With the rising cost of child care across New York, U.S. Senator Kirsten Gillibrand is working on legislation to make child care more affordable and accessible for working parents.
In 2012, New York was ranked the second least-affordable in the nation for full-time day care for an infant, according to a report by Child Care Aware. A two-parent family in New York spent an average of 16.5 percent of their annual income on care for their infant. For a single mother in New York, the cost of care was greater than 57 percent of her income. In response to the squeeze on New York working families, Gillibrand is championing legislation to address the lack of access to quality, affordable child care.
Gillibrand's push for affordable child care is part of her American Opportunity Agenda aimed at ensuring more working women have a fair shot at earning financial security by modernizing America's outdated workplace policies.
"If you can't afford child care, as many middle class families can't, and you don't have a family option, the choice you're left with is to leave your job and stay at home to care for your children," Gillibrand said. "That means less income for working families, more women leaving the workforce, and a weaker middle class. It doesn't have to be this way. We can keep more working mothers in their jobs, and more children in quality day care - when we make it affordable - and make our policies reflect today's reality that women have to work for a living. This isn't a lifestyle choice. This is a fact of survival for many New York families."
Statistics show that today's working families must rely more on child care than ever before. A generation ago, a working mother with young children was far less common. In 1975, 39 percent of mothers with young children worked outside the home; in 2005, that number was 63 percent. Half of middle-class working moms with children under the age of 5 rely on day care centers or other paid care. Across the nation, more than 6.7 million children are in child care outside the home each day. Families with young children on average spend about $6700 a year on child care, nearly as much as what the average family spends on groceries.
In Western New York, there were nearly 68,000 families with children under six years old. For a year of child care in a day care center, families spend an estimate of up to $10,365 for an infant, up to $9,802 for a toddler 1.5-2 years, up to $9,230 for a toddler 3-5 years and up to $8,667 for a child age 6-12.
EXPANDING THE DEPENDENT AND CHILD CARE TAX CREDIT (DCTC)
Gillibrand is working to more than double the Dependent and Child Care Tax Credit (DCTC). Currently, the child and dependent care tax credit is worth a maximum of 35 percent of child care expenses, up to $1,050 per child or $2,100 for two children. The credit applies to any child under the age of 13 and to disabled dependents of any age. The Right Start Child Care and Education Act would increase the maximum credit from $1,050 to $3,000 per child, by raising the percentage of the tax credit to 50 percent and doubling eligible expenses. The legislation also makes the tax credit fully refundable, allowing low-income families with no tax liability to receive the full benefit.
For example, under current law, a New York family with two children earning $30,000 a year, receives a credit of $1,620 ($810 per child). Under the Gillibrand proposal, which would make the tax credit refundable, the same family with two children could receive a maximum credit of $6,000 ($3,000 per child).
Senator Gillibrand's legislation would also encourage more New York businesses would be able to provide on-site child care services for their employees. Legislation would provide employers with a tax deduction worth 35 percent of the cost of creating these facilities. Currently, employers can only deduct 25 percent of their costs.
CREATING A NEW CHILD CARE TAX DEDUCTION
Gillibrand has introduced the Child Care Deduction, which would allow middle-class families to deduct the cost of child care from their taxes as a business expense. The new legislation would create a new tax deduction, allowing families to deduct as much as $14,000 a year for child care expenses ($7,000 for one child).
Families would have the option of choosing an above-the-line deduction to help mitigate the high cost of child care. After all, child care expenses are necessary, non-optional costs to families with working parents that cannot forfeit needed wages.
For example, under current law, a family with two children earning $100,000 can receive a maximum credit of $1,200. Under the Gillibrand proposal, this family spending $14,000 a year on child care expenses could deduct the full amount, therefore, lowering their taxable income by $3,500.
CHILD CARE AND
DEVELOPMENT BLOCK GRANT ACT
Gillibrand is an original cosponsor of the Child Care and Development Block Grant (CCDBG) Act which is being debated on the Senate floor this week. This program was last reauthorized in 1996. For Fiscal Year 2013, New York State received $98 million in CCDBG funding to help low-income families gain access to quality, affordable child care and after-school programs while parents work or attend school. This program serves more than 1.5 million children nationwide every month, including over 120,000 children in New York State. Child care assistance is administered through vouchers or certificates, which can be used by parents for the child care provider or program of their choice. The legislation would require states to devote more of their funding to quality initiatives, including training, professional development, and professional advancement of the child care workforce. The bill ensures that CCDBG providers meet certain health and safety requirements, related to prevention and control of infectious diseases, first aid and CPR, child abuse prevention, administration of medication, prevention of and response to emergencies due to food allergies, prevention of sudden infant death syndrome and shaken baby syndrome, building and physical premises safety, and emergency response planning. The bill would also improve early childhood care by requiring states to focus on infant and toddler quality initiatives as well as how best to meet the needs of children with disabilities. Lastly, it would require mandatory background checks for child care providers in the CCDBG program.