‘It’s a workforce issue,’ Nebraska lawmakers say of child care subsidy bill they advanced

LINCOLN — A proposal supporters say is key to making Nebraska child care more affordable so more parents can stay in the workforce took a step forward Monday, despite objections that businesses, not government, should bear the brunt of the costs.

Legislative Bill 304 would permanently keep income eligibility levels for Nebraska’s child care subsidy program at the higher caps set in 2021, during pandemic recovery efforts. On a 39-8 vote Monday, the Nebraska Legislature advanced it to the second round of lawmaking debate.

State Sen. Wendy DeBoer of Omaha, who made the bill her priority for the session, called the subsidy necessary infrastructure for the state’s economy and said Nebraska cannot afford to lose more workers. Business chambers have estimated that 3,000 families are at risk of losing child care assistance if the bill dies.

“If we’re ever able to successfully incentivize businesses to come to our state, we need a basic investment in childcare infrastructure,” said DeBoer. “That is what LB 304 is.”

She and others noted the average cost of one child in day care is $13,000 a year — more, DeBoer pointed out, than a Nebraska lawmaker earns.

State Sen. Kathleen Kauth, on the other hand, said COVID-19 has ended and so should expanded eligibility levels, which are set to expire in October. She was among legislators who thought caps should drop — if not to where they were in 2021, to a compromise in between. 

“This money comes from our constituents,” Kauth said. “This is no different than us saying to the taxpayers, ‘Hey, listen, we want to take money from you, so we can give it to someone else so that they can have their child in childcare.’” 

Chamber study echoes concern

As proposed under LB 304, household income eligibility caps would stay permanently at 185% of the federal poverty level rather than lowering back to 130%, as they were prior to the 2021 law. That means eligibility for a family of four would be permanently extended to about $59,000 in annual household income compared to the previous ceiling of  about $42,000.

A Kauth amendment to set the proposed ceiling at 160% of the federal poverty level and add a “sunset” provision requiring legislative reevaluation after three years failed on an 18-24 vote.

DeBoer said COVID was not the only reason she pushed for higher income eligibility levels, saying the pandemic clarified the importance of child care to the economy, but a combination of factors drove interest.

Nebraska’s child care subsidy program is funded by federal and state funds and early child care advocates say the total annual expense is roughly $110 million. According to a legislative analysis, LB 304 would cost about $3.16 million more next year, an amount that would be swept from the state’s Health Care Cash Fund rather than general fund tax dollars.

Families receiving a subsidy generally still pay 7% of their gross income for child care, DeBoer said. Public dollars that pay the remainder go directly to the provider.

Monday’s vote came the same day the Greater Omaha Chamber of Commerce released a regional study intended to underscore the importance of child care access to economic growth. In the chamber’s eight-county coverage area alone, the findings showed that inadequate child care services translates into potentially 3,909 fewer filled jobs. 

The study also showed an annual loss of $1.02 billion in business input, including both direct and multiplier effects, and $919 million in lost labor income.

Hot dogs, mac and cheese

During Monday’s debate, some skeptical state senators said private businesses should bear responsibility for their employees’ child care costs, while others talked about sacrifices parents make to stay at home rather than work.

State Sen. Ben Hansen of Blair said that when he and his wife had a daughter, he worked extra hours, lived in a “crummy apartment” and ate hot dogs and macaroni and cheese until he “couldn’t stand it anymore” so his wife could be a stay-at-home mom.

He said businesses, churches and local city and county governments could step up to help, asking, “Where do we draw the line?”

“The more government takes care of our children, the less likely parents will,” said Hansen. 

State Sen. Mike Moser of Columbus said the proposed bill “messes with the free market.”

State Sen. Merv Riepe of Ralson said that while he worked as a hospital administrator, his employer’s response was to build and operate an around-the-clock child care center as a “cost of doing business” and without use of public funds.

“We must increase our sources of income and slow down our entitlements,” he said.

State Sens. Fred Meyer of St. Paul and Tom Brandt of Plymouth were among rural Republican lawmakers who supported the bill. Meyer said a review of his district showed a higher-than-anticipated share of parents who benefit from the subsidy.

Brandt described a small house in his district that was converted to help meet a child care need. But he said a “crazy” list of code and safety requirements limits the launch of new providers. Others talked of the high turnover rate of child care employees.

“This bill is helpful,” Brandt said. If it does not pass, he said, Nebraska would fall to the bottom three states for child care subsidies based on income eligibility. If it becomes law, he said, Nebraska holds “kind of in the middle of the pack.”

New dad perspective

State Sen. Brad von Gillern, an Omaha lawmaker who chairs the Legislature’s Revenue Committee, said some might find his support of LB 304 “confusing or surprising” — but he needed only look at his own family to see the value. 

Von Gillern said one of his daughters is able to work and enroll her kids in child care. Another daughter stays home, because “she can’t afford to go to work.” 

“She would truly be trading dollars if she worked outside the home,” von Gillern said.

Also concerning, he said, is that some families deterred from working because of high daycare costs might end up more dependent on other forms of government aid.  

“Are we really about making sure those who want to work can work?” he asked.

State Sen. George Dungan of Lincoln offered a personal perspective. A brand new dad, he and his wife were elated to have been accepted by their choice daycare provider — until, he said, they learned the $1,300 a month price tag.

The couple now has decided she will go back to work as a mental health professional after maternity leave, and he will run his law practice from home, relying on his support system when he has to appear in court. 

 Dungan said not all families are as fortunate.

“This is not just a want, it is a need for families across the entire state,” he said. “If we want to ensure there is truly economic development … and that Nebraska is open for business.” 

State Sen. Machaela Cavanaugh of Omaha said she does not disagree that employers should help cover child care costs. But she said employer participation is not the “reality we’re in today.”

“We have to do something today to ensure that families can put food on the table,” she said. “So that parents can show up to work and know their child is being taken care of.”

Monday’s debate follows a failed attempt last week to include the child care subsidy proposal as part of the mainline state budget. The Appropriations  Committee had tried to include it and a new private school voucher provision in the broader budget package, but both were removed after intense and prolonged debate.

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​This story is provided by States Newsroom, a nonprofit state news network and Blox Digital content partner.