An Alabama bill is proposing to offer tax credits and grants to employers and child care providers to create more affordable child care options that would help thousands of families in the state.
The bill, HB358, aims to encourage employers to provide child care for their employees and enable child care providers to offer more readily available, affordable and quality child care through tax incentives.
Alabama’s labor force participation rate ranks among the bottom of U.S. states. Alabama’s rate was 57.4 percent in March, according to the Alabama Department of Labor. The national rate was 62.7 percent in March, according to the U.S. Bureau of Labor Statistics.
It is part of the “Working for Alabama” package that aims to remove barriers to people joining the workforce and raise the state’s low labor force participation rate.
The bill would provide employers with a tax credit of up to $600,000 for providing or expanding on-site child care facilities for employees and offer incentives for companies to partner with qualified child care providers. The total amount of employer tax credits would be capped at $15 million in 2025, $17.5 million in 2026, and $20 million in 2027.
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Child care providers would be allowed to apply for tax credits of up to $25,000 per year, while nonprofit child care providers could apply for grants of up to $50,000 a year.
The bill would provide child care options for about 7,000 families during the first year and about 24,000 families over the three years of the program, according to AL.com.
The bill unanimously passed the Alabama House on Tuesday and now moves to the state Senate, where it will be sponsored by state Senator Garlan Gudger, a Republican.
Gudger said about 85,000 Alabama families do not have access to affordable and quality child care.
“We are committed to removing these obstacles that keep Alabamians, and especially women, on the sidelines of participating in this labor force,” Gudger said, according to AL.com. Gudger has been contacted for further comment via email.
The cost of child care has been found to impact the number of mothers working: a 10 percent increase in the price of child care was associated with a 1 percent drop in maternal employment rates, according to the Labor Department.
HB358 could help more women in Alabama get into manufacturing, Karen Johnston, Toyota North American’s regional director of governmental affairs, said at a news conference on Tuesday.
“The main barrier for women to enter or reenter the workforce is lack of child care,” Johnston said, according to AL.com. “Providing high quality, affordable, and reliable child care really is the key to maximizing workforce participation in manufacturing.”
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