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LINCOLN — A proposal supporters say is key to making Nebraska child care more affordable so more parents can stay in the workforce took a step forward Monday despite objections that businesses, not government, should bear the brunt of the costs.
Legislative Bill 304 would permanently keep income eligibility levels for Nebraska’s child care subsidy program at the higher caps set in 2021, during pandemic recovery efforts. On a 39-8 vote Monday, the Nebraska Legislature advanced it to the second round of lawmaking debate.
State Sen. Wendy DeBoer of Omaha, who made the bill her priority for the session, called the subsidy necessary infrastructure for the state’s economy and said Nebraska cannot afford to lose more workers. Business chambers have estimated that 3,000 families are at risk of losing child care assistance if the bill dies.
“If we’re ever able to successfully incentivize businesses to come to our state, we need a basic investment in childcare infrastructure,” said DeBoer. “That’s what LB 304 is.”
She and others noted the average cost of one child in day care is $13,000 a year — more, DeBoer pointed out, than a Nebraska lawmaker earns.
State Sen. Kathleen Kauth, on the other hand, said COVID-19 has ended and so should expanded eligibility levels, which are set to expire in October. She was among legislators who thought caps should drop — if not to where they were in 2021, to a compromise in between.
“This money comes from our constituents,” Kauth said. “This is no different than us saying to the taxpayers, ‘Hey, listen, we want to take money from you, so we can give it to someone else so that they can have their child in childcare.’” As proposed under LB 304, household income eligibility caps would stay permanently at 185% of the federal poverty level rather than lowering back to 130%, as they were prior to the 2021 law. That means eligibility for a family of four would remain at about $59,000 in annual household earnings compared to the previous ceiling of about $42,000.
A Kauth amendment to set the proposed ceiling at 160% of the federal poverty level and add a “sunset” provision requiring legislative reevaluation after three years failed on an 18-24 vote.
DeBoer said COVID was not the only reason she pushed for higher income eligibility levels, saying the pandemic clarified the importance of child care to the economy.
Nebraska’s child care subsidy program is funded by federal and state funds and early child care advocates say the total annual expense is roughly $110 million. According to a legislative analysis, LB 304 would cost about $3.16 million more next year, an amount that would be swept from the state’s Health Care Cash Fund rather than general fund tax dollars.
Families receiving a subsidy generally still pay 7% of their gross income for child care, DeBoer said. Public dollars that pay the remainder go directly to the provider.
Monday’s vote came the same day the Greater Omaha Chamber of Commerce released a regional study intended to underscore the importance of child care access to economic growth. In the chamber’s eight-county coverage area alone, the findings showed that inadequate child care services translates into potentially 3,909 fewer filled jobs.
The research also showed an annual loss of $1.02 billion in business input, including both direct and multiplier effects, and $919 million in lost labor income.
During Monday’s debate, some skeptical state senators said private businesses should bear responsibility for their employees’ child care costs, while others talked about sacrifices parents make to stay at home rather than work.
