsening as stimulus funds expire.

One-third of parents recently surveyed by The National Women’s Law Center reported their child care costs rose over the past year, following the expiration of the first batch of pandemic-era child care funding. Among parents of kids under age 5, that number is even higher (37%). 

Susan Gale Perry, CEO of Child Care Aware of America, described the situation in Nevada, where eligibility for subsidized child care programs is returning to pre-pandemic criteria as relief funds wind down. “[This] means that families who have the least are going to need to be paying more for child care,” she said.

Across the country, she added, states were able to implement creative solutions with the help of pandemic relief revenue. “The bright spots that we’re seeing are states that are continuing to pick up some of those great ideas and move forward with them using state funds. So we know we need a solution that includes a combination of federal and state and private and parent fees to really make child care work the way it needs to for this country.”

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Child care has grown so expensive that full-time care now costs more than rent in 16 of the nation’s 100 largest cities, according to a new report.

LendingTree, the personal finance site, compared the monthly cost of infant care with average rents for a two-bedroom home in big cities.  The LendingTree report, published Sept. 16, draws on child care figures from the nonprofit Child Care Aware of America and compares them with federal rent data. 

It’s the latest in a string of surveys and studies to sound alarms on the rising costs of child care.  

Child care salaries are low, and profit margins thin, in part because of state regulations that generally require high ratios of workers to children, according to child care experts.  

Another factor is real estate: A day care center in an affluent suburb might face the same high rents or mortgage costs as the affluent suburbanites who live there.

“Even though parents are paying these very high prices, child care providers are actually making very little money,” said Sandra Bishop, senior director of research at Child Care Aware of America.  

“The system is not working for anyone, really,” Bishop said. “Families can’t find child care. If they find care, it’s not affordable. It hurts parents, it hurts communities, it hurts businesses.” 

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Preschool options are growing with the expansion of early learning programs, giving families in some parts of the U.S. a dizzying array of choices.

Some states, like Colorado and New Mexico, are funneling state money into existing private preschools or child care centers. Others, like California, are expanding preschool through the public school system. Some cities are launching their own universal preschool programs. In the 2022-2023 school year, 35% of 4-year-olds and 7% of 3-year-olds were enrolled in public preschools — a record high.

Find out if you qualify for assistance with costs

You might be surprised how many families qualify for free preschool or a child care subsidy.

Many places have recently expanded public preschool and programs to help families pay for privately run preschools and child care operations.

The federal government funds organizations that help people navigate their options or connect them with child care assistance. To find your local agency, Child Care Aware of America has a special search tool on their website.

“Every state is different, and in a lot of situations, the most helpful thing is to talk to someone who can assess your family’s individual situation,” said Anne Hedgepeth, chief of policy and advocacy at Child Care Aware of America.

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Research suggests that a child’s first year is a critical window for brain development. A study published in 2022 on the effects of cash support on low-income families found that when parents received $333 a month, the babies’ brains showed brain activity that is associated with higher cognitive development.

Studies have also shown that boosting financial assistance for families can reduce child poverty, cut gender pay inequity and lower infant mortality rates.

“Kids learn the most they’ll ever learn in their lives in those first few years,” said Anne Hedgepeth, chief of policy at research agency Child Care Aware of America. “It pays off in the long run.”

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Child Care Aware of America applauds Senate increase in annual appropriations for the Child Care and Development Block Grant (CCDBG), urges Congress to act.  

Today, the Senate Appropriations Committee passed a $2.3 billion increase for early learning programs. The increase is part of the Fiscal Year 2025 Departments of Labor, Health and Human Services, Education, and Related Agencies Appropriations Act. As part of the early learning increase, the Act provides $10.35 billion for the Child Care and Development Block Grant (CCDBG) - a $1.6 billion or 18% increase over fiscal year 2024. This funding will help more working families find and afford quality child care programs.