Lawmakers’ early childcare plans to cost around a quarter billion, taxes proposed

On Thursday, the state’s senior economist presented a study to the Senate Economic Development Committee showing that early childhood programs under discussion would cost between $179 million and $279 million — and funding could come from either a payroll tax or a sales tax on services.

Joyce Manchester, senior economist for Vermont’s Joint Fiscal Office, spoke to the committee first. She noted that Act 45 passed in 2021 requires the Joint Fiscal Office to hire a consulting firm to study the cost of “high quality, accessible early care and education.”

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A HEFTY PRICE: Lawmakers want to expand early childcare services, but the price tag could be as high as a quarter billion dollars.

The RAND Corporation has finished the study, which was released on Tuesday.

Manchester said the state already “provides quite a lot” in terms of revenue support for early childcare work. She also noted that the state already receives “a good chunk” of federal money as well.

The study was also tasked with finding state revenues to fill in the funding gaps.

Between $179 million and $279 million

She said the current funding needed to achieve the programs lawmakers want is between $179 million and $279 million. She said the range here depends on the extent of the subsidies involved.

“The big ones are a payroll tax or an additional sales tax on services,” she said of the funding proposals from the study.

An important detail she noted is that the study set a limit on what the public can be expected to pay for childcare at 10% of their total income. She also said that the early education workforce should receive “compensation that is equivalent to their peers.”

Hearing from employers

Michele Asch, vice president of leadership and organizational development for Twincraft Skincare, also spoke during the meeting. The company employs about 300 people in three locations in Vermont.

“We lost some key employees because they couldn’t find childcare,” she said.

She learned that her community had received grant money to help with childcare expansions, but no centers would take the money because they couldn’t find new workers to hire. She said this was like a wake-up call for her.

“I’m a business person. Demand is way up here, and why isn’t supply meeting it?” she said. “… We would 100% support a payroll tax, [since] if we were to ever do something on our own it would be far more of an expense.”

Bill Stritzler, the managing director for Smugglers’ Notch Resort, was the next to speak to the committee. He was the former chair of the Business Roundtable in 2009 when he last testified on this subject at the Statehouse. He said that his company now offers “free” childcare.

“I can tell you that was not without some internal angst,” Stritzler said.

He called the results extraordinary: “Within 2-3 weeks we filled up every open job and there were many. … We learned that providing free childcare had more than the kinds of results that we would ordinarily hear about.”

He said he was able to provide these services while only impacting payroll by about 1.5%. When pressed on whether he would support a statewide payroll tax, he said “as of today we’re not ready to say that’s the right answer.”

The committee continues to hear from business owners who are generally supportive of these efforts.

The governor doesn’t support new taxes

Gov. Phil Scott has repeatedly said that he will not support a new childcare bill that involves an increase in the payroll tax.

Regarding the sales tax, the governor hasn’t commented on that specifically. But the RAND study did — however the researchers warn against raising the state’s current 6% mark any higher than an additional 1%, which the study emphasized would make Vermont’s one of the highest in the nation.

The entire committee meeting can be viewed online here.

Michael Bielawski is a reporter for True North. Send him news tips at bielawski82@yahoo.com and follow him on Twitter @TrueNorthMikeB.

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11 thoughts on “Lawmakers’ early childcare plans to cost around a quarter billion, taxes proposed

  1. We find that the usurpation of your parental rights to be fully complete must begin at the preschool level. Thank you for your continuing corporation.

  2. We need state-subsized childcare for tons of reasons;
    – staying home and raising children you had can be exhausting. I just want to see those cute babies of mine when they’re quiet and asleep so I can post their pictures on Instagram
    – people should have kids (trophies) without bearing the cost
    – why should anyone stay home with their kids? Don’t you realize that if a parent stays home they may not have the skills to get a job and then may impact their whim to leave their annoying spouse or children
    – having kids shouldn’t be a financial burden, a lifestyle burden and etc.
    – having kids at home interferes with folks social media influencing time.

