LANSING, Mich. (March 12, 2025) — Today at a press conference joined by policy advocates and experts, Sen. Sue Shink (D-Northfield Twp.) and Senate Democrats unveiled a bold, transformative proposal that would provide the “Building Blocks” Michigan needs to uplift working families and ensure they have a fair shot at a better quality of life for themselves and their children.
- Providing a significant income boost to working families through a targeted Working Parents Tax Credit;
- Expanding Rx Kids statewide, a first-of-its-kind program that provides cash payments to new mothers and their babies; and
- Tackling the child care crisis from both the demand and supply side.
“Every parent should have the opportunity to help their child succeed. Being a parent is not an easy task, and it truly takes a village to raise a child,” said Sen. Shink. “Our new plan aims to provide parents with the support they need to ensure their children have the essential building blocks to thrive in Michigan.”
Cutting Taxes for Working Families
From diapers to daycare, the essentials are more expensive than ever due to inflation and skyrocketing child care costs. In the first year alone, raising a new baby costs more than $20,000, a staggering amount that is more than a third of an average U.S. family’s annual household income. To address the issue head-on and help families keep up with the rising cost of parenting, Senate Democrats are proposing a tax credit of $5,500 for working families with children under the age of three. The credit would be both easy to apply and qualify for, with eligibility based on the existing Earned Income Tax Credit.
“Parents work hard every day to provide for their families, but many still struggle to make ends meet,” said Alison Freas, President and CEO of The SOURCE. “Returning more of their hard-earned money back to parents would be life-changing for so many. The Working Parents Tax Credit would give families the support they need to keep up with rising costs, provide stability for their children, and cover unexpected costs.”
Improving Families’ Physical and Economic Health
Rx Kids is a first-of-its kind program here in the United States, initially launching in Flint, Michigan in October 2023, and is slated to expand to several more communities this year.
The program supports parents and babies by providing all pregnant moms in a community, regardless of income, with no-strings-attached cash of $1,500 during pregnancy and $500 each month throughout the baby’s first year. Research from Rx Kids and similar initiatives shows that universal child cash transfer programs are an innovative solution to poor health outcomes for children and child poverty, helping to increase housing security, bolster access to nutritious food, and improve maternal and child health.
“From Flint to Kalamazoo to the Eastern Upper Peninsula, Rx Kids is efficiently and effectively improving family financial stability and health outcomes by putting money directly into the pockets of new moms and babies. Michigan is making history, and I’m so grateful for the leadership of Governor Whitmer and Senators Cherry and Santana in helping bring this life-changing program to life,” said Dr. Mona Hanna, Flint pediatrician and Michigan State University College of Human Medicine associate dean of public health. “I look forward to continuing to work with the Michigan Legislature to expand Rx Kids statewide so that every Michigan baby gets the strongest, healthiest start possible.”
Tackling the Child Care Crisis
In the last decade, Michigan has lost 40% of its child care capacity, a level twice that of the national average. Michigan currently ranks 39th in the nation for workforce participation, and the lack of child care is cited as the top reason young workers are choosing not to enter the workforce. As a result, the state loses out on an estimated $2.8 billion annually in the form of workforce productivity and economic gains.
To tackle this crisis, this plan would make child care more affordable for families and more sustainable for child care professionals and entrepreneurs by:
- Codifying the innovative bipartisan program, Tri-Share, that splits the cost of child care equally among employers, the state, and employees;
- Tying the Child Care Reimbursement Rate to inflation to provide certainty and consistency to providers; and
- Updating licensing requirements for child care centers and removing burdensome barriers to opening and operating centers.
“This vision reflects the priorities of Senate Democrats and outlines a bipartisan, practical approach that offers real solutions to the challenges faced by parents and all Michiganders,” said Sen. Shink. “Investing in early childhood development benefits not only parents and children but everyone in our community. From workforce development to economic improvement, our entire state thrives when we set our families up for success. I look forward to working with my colleagues to bring this proposal to life.”