Iowans paid to work in registered child care centers would not have to pay state taxes on that income if a bill introduced in the Iowa House becomes law.

“We certainly don’t think there’s a silver bullet out there to address child care, but we think this could make a difference,” Brad Hartkopf of the Iowa Association of Business and Industry said early this morning during a House subcommittee hearing on the bill.

Dave Stone of United Way of Central Iowa said it could help retain child care workers. “There’s a lot of different options for them to go to different industries that are more lucrative considering this is very challenging, difficult work taking care of kiddies eight hours a day, five days a week,” Stone said, “so this is great that we’re moving the needle for them to make sure that they can have a little bit more money in their pockets to be rewarded for the hard work that they’re doing.”

The three-member House subcommittee voted to advance the bill, but members of the panel are considering changes, like exempting the owners of registered child care centers from state income taxes as well. Dustin Miller of the Iowa Chamber Alliance suggested that could spur investment in child care centers.

“It can be pretty common for somebody to own it and work there,” Miller said, “but it’s not uncommon for a group of investors that see a need — there’s one going up in Van Meter right now that they will not be involved in the day-to-day. They’ll just own it, so I think it’s good to think about it from the investment side.”

Legislators working on the bill hope to ensure the additional take home pay for child care workers doesn’t affect their Earned Income Tax Credit. Iowa Womens Foundation president Deann Cook said that’s key.

“Remember that these are very low income individuals, so just whatever implications it might mean to their overall taxes, we would be curious to know that,” she said, “to make sure it didn’t pull them out of any other tax benefits they might be receiving.”

Some bill backers say people who run child care businesses don’t make huge, if any profits, and exempting registered child care centers from property taxes might be another way to boost investment.

Radio Iowa