  3. Since when did “babysitting” services become a human right?…since the VTNEA figured out that babysitters could be defined as “early childhood educators”…

  4. I want to know why making people without kids, pay for child care is equity in the minds of these communists? And where in the state or US constitutions is it permitted?

  5. maybe the marxist in Montpeculiar should limit their taxing to One per session. Do you want to feel good about the climate hoax that will have a 0.0002% value or do you want to tax for child care that will benefit a lot of Vermonters? Wise up stupid VT voters… your shooting yourself in the foot electing these idiots. All they have for answers is taxing the hell out of you.

  6. Just so I don’t misunderstand here…we’ve secured a vision of “reproductive rights” so we can eliminate unwanted pregnancies produced by our use of that right…and now the state is gearing up to confiscated more of our resources to take over child care? …because we are all on board with such “free” services from the government problem solvers? Ok…I think I’m supposed to feel warm and fuzzy about this…??? so why am I feeling creeped out? Maybe Sturgill Simson can add a verse to “Lookin For The End of That Long White Line” …to escape GOVERNMENT OVERREACH..

  7. Vermont needs money? Need to raise taxes? I have a partial solution for child care funding…a new TAX…. a noble cause. It is time to tax ELECTRIC VEHICLES – annually:

    1. EV Owners abuse & benefit from the massive $7,500 tax CREDIT (not a deductions). VT LOSES income taxes from $7,500 CREDIT!
    2. EV’s consume large amounts of precious electricity, when distribution and production is already tight becauase of “Green Only mandated production . Do ya’ miss VT Yankee yet?
    3. All electric car owners are “free-riding-cheats”…acting “Holier-Than-Thou”. They pay $0 in ROAD TAXES to maintain VT’s already bad (terrible) roads. Gasoline cars pay a large sales tax on every gallon. EV’s do not!.. But they love to use teh roads! Just another in a long line of Democrat Progressive-feel-good-MY-free-stuff & make-others-pay.

    I propose a Bill be put to the Legislature to tax EVERY person that owns an EV….$1.000 a year :)…and proceeds go to funding child care. HOW CAN THEY COMPLAIN ON THAT! It’s emotionally perfect 🙂

    • Yes, it’s high time to turn this issue back on its rightful head. This is a win-win; supporting hard-working mothers, especially single moms AND businesses without government intervention/control. TOUCHE’

    • Jeffrey why not tax solar panels too?
      The list of BAD about them is a mile long- they should be taxed.

      Solar arrays that take up large tracts of land should be taxed as structures.

      Further, the lack of daycare is not the problem- that is the fallout of the bad policy.

      Who wants to live in a time of Lawfare and assume the responsibility of people’s kids?
      They can say you did anything and sue you.. it happens all the time.
      You’re potty training a toddler and next thing you know you are being accused of something.
      So here we are, people don’t want to do this work because the risk is high and the reward is low.

      Is anyone looking at the quality of the youth we have today that were raised in daycare centers?
      Do you want more of this?
      There are a whole lot of problems today that didn’t exist when mothers stayed home and raised their own kids.

  8. Forget subsidized childcare. Where will they get the money to pay the undunded Union $4.5 billion Pension & Health plans? Raising sales taxes is regressive. Raising payroll taxes is also regressive against VT’s small firms. Income taxes are already some of the highest around (progressive) . What’s left? The PERFECT “Socialist” Tax….their wet dream….a WEALTH TAX that would be on about 15% of Vermonters and no one else. Watch for it to be bandied about. They have before. A Wealth Tax would be something like taxing (stealing) 0.50% annually of the value of your house, bank account and any investments (stocks, bonds)….0.5% sounds tiny to a Socialist Progressive…but when they ever do something like that, it is confiscation…and VT will be full blown communist…not that in many ways it already isn’t.

    • Jeffery, Vermont is the Northeast version of the ” DC Swamp”, fools in charge !!
      Vermonter’s better wake up ……………………….

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