Republican and Democratic Lawmakers Debate Childcare Subsidies, Tax Credits, Sustainability


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Lawmakers on Tuesday debated a bill that would subsidize childcare providers with funds appropriated from the state’s cap on revenues. Although members of both parties expressed support for added funding, Republicans questioned the use of funds set aside as part of a bipartisan budget deal crafted in 2017, while Democrats questioned how else to fund the measure.

State Rep. Sean Scanlon, D-Guilford, emphasized that the proposal would not require a tax increase or additional spending, but would use funds that already exist. 

“Person after person in this meeting has said they want to solve this problem. If not now, when, and if not this, how else?” Scanlon asked.

State Rep. Holly Cheeseman, R-East Lyme, said that she appreciated the need to find a way to fund childcare. But she questioned whether the state would be able to collect enough money to support the program. 

“We know too often we create programs that are unsustainable, and end up going back on our word to our residents,” said Cheeseman. 

As written, the bill allows the Office of Early Childhood to provide grants to childcare providers and family child care networks that would subsidize infant and toddler spaces to at least 75 percent of the market rate. The bill prioritizes centers located in low-income areas, ones that create new spaces for infants and toddlers, and ones that are accredited. It would also provide help to centers that wish to become accredited and access to family support services.   

The proposal was authored by State Sen. John Fonfara, D-Hartford, co-chair of the committee. 

On Tuesday, Fonfara said in a meeting of the state’s Finance, Revenue and Bonding Committee, that he saw the development of this program as an investment in the future of the state. 

“I believe firmly that this bill here, in investing in children who, often, too many, start off two or three years behind before they walk into kindergarten …that is what pays dividends in reducing the spending side of our obligations. That invests in the quality of the people we represent,” he said. 

Fonfara also said that the state’s Office of Financial Analysis said that another budget safeguard, the volatility cap, would allow the budget to withstand recessions even with the repurposing of the revenue cap funds. 

According to current revenue cap rules, the legislature must set aside 1 percent of its tax revenue in case of an emergency situation. That figure will increase to 2 percent of the state’s revenue by 2026. Scanlon said that funding from the revenue cap is projected at $321 million in 2024 and $452 million in 2026. 

Republican and Democratic legislators in the meeting agreed that they wanted to find a way to support the childcare industry. But Republicans and some Democrats expressed reluctance to remove one of the caps that had supported fiscal prudence and questioned whether the funding stream would be sustainable. 

Scanlon characterized these funds as sitting in a “never-never land” where they are neither spent nor used to pay down pension debt. 

But State Sen. Henri Martin, R-Bristol, said that at the end of the fiscal year, if that revenue has not been spent, it goes into the state’s rainy day fund. He said that a larger rainy day fund meant that the state would be able to take out more money to pay down the state’s unfunded pension liabilities. 

State Rep. Ryan Fazio, R-Greenwich, said he felt that instead of creating a program that could create more burden on taxpayers, the state should look at changing some of the regulations, such as teacher-to-pupil ratios in daycare centers, that make it more difficult for childcare providers to operate. He also pointed out that the state was projected to see a $1.4 billion deficit in 2024. 

“If families cannot afford to live here, if they cannot get jobs here, if there is not real income growth here because the fiscal burden is so great, then the future for families and children will be bleak as it has been in the past,” said Fazio. 

State Sen. Patricia Billie Miller, D-Stamford, said that it was critical to invest in childcare because children without a strong foundation never catch up to their peers in academic achievement. She said that this can lead to schools becoming “pipelines to prison” and increases in gun violence. 

“There is an achievement gap, but there is a greater preparation gap,” she said.

The committee also voted on a proposed state child tax credit, which Scanlon initially proposed last year. The bill would offer a maximum credit of $600 per child to individuals making less than $100,000 or married couples making less than $200,000 annually. 

Cheeseman said she thought the bill was unrealistic in light of the limitations that the federal government was placing on the state’s ability to cut taxes. 

“We can all sit here and talk about our five children and five grandchildren and the great-grandchildren on the way. But at the end of the day, the only thing that matters to the residents of Connecticut is can we make this happen?” she said. “At the end of the day, I don’t want to tell the residents of Connecticut that we are going to make this happen when our hands are tied by the federal government.” 

Scanlon characterized both bills as a way to address what he referred to as a “crisis” happening with childcare in the state. He said that both would be included in the revenue packet that the committee planned to present on Wednesday. 

“I believe this is an opportunity for us, as policymakers, to do something that will improve a lot of lives, not just of people, but of children. And if we’re here to do anything, hopefully, it’s to help children.”

Emilia Otte

Emilia Otte covers health and education for the Connecticut Examiner. In 2022 Otte was awarded "Rookie of the Year," by the New England Newspaper & Press Association.