DFL lawmakers to introduce cap on families’ child care costs

A contingent of DFL lawmakers plan to introduce legislation next year capping child care costs at 7% of household income for all families making less than 150% of the state median income. 

For example, a family of four making less than $176,000 per year would spend no more than $12,320 on child care in a year. 

Minnesota has some of the highest child care costs in the country — families currently spend around 20% of their income on child care. The average cost of infant child care in Minnesota is more than $16,000 per year.

The program would build on existing child care subsidies, including the Child Care Assistance Program and Early Learning Scholarships, according to the lawmakers who plan on introducing the bill, state Rep. Carlie Kotyza-Witthuhn (DFL-49B, Eden Prairie) and state Sen. Grant Hauschild (DFL-3, Hermantown).

The general idea is that families would pay a portion of their child care bill, and the state would reimburse child care providers for the rest, Kotyza-Witthuhn said.

A draft of the legislation is not finished, but will be ready by the start of the 2024 session, the lawmakers said at a press conference Thursday. 

The legislators did not have a complete cost estimate for the program, nor did they say where exactly the funding would come from, but mentioned the state’s revenue surplus as a possibility.

ThinkSmall, a Minnesota-based early education advocacy nonprofit advocating for the child care spending cap, published an online tool that allows parents to see how much money they would save with the proposed cap on child care costs.

The bill is based on recommendations from the Great Start for All Minnesota Children Task Force, a mostly governor-appointed panel created by the Legislature in 2021.

The task force took the 7% cap from federal benchmarks included in the 2014 reauthorization of the Child Care and Development Block Grant program; Congress landed on that number after reviewing data that show families consistently spent about 7% of their household income on child care from 1997 to 2011, according to the task force’s final report.

Despite the high costs for child care in Minnesota, workers and teachers earn very little and child care centers are short-staffed. Currently, the average salaries are below the cost of living in both the Twin Cities and Greater Minnesota. 

The child care staffing shortage contributes to the broader labor shortage, as women opt to stay home with their children when child care is unavailable or too expensive.

Kotyza-Witthuhn pointed to legislation passed last session that continued a federal pandemic-era program boosting wages for early childhood educators as an important component in raising pay and combatting staffing shortages. 

In some areas of the state, there are no child care providers; with no open child care slots, families can’t take advantage of the state’s existing affordability programs. 

Kotyza-Witthuhn said the proposed program could incentivize child care providers to open and expand by stabilizing revenue streams.

“It is expensive to provide high-quality child care for all the reasons that it is expensive to provide high-quality public education for K through 12,” said Debra Messenger, director of All Ages & Faces Academy in St. Paul, at Thursday’s press conference. “We charge our families the lowest amount we possibly can to pay our bills.”

Those charges are about $572 for infants, $462 for toddlers and $390 for preschool — per week.

Editor’s note: The Minnesota Reformer is an independent, nonprofit news organization dedicated to keeping Minnesotans informed and unearthing stories other outlets can’t or won’t tell. 

Madison McVan wrote this story. McVan is a Report for America corps member who covers economic mobility for Minnesota Reformer. It originally appeared in the Minnesota Reformer on Nov. 30.