LANSING, Mich. (Oct. 17, 2024) – Today, the Michigan Senate Housing and Human Services Committee heard testimony on the state of child care in Michigan, its economic impact, and the legislation led by State Sen. Kristen McDonald Rivet (D-Bay City) aimed at improving both.
Michigan, like the rest of the country, is in the midst of a child care crisis. In the last decade, America has lost almost 20 percent of its child care capacity. In Michigan, the loss is doubled at 40 percent. Private child care serves about 80 percent of children birth to 5, but most are struggling to keep their doors open. As closures become all too common, centers that do stay open often have waiting lists that exceed two years, particularly for infants.
“The broken child care system is a threat to the economic prosperity of our state. There is no one solution, and this is not a time for small fixes,” said Sen. Kristen McDonald Rivet. “Moving the system from broken to soluble requires a large, sustained public investment on both the demand and supply side of child care. The legislation and solutions I have worked on aim to make child care affordable for families, and sustainable for child care professionals and entrepreneurs.”
Michigan ranks 39th in the nation for workforce participation, and the lack of child care is the top reason young workers are choosing not to enter the workforce. Leading business voices had representatives testify at today’s hearing on how the lack of child care drastically restrains Michigan’s economy, and on how possible changes could be a financial boost to workers, employers, and the state.
This summer, more than 80 leaders from Michigan’s non-profit, business, and faith communities endorsed the Working Parents Tax Credit, a key component of Sen. McDonald Rivet’s proposal to alleviate Michigan’s child care crisis.
Senate Bill 838 would create the Working Parents Tax Credit, putting dollars back in the pockets of parents with children aged 3 and younger, so they can better afford child care. Based on the same eligibility as the Earned Income Tax Credit, it would be paid monthly for an annual total of $5,500 per young child per family.
“The Working Parents Tax Credit would be life-changing. (It) encourages work and provides a significant boost in income, and would benefit far more families than any program,” remarked Lou Glazer, President of Michigan Future Inc. “By incentivizing and rewarding work, this credit is a win for Michigan families raising young children, employers, and the overall state economy. It’s fair… efficient… and simple.”
Child care providers and parents are vital voices in solving for this crisis, and several shared their experiences at this hearing.
“Michigan has done a great job with raising the subsidy rate, but it’s just not enough to retain our staff,” shared Taunya Sims, a home-based provider with thirty years of experience. “I open my doors at 3:25am, and my last child leaves our program at almost 11pm, because we have to provide care for the working families so they can provide for their own families. But we need extra funding to continue to do that.”
On average, it takes roughly $15,000 a year to provide full-time care for a child under the age of 5 (full time defined as 7:00 am to 6:00 pm). In a state where over 60% of jobs pay less than $50,000 a year, the annual tuition presents an unsustainable burden on working parents, often reaching as high as 40% of their take-home pay.
Barbara Young, advocate and parent with the Detroit Parent Network, testified that changes are needed urgently. “With the cost being unaffordable, especially for families earning middle to low income, we were faced with one parent staying home. For a family of six, that does not cover everything. The subsidies aren’t enough. It would help to have more resources… and for the money to go directly to the families.”
This is the first hearing related to the bicameral bills and budget measures introduced earlier this year to lower child care costs for Michigan families and providers, boost the state’s workforce, and set all kids up for success. That plan includes the following components:
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Public Investment in Child Care (Budget Recommendations including operational grants and start-up capital)
Testimony made clear that an immediate, sustained public investment is required to change the trajectory of the rapid financial decline of child care in Michigan. The $1.5 billion cost of the proposed investment pales in comparison to the $2.8 billion that Michigan loses annually, in the form of workforce productivity and economic gains, due to its lack of reliable child care. That figure is cited in this recent study from the US Chamber of Commerce, the Michigan Chamber of Commerce and the Early Childhood Investment Corporation.