Many parents can’t afford child care. And if they can, there aren’t enough slots.
That’s because staff aren’t paid enough and turnover is high. But if providers raise pay, then they must raise prices. More parents can’t afford child care.
The chicken-and-egg predicament is real — and even worse in Indiana.
The Economic Policy Institute ranks all states for their child care costs. When I opened the site, the first to pop up was Alabama. I whistled a bit at the average of $6,000 for infant care annually, or $5,184 for a 4-year-old child.
But when I navigated to Indiana’s page, my jaw dropped.
The average annual cost of care in Indiana is $12,612 for infants, or $9,557 for 4-year-olds.
To put that in perspective, infant care in Indiana costs 40% more per year, on average, than in-state tuition for a four-year public college.
The institute also ranks Indiana 18th worst out of the 50 states and the District of Columbia for most expensive infant care.
Infant care for one child would take up 22% of a median family’s income in Indiana. According to the U.S. Department of Health and Human Services, child care is affordable if it costs no more than 7% of a family’s income. By this standard, only 5% of Indiana families can afford infant care.
No wonder Indiana parents are sitting out the workforce and staying home with children instead. This has led to tens of thousands of unfilled jobs.
Indiana got a bit of hope recently when the Indiana Family and Social Services Administration announced a new employer-sponsored child care fund.
The program offers $25 million in seed money for child care initiatives led by employers to try to help the 55% of Hoosiers who live in a child care desert.
But there is more to be done, especially because providers will face a steep decline in available financial support when emergency federal child care assistance ends this year.
An interim study committee tasked with evaluating child care needs came up with several recommendations. A few that would help with staff shortages are:
-Making child care workers currently employed by licensed child care programs categorically eligible for public subsidies under the Child Care and Development Fund and On My Way Pre-K programs.
-Designating child care credentials as a tuition-free option under the Workforce Ready Grant.
-Reducing the age requirement for working alone in an infant or toddler classroom in a licensed child care center from age 21 to age 18 and for working, supervised, in school-age child care to 16.
These examples are a constructive start. But it’s hard to see any substantive improvement without direct state investment of dollars. That could be in terms of a child care tax credit, which Democrats have pushed for years.
According to the Institute on Taxation and Economic Policy, 14 states provide Child Tax Credits to reduce poverty, boost economic security and invest in children. This year alone, lawmakers in three states – Minnesota, Oregon and Utah – created new Child Tax Credits while lawmakers in seven states expanded existing credits. Meanwhile, Arizona lawmakers created a one-time nonrefundable child tax rebate.
A bill filed earlier this year would have provided such a credit to Hoosiers with an adjusted gross income of less than 250% of the federal poverty level. It would have cost between $100 million and $229 million annually beginning in fiscal year 2024.
Lawmakers also could expand a tax credit they created in the 2023 budget for employers to create child care opportunities. It was funded with just $2.5 million, which simply isn’t enough to make a dent in this problem.
And while prekindergarten is not child care, fully funding a program that already has immense upside for the state and its next generation’s future success would help ease the access issues and free up Hoosier workers.
Most importantly, legislators can’t kick this can down the road claiming it’s not a budget year. There is a short session for a reason and it is to address critical issues like this — even if it costs money.
Niki Kelly is editor-in-chief of indianacapitalchronicle.com, where this commentary previously appeared. She has covered Indiana politics and the Indiana Statehouse since 1999 for publications including the Fort Wayne Journal Gazette. Send comments to [email protected].