MONTGOMERY, Ala. — Alabama lawmakers on Tuesday gave final approval to legislation to provide state tax breaks to businesses that help their employees afford childcare.
The Alabama Senate voted 31-0 for the bill that now goes to Gov. Kay Ivey for her signature. Supporters said that childcare costs are a barrier for many parents considering returning to the workforce. House Minority Leader Anthony Daniels said the goal is to help families afford childcare and to help businesses that are struggling to find workers.
“It gets workers back into the workforce,” said Republican Sen. Garlan Gudger of Cullman during the Senate debate.
The bill would set aside $15 million in tax credits that could be claimed by companies that provide childcare stipends, on-site day care or reserved spots at licensed facilities. The tax credit program would begin in 2025 and end on Dec. 31, 2027. After evaluating the cost and effectiveness of the program, lawmakers could choose to extend the tax credit.
The proposal also would provide tax credits and grants to providers, with incentives aimed at expanding the availability of care and improving quality.
The legislation would provide up to $25,000 in yearly tax credits to childcare providers who participate in the Department of Human Resources’ Quality Rating Improvement System, which provides ratings to programs that meet defined program standards. That part of the program would cost up to $5 million per year.
It would also provide $5 million in grants that nonprofit providers, including church facilities, could seek to help improve quality or expand capacity.
The Senate also gave final approval for a tax credit program for developers that build affordable housing in high-demand areas. A lack of affordable housing for low- and mid-income earners, especially in rapidly growing areas of the state, is another workforce issue, advocates said.
The bill, sponsored by Rep. Cynthia Almond, R-Tuscaloosa, and Sen. Chris Elliott, R-Josephine, caps the program initially at $5 million per year.
Both tax credit bills will reduce revenues into the state’s Education Trust Fund.
“Every time we take money away from the education budget, there is a loser and that loser is the children of this state,” Sen. Arthur Orr, R-Decatur, said on the Senate floor Tuesday.
Elliott countered that the education revenues grow when more people are working.
“We make the pie bigger,” he said.
Alabama Daily News’ Mary Sell contributed to this report.