Lawmakers Pass Bill to Make ‘Quantum Leap’ in Child Care Investments

The Vermont House and Senate have officially signed off on a child care bill that is poised to inject more than $120 million annually into the ailing sector — and delivered, preliminarily, on one of the Democrats’ banner priorities for the session.

By a 118-27 vote, the House on Friday evening passed out H.217, a measure that advocates say will likely put Vermont first-in-the-nation for its investment in early childhood education. About an hour later, the Senate concurred, officially sending the measure to Gov. Phil Scott’s desk.

The Republican governor is expected to veto the bill, but the vote tallies in both chambers — the Senate voted 24-6 in favor on Thursday — suggest that Democratic leaders have the numbers they need to override him.

The push for additional child care funding has benefited from the Covid-19 pandemic, which underlined both the sector’s fragility and its essential role in the greater economy, and Let’s Grow Kids, the well-funded advocacy organization that has championed the cause for close to a decade.

Inflation and a statewide labor crunch have also exacerbated the sector’s problems, with stories of child care centers closing making headlines on a routine basis, bringing more pressure to bear on lawmakers to act.

“Not only does this bill shore up and stabilize our child care sector, it makes a huge leap forward in progress of actually fixing a business model that has never worked in Vermont or this country,” said Aly Richards, the CEO of Let’s Grow Kids, outside the House and Senate chambers Friday. “There hasn’t been enough money so that parents can afford child care or early educators can afford to make a living doing this most important work.”

A 2021 state report found that the median income for early childhood teachers in Vermont is less than $40,000 while assistant teachers make about $22,000. Child care workers also typically go without paid time off or health care.

If the bill becomes law, starting on January 1, 2024, the state will reimburse child care providers at a rate 35% higher than in fiscal year 2023 — enabling them to significantly raise wages.

Currently, families living at or below 150% of the federal poverty level are not charged a co-payment to receive a full subsidy from the state. The bill would eliminate co-pays for those making up to 175% of that metric, increasing that threshold from $45,000 to $52,500 for a family of four.

And the bill would extend partial child care subsidies to families up to 575% of the federal poverty level — $172,000 for a family of four. But Let’s Grow Kids has long said that no family should pay more than 10% of its income for child care, and particularly for many middle-class families, the measure will still fall short of those affordability goals.

“We have more work to do,” Richards said. “But what we see today is a quantum leap forward.”

Holding her one-year-old daughter in her arms, Rep. Jubilee McGill, D-Bridport, joked on the floor Friday that her colleagues had “front-row seats” to her own child care struggles. Her family currently qualifies for the state’s child care subsidy program, she said, but like so many across Vermont, she’d been unable to find a spot. And still, McGill said, she considered herself “lucky” to have found an informal arrangement with a family member.

“So many Vermonters — most of whom are women — are being held back from financial security and independence due to a lack of child care that prevents them from being able to work,” McGill said. “Our state’s amazingly talented child care workers, again — most of whom are women — are having to leave the work they love and had hoped to devote their lives to because they are unable to meet their basic needs.”

Though most Republicans voted against the measure, a number of them broke with their party to join Democrats, Progressives, the chamber’s lone Libertarian, and independents to pass the bill.

Rep. Ashley Bartley, R-Fairfax, was one of them. Like McGill, she also has a one-year-old, and she told her colleagues about being terrified about needing to return to work six weeks after giving birth without child care lined up.

“Not for lack of trying. At 12 weeks pregnant I applied for 10 different infant spots, and was placed on 10 different waitlists. Six months later, my daughter was still on those 10 waitlists,” she said.

And while she added that the financial implications of the taxes required to fund the measure were “undeniable,” she argued they were worth it.

“It is not easy to ask Vermonters — any Vermonter — to pay just a little more, which seems to be a theme of this session. However, the price of inaction is far greater,” she said.

The legislation has been substantially re-written since the Senate first introduced a child care bill in February. Gone, for example, is the lynchpin of the original measure, which would have enacted full-day prekindergarten in public schools statewide. Lawmakers scrapped the measure out of concern that it would destabilize private child care providers, although an “implementation committee” is tasked in this bill with studying the proposal.

In an impasse that nearly sank the legislation, the House and Senate were also at loggerheads for weeks over how to finance the measure. The upper chamber wanted a payroll tax, the lower chamber argued that raising corporate and income taxes would fund the measure more progressively.

But on the eve of adjournment, House leadership finally agreed to the Senate’s tax scheme. The bill would enact a payroll tax of 0.44% starting July 1, 2024; employers will be required to cover at least 75% of the new levy.

Therein lies the governor’s objection. Scott has long supported increased investments in child care, but has consistently drawn a line in the sand at raising taxes to do so.

House and Senate leadership have already scheduled a special legislative session for June 20-22 for veto overrides.

Written by Lola Duffort; originally published via VT Digger on May 12, 2023.