By PAULA TRACY, InDepthNH.org

CONCORD – Speeding faster than a child to an empty swing set is a bill that would give businesses a tax credit to co-locate or expand child care.

The Senate Ways and Means Committee voted unanimously to recommend passage immediately after a hearing with no opposition and ordered it to the consent calendar.

This issue is an increasing challenge for workers and their employers in the Granite State with not enough capacity, Senators were told Wednesday.

To incentivize companies to create their own centers or add to them, House Bill 1433-FN passed on a voice vote in the House March 5.

The childcare tax credit is a priority of the governor who mentioned it in her state of the state address in February.

On March 9, Republican Gov. Kelly Ayotte issued a statement that, “We need to address the rising cost of childcare to help families thrive and keep our economy growing, and I’m glad to see the House pass a tax credit to encourage businesses to help meet this need for their workforce.”

“I look forward to working with the Senate to get this important program to my desk so we can partner with our business community to expand access to affordable childcare.”

The prime sponsor of the bill is state Rep. Katelyn Kuttab, R-Windham.

She told the Senate Committee there is a one-year wait list for childcare statewide.

Some need to sign up for child care when or even before they become pregnant, those who testified said.

The tax break for businesses would be equal to 50 percent of its total claimed expenditures. The details are at the end of the story. It would not impact this budget cycle but the next, she said.
Construction could likely take several years.

She said it is important for the state to do this to foster economic growth and maintain the workforce.

Sen. Cindy Rosenwald, D-Nashua, thanked her for the bill.

“I am sure you know we are missing 9,000 licensed child care spots,” Rosenwald said. “Will this bill help improve the compensation of child care workers?”

Kuttab said it does not directly address compensation but could free up a few more dollars to pay them better.

Those who testified said they liked the flexibility for the employer and that it is forward thinking. This issue has been stressful for young families, those contemplating a move to the Granite State and important to businesses as well, they were told.

Trina Ingelfinger, policy director at New Futures spoke in support of the bill saying the number of child care providers has declined since COVID-19 and it is seen both rurally and in larger areas and costing the state up to $250 million a year as well as negatively impacting in-migration.

She said child care availability is worse here than in other states.

“New Hampshire needs some solutions to this problem. HB 1433 directly addresses that,” she said.
Corinne Benfield, executive director of Stay Work Play NH, which is focused on attracting those aged 18-40, said this is a top issue for that group and encouraged passage.

She said it does send a broader signal to young people that New Hampshire does see this as tied to its quality of life.

Natch Greyes, vice president of public policy at the Business and Industry Association, said the bill may free up as much as 10 percent of the potential workforce who cannot now find childcare. That is between 5,000 to 10,000 who are out.

The bill is an incentive to increase supply, while it might not have a direct impact on childcare wages.
“We would expect to see center-based programs in two to three years after permitting and construction,” he said, meaning the state would not see the effect immediately but like two years out from passage.

State Sen. Victoria Sullivan, R-Manchester, said while a co-sponsor of the bill she would like to see more kids spend more time with their parents, not less.

“We don’t want to force all kids into childcare,” she said.

Greyes said he agreed but noted there are plenty of parents who want to stay home but can’t for financial reasons.

LANGUAGE OF THE BILL

The bill reads that the general court finds the “availability of reliable child care is critical for parents to remain in the workforce, and that there is a shortage of child care available to working parents in New Hampshire…It is in the interest of this state to stimulate the creation and expansion of child care programs by providing an incentive to businesses in the form of a tax credit.”

It directs the state Department of Revenue Administration to administer a new tax credit if the business provides additional child care opportunities.

It would impact the business either directly or through a third-party, “where such a child care program was not available prior to January 1, 2027.”

According to the methodology of the bill, “This bill establishes the Child Day Care Creation tax credit applicable to the Business Enterprise Tax (BET) and the Business Profits Tax (BPT).  To be eligible for the credit, a business must be a licensed program, expand or create seats that were not available prior to January 1, 2027, and successfully apply for and be approved for the credit by the Department of Revenue Administration.  Any unused portions of the credit may be carried forward for 4 successive years.”