A breakthrough in negotiations between House and Senate lawmakers has cleared the path for legislation that will pump an additional $120 million a year into Vermont’s child care system.
The two chambers had been at an impasse for weeks over how to finance the child care legislation. But Democratic leaders in the House conceded Thursday afternoon to the payroll tax that Senate lawmakers want to use to generate the revenue needed to pay for the program.
“Only those who have been involved in the negotiations know how hard fought this concession on the funding source has been,” said Washington County Sen. Ann Cummings, who chairs the Senate Committee on Finance.
House lawmakers favored an increase in the corporate and personal income taxes to fund the new spending. Cummings, however, said the broad-based income tax would hit the pocketbooks of Vermonters who might not ever need child care services.
“This is a narrow benefit,” she said. “It benefits primarily employers and workers, and we stuck to the payroll tax.”
“Hundreds of programs would close if we did not make an investment in child care right now. Everyone felt that urgency.”Aly Richards, CEO of Let's Grow Kids
Brattleboro Rep. Emilie Kornheiser, chair of the House Committee on Ways and Means, said increases in the corporate and personal income taxes would have allowed the state to raise a disproportionate share of new revenues from businesses and individuals that have the financial capacity to pay them.
“It was really important to our committee to ensure that when we were raising a tax on behalf of a social program that’s for the greater public good … that we were raising revenue from folks who could most afford it, in a progressive way, but making sure that everyone was paying their fair share,” Kornheiser said.
She said the House ultimately relented to the Senate position in order to avoid leaving the session without a child care bill.
“I think it’s important to all of us that we pass some groundbreaking work to support early care and education this session,” Kornheiser said. “And so we’re going forward and doing that.”
Aly Richards, CEO of Let’s Grow Kids, which led the lobbying effort on behalf of the legislation, said the legislation averts a collapse of the child care system that would have dealt a catastrophic blow to the state’s economy.
“Hundreds of programs would close if we did not make an investment in child care right now. Everyone felt that urgency,” she said. “Literally, Vermonters could not afford for us to leave the session without a bill, so this is huge.”
The bill infuses the child sector with new funding primarily by increasing the subsidies the state pays to child care providers on parents’ behalf.
Right now, income eligibility for those subsidies tops out at $105,000 a year for a family of four. The legislation expands that threshold to about $172,000 for a family of four. It also increases the size of the subsidies that providers receive.
While families making more than 300% of the poverty level - $90,000 annually for a family of four – won’t see any major immediate reductions in overall child care expenses, Richards said they’ll benefit from the increased revenues that will be flowing to their child care providers.
“What we’re going to see from this bill is new sustainable revenue into a field that has been starved for resources. And we’ve all seen what that’s done – you don’t have enough supply, it is not available or affordable for families, and early educators cannot stay and do the work that we need them to do in the job they’ve trained for,” she said.
The House is scheduled to give final approval to the legislation in a floor vote on Friday.
Gov. Phil Scott included a $56 million increase in child care spending in his budget proposal earlier this year, which he said Vermont could afford without raising new revenues. He’s called on lawmakers in recent weeks to defer to his plan, and suggested he’ll veto any legislation that includes increases in taxes or fees.
The 26-to-4 vote in the Senate Thursday suggests that body has the votes to override a possible veto.
The House will need at least 100 votes in favor of the bill in order to do the same.
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