Lawmakers requesting $500m for child care subsidy proposal

The Democratic-Farmer-Labor (DFL) lawmakers proposing a child care subsidy program are requesting $500 million to lower child care costs for Minnesota parents with young children. 

Rep. Carlie Kotyza-Witthuhn (DFL-49B, Eden Prairie) said Friday that she and other authors are seeking a one-time $500 million allocation this session to fund one year of the proposed Great Start Affordability Scholarship program.

If passed by the Legislature, the program would assist families making up to 150% of the state median household income — around $174,000 for a family of four — on a sliding scale. 

Of the $500 million, around 7% would go towards administration of the program — which largely builds on existing state child care support programs — and the rest would help families pay child care bills, with payments ranging from $100 per month for the highest-earning qualifying families to $750 per month for the lowest-income recipients, Kotyza-Witthuhn said.

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The state would pay a family’s subsidy directly to the child care provider, and that discount would be reflected on the family’s bill.

ThinkSmall, a child care advocacy group, estimates the program would reduce child care costs for 86% of Minnesotans with children under the age of 5.

Minnesota parents currently endure some of the most expensive child care in the country — when they can find it. 

The legislation (SF3790/HF3681) passed the Senate Education Policy committee Monday with a unanimous voice vote, before lawmakers had a price tag. It will go to the Senate Education Finance Committee next. In the House, the bill is in the Children and Families Finance and Policy committee.*

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Kotyza-Witthuhn and Sen. Grant Hauschild (DFL-3, Hermantown), the bill’s other lead author, have said the program can be scaled up or down depending on available state funding,

Kotyza-Witthuhn said Friday a $500 million allocation would fully fund the program for a year. The ongoing funding level would be worked out in next year’s legislative session, when lawmakers will put together the next biennial budget. The bill does not yet have a fiscal note, which is the financial analysis that comes from state budget agency Minnesota Management and Budget. 

Some DFL leaders are warning they will be cautious with any new spending requests outside of the planned infrastructure package usually passed in even-numbered years. 

The budget forecast released Thursday contained good news for proponents of the child care subsidy program, showing the state’s fiscal outlook has improved since November. Lawmakers are working with a $3.7 billion budget surplus, giving legislators more leeway to spend this session than expected based on earlier forecasts. In future years, however, the state will confront a “structural imbalance,” meaning it is spending more money than it brings in.

“We have our eyes on that structural imbalance,” House Speaker Melissa Hortman, DFL-Brooklyn Park, said Thursday. “I do not foresee making any commitments to spending that we can’t afford.”

Both Hortman and Senate Majority Leader Erin Murphy (DFL-64, St. Paul) said cutting the cost of child care is a priority, however.

* This story has been updated to reflect the accurate status of the bill in the House.

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 March 1.