Senate Committee Advances $190 Million Child Care and Parental Leave Bill

Unceremoniously and minutes early, the Senate Committee on Health and Welfare advanced a child care bill on Friday that would be a historic investment in Vermont’s struggling child care industry and would create a new parental leave allowance.

A deep advocacy push and the impact of the Covid-19 pandemic on an already beleaguered industry have combined to make childcare a top priority for Democrats in Montpelier this year.

Health and Welfare committee members advanced S.56 by a vote of 3-2, with Republicans against, on the last day of the legislature’s mid-session “crossover” week, when all bills they must leave their committee of jurisdiction or die the vine.

A full tax analysis for the bill, which underwent several major revisions this week alone, is not yet available. But Nolan Langweil, an analyst in the lawmaker’s Joint Fiscal Office, told lawmakers on Friday that preliminary estimates peg the combined annual cost of paid leave and childcare benefits at about $190 million in 2025, which it would be the first full year of operation. (About 90% of that price would be attributable to child care.)

The bill has undergone a major rewrite since it was first introduced. Gone, for example, is a core of the original legislation: free all-day pre-K in public schools for all 4-year-olds. The bill now simply calls for a study on the subject.

A last-minute addition, meanwhile, would create 12 weeks paid leave for the parent of a new child. The upper house has long been tepid on paid parental leave, and top Senate Democrats this year argued that child care should be the priority. The leave amendment is generally seen as the Senate rebuttal to H.66, a push for the Vermont House to implement one of the most generous paid family and medical leave programs in the country, amounting to more than $100 million annually .

One parent per two-parent family would be eligible for parental leave outlined in the Senate legislation, and weekly reimbursements would reach a maximum of $600 per week. Families at or below 600 percent of the federal poverty level — $180,000 for a family of four — would be eligible.

The upper house’s leave proposal does not include benefits for other types of leave, such as medical or nursing care leave, although these are included in the House bill.

The childcare economy is broken in two ways: families can afford the costs and workers can’t make ends meet. The median income for early childhood teachers in Vermont is less than $40,000; for assistant teachers, it’s about $22,000, according to a 2021 state report. Child care workers also typically forgo basic benefits like health insurance, paid sick time, or retirement plans. The average cost of care, meanwhile, is more than $26,000 a year.

A report commissioned by lawmakers estimated that Vermont would need to spend between $179 million and $279 million to support salaries and make tuition affordable for most families.

The Senate bill extends aid to more families than contemplated in the report. But it also increases reimbursements at a lower rate than the recommended rate and does not guarantee that all families receiving benefits pay less than 10% of their annual income for child care.

“We don’t want to sacrifice the good to try to achieve perfection,” Senator Ginny Lyons, D-Chittenden Southeast, chair of the panel, told her colleagues Friday. “We’re trying to do some good in terms of moving forward as much as possible.”

Currently, Vermont’s Child Care Benefits program pays the full cost of tuition for families living at 150% or below the federal poverty level. (That’s $45,000 for a family of four.) S.56 would eliminate tickets for those who hit 185% of that threshold ($55,500 for a family of four) and extend partial benefits to families that hit 600%. , mirroring the cut-off for the paid vacation schedule. Under the current system, child care benefits end on families with incomes above 350 percent of the federal poverty level.

In a statement, Aly Richards, CEO of childcare advocacy group Let’s Grow Kids, wrote that the panel “made history” on Friday by pushing the legislation.

“This bill brings Vermont closer to solving the child care crisis by making child care more accessible and affordable for thousands of Vermonters and improving compensation for early childhood educators,” he wrote. “We applaud the committee members for their hard work in strengthening this bill.”

S.56 must then go to the Senate Appropriations and Finance Committees before taking the floor.