Screenshot: Committee on Economic Development website

Pay attention to Louisiana. It has a tax credit program that policymakers should know about.

“Louisiana pioneered its School Readiness Tax Credits in 2007,” according to “Pathways to High-Quality Child Care: The Workforce Investment Credit,” a policy brief published by the Committee for Economic Development, part of The Conference Board, a nonprofit, business-led policy organization.

In part, Louisiana’s tax credit “provides ECE directors and staff with a refundable credit linked to their educational attainment at four levels and work experience in a quality program. The credit amount increases as the credentials rise,” the brief explains.

The tax credit is “not an entitlement.” The only individuals who qualify are those who “voluntarily join the registry, achieve professional development, and have been working for at least six months in a licensed program that participates in the state quality rating system qualify for the credit.”

“The credit is adjusted for inflation annually,” and in 2014, “the value of the credit by qualification level ranged from $1,630 to $3,260 and a total of 3,770 individuals claimed it. The average credit was $2,150…”

Louisiana is, essentially, aligning its tax policy with current science. As Georgetown University Psychology Professor Deborah Phillips says in the brief:

“New evidence at the intersection of neurobiology, developmental science, and economics carries vast implications for how we think about the responsibilities, skills, and qualities of children’s early childhood teachers…”

There’s a lot at stake, Phillips says. Early childhood caregivers and teachers are responsible for promoting children’s brain and behavioral development as well as their learning and social skills.

“A high-quality ECE workforce is necessary for high-quality child care and early learning. The right scaffolding can support the capacity of the ECE workforce to help children build strong brains in the earliest years of life.”

But too many members of the early childhood workforce grapple with “economic hardship, diminished social status, and other chronic stressors that all-too-often accompany early childhood employment.”

“The workforce is underdeveloped as a result of the dominant business model in the child care industry. Parent fees are the only source of revenue to cover operating expenses for most programs (such as rent, utilities, materials, insurance, and wages for staff). Parents struggle with the high cost of care, which often leads to decisions to hire staff at the lowest wages possible so that programs can keep parent fees as low as possible.”

The result: “the median hourly wage for an individual working in child care is $10.18 per hour (about $21,170 per year).” And 46 percent of child care workers “reside in families enrolled in one or more public support programs annually, compared to 25 percent of the U.S. workforce as a whole.^”

An early childhood workforce tax credit could help by providing “an incentive for professional development, and rewards educational attainment with a refundable wage credit to increase pay.”

The brief says that the “keys to designing a workforce investment credit are:”

• making the credit refundable so the lowest paid providers can benefit from a wage increase

• indexing the credit to inflation

• making the credit large enough to matter – at least a 10 percent increase, and

• linking the credit to qualifications. 

Workforce tax credits are not a new idea. Here in Massachusetts, one proposed bill called for “a 15% refundable tax credit for early educators modeled on the existing Earned Income Tax Credit.”

Another Massachusetts bill proposed an early educator tax credit for “eligible early childhood educators who have demonstrated degree attainment. The credit shall equal $200 for a taxpayer with an Associate’s Degree and $600 for a taxpayer with a Bachelor’s Degree.”

“The bottom line,” the brief concludes, “investing in a quality ECE workforce allows parents to work, supports children’s healthy development, promotes a skilled workforce pathway and more sustainable regional economies in communities across the country—now and in the long-term.”

To share this information, use the brief’s social media toolkit. It’s a list of tweets that can be posted on Twitter as well as short posts that can go on Facebook or LinkedIn. There’s also an infographic posted here.