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Lawmakers attempt to tackle Oklahoma child care crisis with new business, provider tax credits

Oklahoma lawmakers are considering creating new tax credits in an effort to tackle the child care shortage.
Rebecca Rivas
Missouri Independent
Oklahoma lawmakers are considering creating new tax credits in an effort to tackle the child care shortage.

Oklahoma loses an estimated $1.2 billion in earnings, productivity and revenue annually due to the child care crisis.

House lawmakers on Tuesday approved the creation of two new tax credits designed to bolster the state’s struggling child care industry and help sidelined parents reenter the workforce.

Suzanne Schreiber, D-Tulsa, said House Bill 4147 is designed to increase capacity in a highly regulated industry that doesn’t have enough supply to meet demand and is often cost-prohibitive for parents.

“Those two things meeting are really keeping a lot of people out of the workforce,” Schreiber said. “Child care is a workforce industry, and we have to pull every lever that we can to increase affordability.”

Schreiber’s bill, which advanced by an 86-8 vote, would create a tax credit for Oklahoma employers who share in the cost of child care with employees. Businesses would receive a 30% tax credit — capped at $30,000 annually — if they either give employees direct money to help pay for child care costs, purchase spots at a third-party facility or operate their own. The tax credit would be capped at $5 million annually.

The measure also offers a $1,000 refundable tax credit for child care employees who are working in a licensed facility, have all licensing and certifications up to date, and have worked in the field for eight months or more, Schreiber said. That credit would be capped at $14 million a year.

She also has a second bill — House Bill 1808 — that would continue COVID-19 program providing free child care to the children of employees working in licensed centers. Schreiber expects it to receive a full House vote later in the week.

“We have to incentivize, recruit, retain our workforce,” Schreiber said.

She said the state already offers other tax credits and recruitment and retention initiatives in other industries.

“When we’re not doing that in the child care workforce, we’re shorting every other industry,” Schreiber said.

AJ Griffin, CEO of the Potts Family Foundation, which advocates for sustainable early childhood initiatives, said anything that helps providers and workers is helpful, but the plan is “not a silver bullet that will solve the shortage crisis.”

Griffin said she grappled with child care issues when she became a mother. Both her children are now adults.

“This has been a brewing crisis for the last 20 years, but it’s finally got the attention of the business community because it’s impacting their labor force so significantly,” she said.

She said legislatures across the country are trying to fill the gap between child care supply and demand, and Oklahoma is not alone in passing policies aimed at encouraging employers to provide access.

“It’s an industry that our current financial model just doesn’t work for parents, for providers,” Griffin said. “It’s not necessarily working for the government. It’s going to take all kinds of approaches to solve the problem. It’s not (going) to solve it, but it certainly won’t hurt.”

An October study released by the Greater Oklahoma City Chamber estimated Oklahoma loses $1.2 billion in earnings, productivity and revenue annually due to the child care crisis.

The study reported that about 2.3 million women nationally have left the workforce since the COVID-19 pandemic began, many to care for children.

An additional 99,000 women would be in Oklahoma’s workforce if their participation rates equaled that of men, the study found.

Of Oklahoma City workers, 27% reported they couldn’t find affordable child care, 22% couldn’t access it because daycares were at capacity, and 86% reported their employers did not provide any related benefits.

Over half of Oklahomans live in child care deserts, the 15th worst percentage in the country, according to the Center for American Progress.

Rep. Jim Olsen, R-Roland, who voted against the credits, said he would support them if stay-at-home mothers were also eligible.

“I understand child care is expensive, money is short for many people,” he said. “But what this can inadvertently do is if you’ve got a couple with children, and they’re really wondering what they should do, this could push her out into the workforce, when arguably, at least in some cases, it’s actually better for the children if the woman chose to stay home if they were inclined that way.”

Chad Warmington, president and CEO of The State Chamber of Oklahoma, said Oklahoma can’t have the workforce it wants if it doesn’t have the infrastructure in place to support it.

“We view child care as workforce infrastructure. Oklahoma has lost a thousand daycares in the last 10 years,” he said in a statement. “We have to be purposeful and thoughtful about addressing the shortage of child care around the state of Oklahoma. HB 4147 is certainly a big step in the right direction.”

Oklahoma Voice is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Oklahoma Voice maintains editorial independence.

Janelle Stecklein is editor of Oklahoma Voice. An award-winning journalist, Stecklein has been covering Oklahoma government and politics since moving to the state in 2014.
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