Bipartisan bill seeks to tackle S.C. child-care challenges
COLUMBIA, S.C. (WCSC) - In recent years, leaders at the South Carolina State House have put a concerted effort toward economic growth, including workforce development.
But more and more businesses say they are having trouble finding and keeping those workers, in large part because of childcare challenges.
A new, bipartisan bill filed in the state Senate aims to both incentivize South Carolina employers to help their workers out with childcare availability and costs and to encourage more people to open childcare centers and work in them.
“Childcare is the backbone of the business community, and we believe this legislation is a necessary step to address one of the primary barriers to workforce participation in South Carolina,” Bailey Vincett with the Charleston Metro Chamber of Commerce said during a hearing on the bill, S.47, Tuesday in Columbia.
The legislation has from of South Carolina’s business and childcare communities, with several representatives from both groups encouraging senators to advance it during Tuesday’s hearing, during which testimony was taken without a vote afterward.
Ultimately, the bill’s lead sponsor said it aims to help more working families do just that: work.
“Recognizing we can’t just focus on the business climate in of infrastructure and things of that nature. It’s workforce,” Sen. Tom Davis, R – Beaufort, said. “And so this childcare tax credit legislation will mobilize our workforce and open doors for a lot of young parents.”
There are already tax credits available to incentivize South Carolina employers that create a childcare program for their employees, operate an employee childcare center, or cover their employees’ childcare costs at an outside center.
According to the state’s Department of Revenue, those tax credits aren’t very widely used right now.
But lawmakers believe more employers would take advantage of them if the credits were increased, which is what this bill would do, significantly.
For employers that operate a childcare center or cover their employees’ childcare costs at outside centers, the current credit is for 50% of the payments made, with up to $3,000 per employee, regardless of how many children of that employee are enrolled in childcare.
This bill would expand that from $3,000 per employee to $12,000 per child.
Meanwhile, employers that establish a childcare program for their employees can currently claim a tax credit for 50% of program startup expenses, limited to $100,000.
Davis’ bill would increase that to $1 million.
“By expanding the credit to $1 million, it becomes something that’s economically viable for the business, and second of all, it’s also awareness and making sure that businesses are aware of this particular credit,” Davis said.
The bill would also create a new refundable income tax credit for South Carolinians who work full-time as a childcare center director or employee.
It would range from $1,500 to $3,000, based on the person’s experience and level of education.
“Part of the reason why childcare costs are so high is because there’s a limited number of facilities out there,” Sen. Ed Sutton, D – Charleston and a cosponsor of the bill, said. “So we’re also attacking this problem from the capacity side. The hope is to create more facilities and also incentivize the workers that are in those facilities, give them tax credits as well to enter this career field.”
If this bill becomes law this year, these credits would apply to tax years after 2024, with the employee income credit sunsetting after 2030 if the General Assembly does not reauthorize it.
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