Pa. House passes bill to give tax credits to employers who help workers afford child care
The Pa. House passed a bill to give tax credits to companies that help workers defray the costs of child care (Getty Images)
Child care may soon become less expensive for some of Pennsylvania’s working families.
The Pennsylvania House of Representatives, in a broadly bipartisan 155-47 vote, passed a bill that would provide tax credits for employers that contribute to their employees’ child-care expenses.
“We need access to child care to ensure a functional economy because without access there is no workforce, no tax revenue and our economy halts,” state Rep. Liz Hanbidge (D-Montgomery), who sponsored the bill with state Rep. Morgan Cephas (D-Philadelphia), said in a speech on the House floor.
According to a release from House Democrats, “the proposed tax credit equals 30% of the total contributions an employer makes towards child care for all its workers, counting only the first $500 in contributions made per employee.”
The release also noted that the credit would not be considered income on employees’ personal income tax returns.
In her floor speech, Hanbidge criticized what she called “insufficient wages” for child care workers in Pennsylvania, attributing a shortage of such workers to the low wages. The U.S. Bureau of Labor Statistics last year pinned the mean hourly wage for Pennsylvania child care workers at $14.18 per hour, $1.24 less than the national mean.
“While this bill is a modest step in alleviating some of the impact that lack of child care has on families and businesses, it is an important one,” Hanbidge said. “By creating partnerships with employers who are willing to help cover important employees’ care costs, we are able to better bolster our economy and strengthen our future.”
Hanbidge noted that the U.S. economy loses up to $122 billion each year because of insufficient child care, an apparent reference to a study by the Washington, D.C. nonprofit ReadyNation. That study was funded by the Pritzker Family Foundation, which, according to its website, has “a commitment to and a focus on social and economic justice and equity.”
The U.S. Chamber of Commerce, in an October report, estimated that Pennsylvania loses $591 million annually in tax revenue “due to child care issues.”
Hanbidge received loud applause at the conclusion of her speech and the bill passed without any debate. The measure now heads to the Republican-controlled Senate.
Two of Pennsylvania’s neighboring states, West Virginia and New York, already provide incentives for businesses that assist employees with child care costs or provide child care. Similar proposals are being considered in Alabama, Connecticut and Wisconsin.
The passage of the bill follows the expansion of Pennsylvania’s child care tax credit, which Gov. Josh Shapiro signed into law in December. That measure also received bipartisan support.
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