An income tax shift proposal released last week proposes to eliminate Georgia’s credit for child and dependent care, the state’s second largest income tax credit. Many low-income parents trying to raise young children in Georgia struggle to afford the high cost of quality child care even under today’s tax rules.
A new Georgia Budget and Policy Institute report details the child care challenge Georgia families must resolve and its effects on the workforce. Parents without quality child care can strain to keep jobs, focus at work and get a job if they do not have one already.
Georgia offers a child care assistance program to help families afford it, but the program helps just 5 percent of low-income children under 13 in the state. This amounted to an average of about 46,000 children in 2012, the latest year all data is available.
To help more of its families afford quality child care, Georgia can:
- Increase the income eligibility thresholds for child care assistance
- Increase the reimbursement rates paid to child care providers
- Decrease child care co-payments for families
- Allow parents pursuing a postsecondary degree to receive child care assistance
Additional investment in child care assistance strengthens today’s workforce in two ways. It helps Georgia’s low-income working parents become better workers and helps unemployed parents join the ranks of the employed.
Nearly four in 10 of Georgia’s working families with children are “low-income” families. A low-income family of three with one child earned less than $36,960 in 2012. A preponderance of research shows child care assistance can help these families contribute more to the workforce and to their own finances by enabling parents to:
- Work with fewer child care-related disruptions, such as missed days, schedule changes and lost overtime hours
- Work more hours and stay employed longer
- Earn more income to support the family
- Stay employed at higher rates
Expanding childcare assistance will also benefit Georgia’s economy by helping some parents to rejoin the workforce. Low-income parents across the country who are not working cite “home and family reasons,” such as taking care of children as their leading reason for not working. Assisting these parents with child care for a limited time period will allow more of them to work. A wealth of research shows that families who receive assistance with child care are more likely to work.
Georgia should take advantage of an opportunity to help individual families and the state’s economy as a whole by strengthening its investment in child care assistance.