Iowa House passes bills to increase child care affordability, access. Here's what they'd do.

Stephen Gruber-Miller
Des Moines Register

The Iowa House has passed a package of bills aimed at making child care more available and affordable in the state.

House lawmakers debated and passed half a dozen proposals Wednesday evening that would double the income threshold for a pair of child care tax credits; allow families to gradually phase out of a state child care assistance program as their incomes increase; raise reimbursement rates for child care providers; create tax incentives for businesses that offer child care to their employees; and create a new matching grant fund for communities that participate in child care workforce programs. 

The measures must still be considered by the Iowa Senate before they could go to the governor's desk to be signed into law.

Republicans, who hold a 59-41 majority in the House, have made child care access and affordability priorities this year. They were working on similar legislation last year before the coronavirus pandemic disrupted the legislative session.

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Each of the bills passed the House Wednesday night with bipartisan support, but Democrats offered amendments to several of the bills to further increase tax credits and pay rates for child care providers and to provide additional oversight to child care facilities. Republicans voted the amendments down.

Here's what each of the bills would do:

Slope the 'child care cliff'

Current Iowa law cuts families' child care benefits off when they earn more than 225% of the federal poverty level.

House File 302 would address the "child care cliff" by gradually phasing out those who are eligible for the Department of Human Services' child care assistance program, rather than cutting them off entirely. The bill passed on a vote of 94-0.

The bill would phase out the assistance to families that make between 225% and 250% of the federal poverty level, or 275% for those with special needs care. The change would cover an estimated 120 additional children.

"This allows families to become more successful, more independent, to accept raises and promotions in their jobs and incrementally decrease their dependence on the child care assistance program, providing that off-ramp as their income increases," said Rep. Ann Meyer, R-Fort Dodge.

Double the income threshold for two child care tax credits

House File 230 would allow individuals with incomes of up to $90,000 to receive an early childhood development tax credit and child and dependent care tax credit.

Currently, those making up to $45,000 can access the tax credits. The bill passed on a vote of 93-1.

Give tax credits to employers that offer child care

House File 370 would provide businesses with tax credits if they offer child care benefits to their employees, matching a similar federal tax credit. The Iowa Department of Revenue estimates that about 50 businesses now use the federal tax credit and would be eligible for the state program, and that more would sign up if the bill becomes law. It passed the House on a vote of 88-6.

The bill's floor manager, Rep. Jane Bloomingdale, R-Northwood, called the bill "a win-win" for employers and employees.

"This bill really addresses two problems that we see in Iowa. We have a workforce shortage and we have a child care shortage. By providing child care, it helps those employers retain and recruit workers and it helps employees go back to work when they know they have affordable and reliable child care," Bloomingdale said.

Increase the number of children allowed to be cared for in child care homes

House File 260 would allow child care homes in Iowa to provide child care for six children, if at least one of the children is school-aged. Currently child care homes can care for up to five children.

Rep. Joel Fry, R-Osceola, said the bill represented "a small solution to some issues in rural Iowa."

Democrats offered an amendment to require child care homes that take on an additional child to enter into a child care assistance provider agreement with the Iowa Department of Human Services.

"This would allow the state to have some oversight over those non-regulated programs that are now going to be increasing their numbers," Rep. Tracy Ehlert, D-Cedar Rapids, said of her amendment.

Republicans voted that proposal down but the bill passed on a vote of 70-24.

Increase reimbursement rates to child care providers

House File 292 would increase reimbursement rates to child care providers participating in the state child care assistance program. The rate would be set at the 50th percentile of the most recent market rate survey.

Democrats offered an amendment to the bill to increase the reimbursements to the 75th percentile, but that measure failed.

"You can’t talk a good game about wanting more providers, more quality, more accessibility, more affordability and at the same time pay our providers a poverty wage," said Rep. Mary Mascher, D-Iowa City.

Fry, the Osceola Republican, said the $25.4 million price tag for the Democrats' proposal isn't factored into the state budget but he defended the increase included in the bill.

"We in the state of Iowa spend over $160 million in child care currently and this piece of legislation puts another $13.4 million into child care rates," he said.

The bill passed on a vote of 90-4.

Help pay for child care workers' education

House File 301 would create a child care workforce matching grant program and a fund controlled by the Early Childhood Iowa State Board within the Iowa Department of Education.

It would award grants to communities that participate in the TEACH and WAGE$ programs which provide financial assistance to child care workers as they pursue higher education.

The bill passed on a vote of 92-2.

Correction: A previous version of this article misstated the vote total for House File 230.

Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.