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Iowa Governor proposes expanding child care tax credit

Governor Reynolds also says she is also opening up an “Employer Innovation Fund” to help fund Iowans who expand or create childcare options in their...

DAVENPORT, IOWA  --  Iowa lawmakers want to make child care more affordable for parents and are proposing increasing childcare tax credits. Iowa Governor Kim Reynolds says expanding the early childhood tax credit wouldn't just help families pay for day care, it could help get more Iowans in the workforce.

"Childcare is the next workforce issue we need to tackle," Governor Reynolds said. "It`s another barrier for families looking for a way up. For some, it’s about affordability; for others, access is the issue; and for thousands of Iowans, it’s both."

"Having two kids in child care basically equates to more than my mortgage payment each month," Iowa parent that pays for daycare, Calli Weir said.

"We are a two income household and we still struggle to pay for daycare and we have good paying jobs" Iowa parent that pays for daycare, Jodi Siebler said.

United Way estimates the average Iowa family will pay 10-thousand dollars a year for care at a child care center. The price goes up with each child. It also varies if the care is in a private home and based on the age of the child.

Governor Kim Reynolds' plan expands access to the credits for households earning up to $90,000. Right now, families that make $45,000 or less qualify.

"Let’s make childcare more affordable by expanding Early Childhood tax credits," Governor Reynolds said. "Currently, they are available to families making $45,000 or less; I’m recommending that be doubled to $90,000."

"It's that 45 to 90 thousand range that maybe doesn't get a lot services, so I think it would be really beneficial to those families," Birdie's Nest Child Care Center owner Rhea Salzbrenner said. "I think this is a step in the right direction, but I think it could probably even be a little bit higher than what it is."

The new proposal does not change the amount of money families could get back. It only changes the amount of families eligible for the credit.

"All it does is expand the availability of the credit, not the size of the credit," Iowa accountant Douglas Reiling said.

Governor Reynolds' second idea would change the way families get state aid. Right now, families lose benefits once they hit a certain income level.

"We must begin to address the child-care cliff, so we are not punishing parents as they continue on a path to self-sufficiency," Governor Reynold's said. "To do this, we should implement a tiered co-pay system that doesn`t punish those who work hard enough to earn a raise."

The Governor says it's a way to make sure more families can afford quality care, and in the long run, to strengthen the workforce.

Governor Reynolds also says she is also opening up an "Employer Innovation Fund" to help fund Iowans who expand or create childcare options in their communities.