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Childcare tax credit bills moving in West Virginia House

2/2/2024

Charleston, W.Va. – A West Virginia House of Delegates committee has begun working on tax credits and pilot programs meant to encourage the growth of childcare options to help get people back into the workforce.

The House Committee on Senior, Children, and Family Issues recommended three bills for passage Thursday dealing with childcare, sending all three bills to the House Finance Committee.

House Bill 5051, providing a tax credit to for-profit and nonprofit corporations for continued operations of existing childcare facilities, would provide a tax credit against corporate net income taxes and personal income taxes for expenses for existing childcare facilities equal to 100% of the total amount expended by a taxpayer.

House Bill 5052 would increase the tax credit for employers providing childcare for employees. The bill expands on a bill passed by the Legislature in 2022 providing a tax credit for employers who provide childcare facilities to employees. HB 5053 would cover the costs of capital investments and operating costs for employer-provided childcare facilities from 50% of the capital and 50% of the operating costs to 100% of capital and operating costs.

The lead sponsor of both bills is Del. Bob Fehrenbacher, R-Wood, and HB 5053 has the support of the West Virginia Chamber of Commerce. Fehrenbacher said both bills are meant to help reverse West Virginia’s reputation as a childcare desert.

“This provides an incentive to employers to create that, incentivizing them to install and operate these facilities,” Fehrenbacher said. “I think it’s a win-win for businesses and for those seeking such childcare as well as the state.”

According to the Center for American Progress – a center-left public policy advocacy organization – 64% of West Virginians reside in a childcare desert – the fourth highest rate in the nation. Another 78% of rural families in the state reside in areas without access to licensed childcare providers and 65% of young mothers are in the state’s workforce.

According to a 2021 child care needs assessment by the former state Department of Health and Human Resources, sources of childcare in the state range from centers, facilities, homes, Head Start, and Out of School Time.

“West Virginia finds itself with over 60% of the residents of West Virginia living in an area that is considered a childcare desert,” Fehrenbacher said. “Childcare is necessary for us to help and improve and increase workforce participation as well as create a workforce that is available for investment and job creation.”

The committee also recommended for passage House Bill 5393, establishing a pilot program to develop a childcare program where the state, employer, and employee, contribute one-third of the total cost each. The program is modeled on a similar program in Michigan, called “tri-share.” The program could help families share 33% of the cost of childcare, reducing the financial burden.

House Minority Leader Pro Tempore Kayla Young, D-Kanawha, said she was excited to see the tri-share pilot program bill move.

“It’s a really interesting model where businesses pay a third and they receive a tax credit for it, parents pay a third, and the state pays a third,” Young said. “It’s a model where everyone has skin in the game, and it can increase childcare in massive amounts.”

The tri-care bill is one of several bills recommended by a bipartisan task force charged with looking at the state’s child care access issues over the last several months. There have been other bills introduced in the Senate, and Gov. Jim Justice called for a state child and dependent care tax credit during his State of the State address in January.

Young said to expect additional bills to be introduced before the end of the 2024 legislative session regarding childcare.

“We have a great coalition of folks from industry, providers, parents that are working on pushing childcare forward,” Young said. “These three bills are just the first ones we’re seeing so far. Our taskforce has a number of bills we’re excited about.

“We got the ball rolling in 2022 with the first tax credit for businesses,” Young continued. “This is kind of a bigger roll of the ball. We have a lot of exciting announcements to come on childcare.”

 

Story by Steven Allen Adams, News & Sentinel

 

 

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