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Analysis: Childcare Tax Relief

Nicole Switalski, SLU/YouGov Poll research assistant, provides analysis on raising teachers' salaries following the release of the February 2023 SLU/Gov Poll results. 

It is increasingly difficult for Missourians to find affordable childcare. Over half of all Missourians live in a 鈥渃hildcare desert鈥 where over 33% of the population in a single census tract are at least a half mile away from a childcare provider in urbanized areas or at least 10 miles away in rural areas. In Missouri, the average cost of childcare is over $10,000 per year, which is over a third of the average single-parent鈥檚 income. According to a study by the Missouri Chamber of Commerce, from 2021 to 2022 28% of parents stopped work, changed jobs, or did not take a job because of childcare struggles. It is also estimated that the state loses $1.3 billion annually due to childcare hurdles. The state government is aware of these difficulties and has proposed potential programs to alleviate the issue of childcare through subsidies and tax credits. 

Governor Parson鈥檚 state of the state address highlighted key workforce development and education initiatives targeting childcare. Parson outlined a funding request with $78 million going toward childcare subsidies. The Missouri House of Representatives has included these directives in HB 870, which authorizes three new tax credit programs for teachers, employers, and childcare providers. One program is the Employer-Provided Childcare Assistance Tax Credit Act (EPCATC), which provides benefits to employers who offer childcare assistance to their employees. Another program is the Child Care Providers Tax Credit Act (CCPTC) which assists childcare providers with overhead costs like payroll and facility upkeep. 

In February 2023, the SLU/YouGov Poll asked whether Missouri voters favored or opposed an EPCATC program in which 鈥淓mployers who provide childcare assistance should receive a state tax credit for 30% of expenses paid to a childcare facility.鈥 In HB 870, the EPCATC Act applies when a business acquires a 鈥渜ualified childcare expenditure鈥. These qualified expenditures include property construction or operating costs including compensation to employees that will be used as part of a childcare facility, or a contract with a childcare facility to provide services to employees of the taxpayer. The 鈥渢axpayer鈥 is defined as a corporation, who can claim a tax credit up to 30% of the total qualified childcare expenditures.

Likely voters' responses to 'Do you favor or oppose the following policies: Employers who provide childcare assistance should receive a state tax credit for 30 percent of expenses paid to a childcare facility?': 64% Favor, 13% Oppose, and 23% Not sure.

Likely voters' responses to 'Do you favor or oppose the following policies: Employers who provide childcare assistance should receive a state tax credit for 30 percent of expenses paid to a childcare facility?': 64% Favor, 13% Oppose, and 23% Not sure.

 

The SLU YouGov Poll also asked whether Missouri voters favored or opposed a CCPTC program where 鈥淐hildcare providers with at least three employees may claim state credit equal to employer withholding tax and 30% of capital expenditures.鈥 In the HB 870, the CCPTC Act allows childcare providers with three or more employees to claim a tax credit in an amount equal to the provider鈥檚 eligible employer withholding tax, and up to 30% of the provider鈥檚 capital expenditures. 鈥淐apital expenditures鈥 include construction, renovation, or rehabilitation of a childcare facility to comply with facility regulations. The HB 870 would enable childcare facilities to decrease cost of overhead which could in turn increase employee salary or decrease the cost of childcare for Missourians.

Likely voters' responses to 'Do you favor or oppose the following policies: Childcare providers with at least three employees may claim state credit equal to their employer withholding tax and 30% of their capital expenditures?': 41% Favor, 12% Oppose, and 48% Not sure.

Likely voters' responses to 'Do you favor or oppose the following policies: Childcare providers with at least three employees may claim state credit equal to their employer withholding tax and 30% of their capital expenditures?': 41% Favor, 12% Oppose, and 48% Not sure.

 

When looking at the results of those who favored or opposed the two policies, there is more overall support for the EPCATC than the CCPTC. 64% of all respondents favored the EPCATC, where 41% overall favored the CCPTC. Among subgroups for the EPCATC question, more Democrats than Republicans favored the policy, at 75% versus 58%, respectively. Looking at the CCPTC, there was a smaller gap among party lines, with Democrats favoring at 47% and Republicans at 35%. The results also varied across age groups. Among those surveyed over 65, 71% favored the ECTACT, which was the highest among any age group. For the CCPTC, those aged 18-29 favored the policy at 48%, the highest rate among the age groups. 

As the Missouri Republican Missouri state legislators continue to try to limit transgender athletes鈥 participation in school sports, Kaitlin Klasen provides analysis on how likely Missouri voters feel about this issue following the release of the February 2023 SLU/YouGov Poll results.