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Meeting Five (of six)September 25, 2020
Meeting Five AgendaWelcome, Introductions, Opening Comments 11:30
Deliverable: Overview of Emerging Recommendations 11:35
Financing and Policy Levers: Tax Credits, Leave Strategies 11:45
Perspectives: Roles and Responsibilities for Communities 12:15
Resolution and Adjourn 12:45-1
Speaker: Glazer Duration: 2 minutes 2
Chair Welcome and Restatement of Charge
• Impact and implications of child care for Virginia’s workforce and economic productivity and quality of life
• Government• Business/Employers and Economic Developers• Philanthropy• Communities
• Three Horizons• Pre-pandemic (original, insufficient system)• Pandemic era (disrupted system)• Future state (re-imagined system)
Speaker: Dyke Duration: 3 minutes 3
Deliverable: Overview of Emerging RecommendationsProfound Paradigm Shifts
1. Re-frame the value proposition2. Re-engineer policy and governance3. Re-negotiate financing strategies4. Re-determine shared responsibility/accountability
Speaker: Glazer Duration: 10 minutes 4
Deliverable: Overview of Emerging RecommendationsProfound Paradigm Shifts
1. Re-frame the value proposition
Embrace and socialize the concept of child care as primary priority/foundational start of a continuum of human capital development “Promise” by 2030Vision Keepers
Speaker: Glazer Duration: 10 minutes 5
Deliverable: Overview of Emerging RecommendationsProfound Paradigm Shifts
2. Re-engineer Policy and Governance
Set a bold goalArticulate priorityOpportunity of governance shift
Speaker: Glazer Duration: 10 minutes 6
Deliverable: Overview of Emerging RecommendationsProfound Paradigm Shifts
3. Re-negotiate Financing Strategies
Identify cost over10 year span, with phases for incremental scalingMethodology for mandating the study
Speaker: Glazer Duration: 10 minutes 7
Deliverable: Overview of Emerging RecommendationsProfound Paradigm Shifts
4. Re-determine shared responsibility/accountability
• Government• Business/Employers and Economic Developers• Philanthropy• Communities
Speaker: Glazer Duration: 10 minutes 8
Financing and Policy Levers: Tax Credits, Leave StrategiesTax Credit Strategies:
Michael Cassidy, President and CEOChris Wodicka, Tax Policy AnalystThe Commonwealth Institute
Speakers: Cassidy, Wodicka, Healy Duration for Comments and Discussion: 30 minutes 9
September 25, 2020Michael Cassidy and Chris Wodicka
The Commonwealth Institute for Fiscal Analysis
Helping Families in Virginia with Refundable Tax Credits
A Need for Child Care Solutions
The pandemic and recession have exacerbated existing challenges around child care and child care affordability
Estimates from 2019 (Economic Policy Institute)
Federal EITC and CTC
Federal credits for working families EITC amount varies by income, filing status, family size CTC is up to $2,000 per child, but not fully refundable and includes income
requirements
Proven policies to support families, particularly for lifting families out of poverty In 2019 (pre-COVID), the EITC and CTC lifted 7.5 million people out of
poverty nationally (most besides Social Security)
Federal EITC and CTC in Va.
As of most recent IRS data (2018) EITC was received by 597,000 families in Virginia Refundable portion of the CTC was received by 453,000 families in Virginia
Virginia’s EITC
Virginia is one of 29 states + DC + Guam + Puerto Rico with its own version of the EITC Equal to 20% of a filer’s federal EITC E.g., a filer with a $5,000 federal EITC would get up to a $1,000 state EITC
Virginia’s EITC Could be Improved
Racial Equity Implications
Payment frequency
Concern 1: EITC is a lump sum credit, generally received during tax season Potential workaround: implement a “periodic” payment option that would
provide advance payment of some portion of the expected credit E.g., 80% of expected credit divided quarterly
Pilot program was conducted in Chicago Could draw upon lessons from ACA’s premium tax credits
Weak job market
Concern 2: EITC is tied to employment Families without employment would be excluded Federal Reserve projects U.S. unemployment rate to remain above pre-
pandemic level through 2023 Potential workaround: implement a similar state tax credit that has broader
eligibility rules E.g., all families below certain income level or under x% of federal poverty
guidelines
Other considerations
Existing state tax provisions Deduction for “household and dependent care services”(subdivision 3 of §
58.1-322.03. ) Deduction likely does not provide much help Equals about $345 max. tax benefit for 2 or more children Small or no benefit for families with lower incomes, like many EITC recipients
Recent proposals to temporarily suspend the deduction and establish a refundable credit Still would have issue of payment infrequency
Questions?
