VTDigger: Legislative Wrap-up: Child care

From Vermont Digger
by Alicia Freese | May 16, 2013

Nothing fell flatter this session than Gov. Peter Shumlin’s proposal to decrease the state’s Earned Income Tax Credit (EITC) to fund an expansion in the state’s child care program.

Shumlin asked the Legislature to support his plan to divert $16.7 million from the EITC to do three things:

• Update the federal poverty level (FPL) from 2010 to the 2013 level, which would make more families eligible to receive a child-care subsidy;

• Reconstruct the subsidy “cliff,” to give a larger subsidy to families at the higher end of the eligible income bracket;

• Increase the market rate by 40 percent for child-care providers.

The Legislature chose not to touch the state portion of the Earned Income Tax Credit, which supplements the federal credit and is considered a highly effective anti-poverty mechanism for working Vermonters.

Having eliminated the funding source, the Legislature left almost all of Shumlin’s child-care expansion plans on the table.

The 2014 budget allocates just $1.6 million to fund the governor’s initiative. That money will be used to update eligibility guidelines to the 2013 FPL and to increase provider rates by 3 percent, starting in November 2013.

Lawmakers say the 3 percent raise is consistent with what’s been allocated for other providers in the Agency of Human Services portion of the budget.