Del. Bob Fehrenbacher, R-Wood, discusses a bill that would create a Child and Dependent Care Tax credit in West Virginia during a meeting of the House Committee on Finance on Oct. 6, 2024. (Perry Bennett | West Virginia Legislative Photography)
A bill to create a state-level child and dependent care tax credit advanced on Sunday in the House Finance Committee.
The credit is expected to benefit 16,000 West Virginia families who are already paying for child care, according to Gov. Jim Justice, who included the bill in his call for the ongoing special session.
Justice, who is running for the U.S. Senate, pushed the tax credit, saying he wants to help families afford child care and boost the state’s workforce participation rate. Families are paying $600 to $700 dollars a month on the expense, he said.
House Finance Chairman Vernon Criss, R-Wood, said the special session was the right time to vote on the measure after lawmakers were unable to consider it during the regular session due to the threat of a federal clawback tied to schools’ spending of COVID-19 dollars. The issue has been resolved.
“Child care credits are a way to help families that are in West Virginia that make money in the state,” Criss said. “That’s important so that they can use those dollars to help fund their child care.”
While the bill, Senate Bill 2026, sailed through the committee, some lawmakers did raise concerns about potentially increasing the number of families who could use child care without adding day care spots. West Virginia needs more than 20,000 child care spots for working families.
“We have a big demand and not enough spots,” said Del. Amy Summers, R-Taylor.
Child care providers, who have asked lawmakers to address widespread problems forcing day care shut downs, have said that the bill won’t help them.
There is already a federal version of the child and dependent care tax credit. It is worth up to $2,000 per child and reaches only a small percentage of families.
The bill would create a state tax credit equal to 50% of the allowable federal child and dependent care credit and is available to families already using the federal version.
For a family that makes more than $43,000 annually, the state tax credit would likely equal $300 for one child or $600 for two or more children.
“For the child care situation, they have to make that investment up front then they would recoup that when they file their state tax return,” said Del. Bob Fehrenbacher, R-Wood.
The new state-level credit would be nonrefundable. Del. John Williams, D-Monongalia, attempted to amend the legislation to be refundable, raising concerns that it wouldn’t give enough money back to West Virginia families as the tax credit is unavailable to low-income families not already paying for child care.
Without knowledge of how a refundable tax credit would impact the bill’s cost, lawmakers opted to reject Williams’s proposal.
The bill will have to be considered by the Senate and House, where many members have already expressed support for the measure.
Lawmakers haven’t yet taken up Justice’s proposed additional 5% personal income tax cut – one of the governor’s priorities for the special session. The measure has faced scrutiny due to the state’s financial position as Justice nears the end of his term as governor.
Justice amended the special session call over the weekend, adding to it four bills, including one that would allocate $5 million for a child care expansion pilot program.
Child care providers have asked lawmakers to help stabilize their industry by funding the state’s child care subsidy program for low-income families and helping day care workers afford child care themselves. The state has lost hundreds of child care spots this year, and on Oct. 4, Bible Center Preschool in Charleston announced it would be closing its birth-to-two classrooms due to financial instability.
While lawmakers said addressing the complex problem was a key issue, multiple child care focused-bills never went up for a vote in the House or Senate during the regular session.
House members unsuccessfully pushed for several of those bills to be included in Justice’s special session call.
The amended special session calls also includes bills that would allocate $1 million for schools safety initiatives and $10 million for drought relief programs.
Another measure would create a specific appropriation line for charter school construction grants. Separately, the House Education Committee approved a bill on Sept. 30 that would allow charter schools to apply for School Building Authority funds to use for start-up costs and more.
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