On April 12, 2023

Here’s why the childcare bill should be a top priority

By Angelo Lynn

Editor’s note: Angelo Lynn is the editor and publisher of the Addison County Independent, a sister publication to the Mountain Times. 

In a legislative session in which the state faces several so-called crises — the lack of affordable housing and affordable childcare, labor shortages, long-term care, climate change, mental health, substance abuse, and more — legislators have two choices: pick priorities to fund or use the shotgun approach and scatter limited funds to each cause. There are pros and cons to both tactics, but we’d argue that some of the crises are best addressed in whole, while progress on other issues can best be made incrementally.

The lack of affordable housing, for instance, could be addressed by regulatory changes that allow the free market to work its magic, rather than depend on state subsidies. That process may take longer to achieve and done in incremental steps, but it in the end progress will be more sustainable and certainly less costly to taxpayers.

Creating affordable childcare, on the other hand, will need a more holistic approach. Here’s why: 

The average cost of childcare in Vermont ranges from $12,500 to $15,000 per infant per year (and higher in many communities). While state subsidies cover part of the cost for most families up to 10 hours per week, that’s not enough to allow parents to return to work or to cover the remaining cost of full-time care. No one doubts the high cost of childcare is one reason many young people choose to leave Vermont and raise families elsewhere, adding to the labor shortage and the state’s aging demographics.

Of those families who stay in Vermont, the high cost of daycare means it often doesn’t make sense for both parents to work, so one parent stays home to provide care, while the other tries to make ends meet. This adds to the state’s lower labor force (Vermont still has 20,000 fewer workers in the market in 2023 than it did pre-pandemic), which keeps the state’s economy from growing as quickly as it otherwise could and puts more Vermont families closer to poverty.

Current estimates say the state is about 8,000 daycare slots short of fulfilling current need. Obstacles in building that capacity are twofold: families can’t afford the high cost and providers don’t pay childcare workers enough to attract more applicants. 

In short, it’s not a problem the market will solve on its own anytime soon. 

To get out of the current pickle, the state needs to increase subsidies so families can afford childcare costs, as well as subsidize childcare centers so they can afford to increase the pay of childcare workers. (Regulatory tweaks could also help smaller daycare centers qualify for higher state subsidies as well as improving quality of care.) 

This very approach is encapsulated in S.56, a bill the Senate passed last week by a 24-6 vote. The bill injects $150 million a year of new funding into the childcare sector and includes a 12-week parental leave benefit for parents of their new-born babies. 

The bill now heads to House committees for review and inevitable tweaks. It won’t be smooth sailing. 

While the House is in general agreement on the bill’s merits, it will take exception to the parental-leave section (which could threaten the House’s own desire to pass a more comprehensive— and expensive — family-leave program), as well as taking exception to how S.56 will be financed through an 0.42% increase in payroll taxes and eliminating the child tax credit the Legislature passed last year. That credit gives families with kids under the age of 5 up to $1,000 per child, depending on household income, and is viewed fondly by key leaders in the House.

And once the bill comes out of the House and through reconciliation in Conference Committee, it could face a veto by Gov. Phil Scott, who has said he’s opposed to raising any taxes to solve Vermont’s problems.

In the bill’s journey through the House and reconciliation, we urge legislators to carefully consider Vermont’s priorities and focus on the few things the state can afford to effectively move the needle; understanding that the state’s budget, as the governor rightly says, can’t afford to fix everything. Solving the childcare crisis, nonetheless, should be at the top, and the governor should approve the spending, because: 

We need young parents to set roots, raise families and become productive workers and employers in our economy. If we can’t do that, by keeping those born here as well as attracting new residents, we’ll face a continuing downward spiral in our economy. 

Conversely, if we can grow our younger demographic, it helps address our labor shortage, adds vitality to the state’s economy, curtails declining school enrollments, and potentially boosts our state college system.

The solutions are ideally suited for state help. That is, state aid can effectively boost the marketplace to do the right thing, just as it provides for K-12 education and for younger children in some school districts.

In short, while the state faces several legitimate crises, tackling childcare through the provisions of S.56, which Addison County’s Sen. Ruth Hardy played a significant role in drafting, stands apart as an effective use of state aid in an environment that won’t likely change otherwise. Furthermore, it not only helps Vermont families, but it boosts Vermont’s economy and provides much needed help to Vermont’s employers. Few bills are as effective in so many ways.

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