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How smart tax reform can boost early education for our children

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By listening to the current tax reform debate, one might think only corporations and adults stand to benefit. But if done tactfully, a critical yet overlooked group can also reap the rewards: America’s kids. The current state of early care and education in this country falls short of where it should be. Congress should incorporate a workforce investment credit model as part of tax reform to help ensure healthy childhood development and a strong talent pipeline in the future, as was done in Louisiana.

Research demonstrates that high-quality early care and education requires an environment that stimulates brain development through the knowledge and competencies of the early care and education workforce and their interactions with children. This is not babysitting. Studies show that the quality of early learning settings can largely impact the healthy development of children. In America, the median wage for child care workers is $10.18 per hour, or about $21,170 per year. According to the National Survey of Early Care and Education, more than one million paid staff work in about 130,000 child care centers throughout the United States. Another one million caregivers are paid home-based providers caring for children in their residence.

{mosads}Most of these workers do not have college degrees, and many of them only have high school degrees. With parent fees as the only source of revenue for most programs, early learning providers are under incredible pressure to keep costs down, particularly labor costs, which are the largest component of an early care and education program budget. Low wages are problematic for hiring and retaining a more educated workforce.

Such low compensation makes it difficult for child care workers to pursue training and certifications or higher education coursework. School readiness hinges on high-quality early learning settings, which are impossible without a high-quality workforce. That is why it is important to improve education and professional training for early childhood educators and link those professional achievements to wage increases.

Fortunately, one state’s lead paves the way for a path forward. In 2007, Louisiana launched the School Readiness Tax Credit, which include a refundable workforce investment credit that provides an incentive for early care and education workers to increase their knowledge base and skills while acquiring a modest increase in their take-home pay. The Louisiana approach uses the state’s existing early childhood career development registry to verify the educational attainment of employees. Early care and education directors and staff then receive a refundable tax credit that grows as they increase their education, training and work experience.

Louisiana’s model demonstrates that a refundable workforce investment credit is a solution that works. Between 2008 and 2015, the number of staff achieving a teacher level one credential, or a child development associate credential, grew from 963 to 3,598, an increase of 374 percent, and the number of staff that attained higher-level credentials increased almost eightfold, from 284 to 2,156. Early educator professional development results in higher-quality programs that support early learning and school readiness for children. The program is also voluntary, meaning only those who choose to use the program and attain higher credentials or levels of education will benefit.

The framework for this kind of approach already exists across most of the country. Quality rating systems are currently operating in 42 states and the District of Columbia, and seven states are in the planning process. Plus, voluntary state early care and education workforce registries are operating in 44 states. The federal tax code presents an opportunity to shape workforce incentives throughout the country. There is a federal credit for families to assist with child care costs that was last updated in 2001. However, that credit has no relationship to the quality of care. An early educator workforce investment credit would ensure that parents have choices among quality programs.

The research on brain development is clear. The foundation for all future social, emotional, physical and cognitive development — in essence, school readiness — is formed during a child’s earliest years. Children who start school ready to learn are less likely to be retained a grade, referred to special education, or go to jail. They are more likely to graduate high school and attend college, leading to greater economic opportunity and higher earnings throughout their lifetime. This is why a high-quality workforce and access to early child care are critical.

A quality early care and education workforce tax credit allows parents to work, supports children’s healthy development, and promotes a skilled workforce pathway and more sustainable regional economies across the country, both now and in the long-term. As the administration and Congress consider tax reform, they should consider an early care and education workforce investment credit for our collective individual and national economic success.

Cindy Cisneros is vice president of education programs at the Committee for Economic Development. Her organization’s new brief on child care can be read here.

Tags children Congress economy Education taxes

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