A new task force and a budget proposal with tax credits for families

Early Bird readers, hello again. Newcomers, welcome! If you were forwarded this email, you can sign up here to receive it every two weeks, and join our conversation on issues facing North Carolina’s young children and those who support them. If you’re already a subscriber, please help us reach more people by sharing this with your friends and co-workers interested in early childhood education. 

Since last time, Katie and I have been on the road, in Asheville, Durham, and Elizabeth City, as cross-sector local leaders discuss child care needs and opportunities. Business leaders have released employer-focused policies the state could adopt to partner on solutions through the NC Chamber Foundation. State policymakers have filed bills to make regulatory reforms and back local workforce pilots. Gov. Josh Stein has announced a bipartisan task force to surface strategies that could expand and bolster child care (find the full list of members here).

The lingering question in all of these rooms and conversations is just how much state legislators will invest in child care as they create a new two-year budget. Last week Stein, a Democrat, released the first budget proposal of his administration. Next, we’ll hear from the House and Senate, both of which have Republican majorities, as each releases its own proposal. Then they’ll start negotiating a final budget.

The main early childhood advocacy groups are asking for $220 million each year in subsidy funding. This would go toward increasing the rates that participating programs receive, and decreasing geographic disparities in those rates. They’re also asking for a one-time $60 million allocation for a statewide pilot that lowers the cost of child care for child care teachers themselves.

Stein’s budget proposes nearly $88 million each year to increase subsidy rates, but it does not mention lowering disparities in how that funding is distributed. It also spends about $530 million for three new refundable tax credits for families: The Working Families Tax Credit (average of $419 per eligible family), the Child and Dependent Tax Credit (average of $303 per family), and the Child Tax Credit (anywhere from $150 to $25 per child depending on income).

These are based on similar federal credits. They would come once a year, and would be refundable, meaning families who do not owe anything in taxes could still receive the benefits. Here’s an overview of the federal Child and Dependent Tax Credit and the Child Tax Credit, from nonprofit First Five Years Fund. And here’s more information on state tax credits like the Working Families Tax Credit in Stein’s proposal, from research organization Prenatal-to-Three Policy Impact Center.

Stein’s proposal would also give an additional $26.8 million in the first year of the biennium and $53.5 million in the second year to strengthen and expand NC Pre-K, the state’s preschool program for eligible 4-year-olds.

Look out for our coverage of early childhood bills as they are heard in legislative committees in the coming weeks. We’ll also be profiling caregivers, organizations, and communities as they care for and work on behalf of young children. Don’t miss Katie’s look inside Clara Hearne Pre-K Center in Roanoke Rapids, an example of the kind of stories we’re hoping to tell more of. We thank you for sharing your stories with us.

Until next time,

Liz Bell

Email Liz Bell

Liz Bell is the early childhood reporter for EducationNC.