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Governor’s Budget Proposes Significant Investments in Child Care
The Senate Finance Committee reviewed the Governor’s tax proposals, including three significant efforts to support working families with child care costs, and child care centers with staffing retention. These include:
- An expansion of the Earned Income Tax Credit for low- and moderate-income workers.
- An increase to the Vermont Child Care and Dependent Tax Credit to 65% of the federal tax credit and a change to make it fully refundable.
- $1,000 fully refundable tax credit for Vermonters working in child care. It is expected that on average this will wipe out any tax liability for child care workers.
The House also discussed a proposal for a Child Tax Credit, similar to the credit that expired from the Federal government in 2021. Data from the US Census Bureau shows that 1 in 4 families nationally with young children used the advanced child Tax Credit to cover child care costs. On the State level, with the price tag of $50 million per year, questions remain about a long-term funding source for this program which would be in addition to significant investments promised last year in a system-wide overhaul set as a goal in statute.
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