www.thecommonwealthinstitute.org
804-396-2051
Michael Cassidy, President & CEOThe Commonwealth Institute for Fiscal Analysis
Perspectives: Roles and Responsibilities for Communities
Mildred Warner, Professor of City and Regional PlanningCornell University
21Speakers: Warner, Lynch, Bennett, Regimbal Duration for Comments and Discussion: 30 minutes
A Holistic Approach to Thinking about ECE
Mildred E. WarnerCornell University
Virginia Early Childhood FoundationSept 25, 2020
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Child Care is Foundational to the Economy and Society
• Children –• Human development
• Parents –• Labor mobilization, • career ladders and • support as caregivers
• Regional Economy –• Businesses and employment, • social infrastructure
• A nested view is ecological and sustainable.
Warner, Mildred E. 2006. “Putting Child Care in the Regional Economy: Empirical and Conceptual Challenges and Economic Development Prospects,” Community Development, 37 (2): 7-22.
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Need a Comprehensive View
Quality child care is provided in the home, in the market and in public preschool. We need a comprehensive system that supports all three.
Regional Economy, PolicyECE system – quality, supply
Parent Support Workplace policy
Child Development child care
Morrissey, Taryn and M.E. Warner 2007. “Why Early Care and Education Deserves as Much Attention, or More, than Prekindergarten Alone” Applied Developmental Science, 11(2): 57-70.
What Can We Do?
• Local – Planning (siting child care, multi-use zoning, building codes)
• Planners – Child care in Transportation Plans, in Economic Development Plans
• Economic Developers – support the child care sector, require businesses receiving econ dev subsidies support child care
• Schools• Serve as hubs for child care classrooms – Shared
Services
• http://www.mildredwarner.org/econdev/child-care
Need a Multi-level Governance Approach• State
• Include child care in age friendly initiatives – all ages
• Increase public funding• Child care tax credits (refundable)• Child care subsidies
• Extend public school to age three• Expanded Medicaid access for child
care providers
• Federal• Increase public funding• Increase tax credits and make
refundable• Require paid leave by all employers• Expand health insurance access
There is a Private Role
• Private Real Estate• Real Estate Developers – build for child care• Multi-family Building Owners – leases allow
for child care• Private Employers
• Paid Leave • Child care subsidies • Support work-life balance for families
• Families• Support informal family, friend and
neighbor networks
http://www.mildredwarner.org/econdev/work-life
Be wary of marketization – Social Impact Bonds
Tse, Allison; Warner, Mildred: The razor’s edge: Social impact bonds and the financialization of early childhood services. https://juablog.com/2020/08/21/socialimpactbonds/
Tse, A. & Warner, M. A Policy Outcomes Comparison: Does SIB Market Discipline Narrow Social Rights? https://www.tandfonline.com/toc/fcpa20/22/2?nav=tocList
RESOURCESAvailable at www.mildredwarner.org
• Contact: • Mildred Warner [email protected]
• Funding provided by the USDA National Institute for • Food and Agriculture
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Resolution and Recommendations
• Recommendations for a child care renaissance for Virginia’s workforce and economic productivity and quality of life
• Government• Business/Employers and Economic Developers• Philanthropy• Communities
Speaker: Dyke, Glazer, Members Duration: 10 minutes 30
Adjourn
• Executive Briefing, October 13, 2020
• Next BTW Meeting: October 23, 2020
Speaker: Dyke Duration: 2 minutes 31
