Iowa's Business Leaders are Now Pushing for More Child Care Subsidies

December 11, 2019

Tyler Jett

Some of Iowa's top corporate executives want the state to expand child care to more low-income families. The Iowa Business Council, which describes itself as a board of the "chief decision-makers" at 23 of the state's biggest companies, asked lawmakers Wednesday to loosen restrictions on who can qualify for a benefit from the state. Executive Director Joe Murphy said some workers can't take or keep jobs because child care is too expensive.

"This has been an issue that has been percolating for a long time," Murphy said. "But I think, from a business perspective, businesses over the last 24 months, 18 months, have really collectively said, 'You know what? There is something to this. We need to engage in a holistic manner.’... This is not just isolated in one specific part of the state. This is going on in all four corners of the state."

Specifically, the council asked lawmakers to ease the "cliff effect," the concept that low-income families suffer when they make slightly more money because they lose access to state benefits.

To qualify for Iowa's Child Care Assistance program, which pays at least part of a day care bill, families must make less than 145% of the federal poverty line. For a family of four, the limit is $37,300 this year.

Beginning last year, the Greater Des Moines Partnership has included affordable and accessible child care among its legislative priorities. And the Iowa Association of Business and Industry, which represents 1,500 companies, added child care among its workforce needs this year. (The legislative session starts Jan. 13.)

While costs have increased, the total number of child care programs in the state has dropped dramatically, from about 9,400 in 2013 to about 5,400 last year. The result? The Center for American Progress said 715,000 Iowans (about 24% of the state) live in child care deserts. The problem is especially pronounced in rural areas, where 35% of residents don't have access.

After the federal government doubled its funding for child care block grants, state lawmakers agreed to increase reimbursement rates for providers at the beginning of this year. The $3 million annual increase is for providers who work with families under the Child Care Assistance program. (The funding formula is complicated, but a center caring for an infant for half of a day could see an increase to $22 per child from $17, according to DHS.)

Leaders on the issue have not indicated what they're going to do. In August, Republican state Reps. Jacob Bossman, Holly Brink and Ann Meyer created an informal task force. Brink, of Oskaloosa, has met with business owners in her district but isn't sure what policies she will propose.

Meyer, of Fort Dodge, said the group is considering three main solutions: increasing tax credits, increasing state funding for providers and allocating more public money to Child Care WAGE$, a public-private partnership that gives child care workers a bonus if they achieve educational goals.

Murphy said he also has heard from lawmakers who are interested in other incentives, like state money for construction of child care centers or tax credits for companies that provide care for their employees. Several Iowa companies, from Casey's to Collins Aerospace, already host child care in their corporate offices.

"I'm hearing a lot of good things," Stone said. "But we've really got to see what goes live. I want to see where it's at when it's real."

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