By Catie George, Manager, Communications & Storytelling
Access to quality child care is a critical component of our regional infrastructure, much like access to broadband and water. However, a survey from the Texas Association for the Education of Young Children suggests that more than 40% of Texas’s child care providers are at least somewhat likely to close within the next year, due in part to the expiration of federal relief funding that sustained child care providers throughout the pandemic.
To alleviate the challenges facing child care providers, the DRC supported the passage of Senate Bill 1145 (West, 89R) during the 88th Texas Legislative Session to create a constitutional amendment to provide property tax exemptions for qualified child care providers across the state.
Ahead of the November 2023 constitutional amendment election, the Dallas Regional Chamber launched the Good for Texans campaign to support the passage of Proposition 2—the ballot item created by SB 1145—to allow jurisdictions to provide property tax exemptions for local qualified care centers. Proposition 2 was widely supported throughout the state, passing with 65% of the vote, but especially so in Dallas County, where the measure was approved by 72% of voters.
Now, it’s time for local jurisdictions to adopt the optional exemption.
What it means to adopt Proposition 2
Child care facilities across the state are facing challenges due to an unstable and often insufficient financial model, driven by high occupancy costs. Providing child care providers property tax relief will offer vital relief to providers in North Texas and help ensure access to affordable and quality child care for our communities.
To be eligible for the exemption, a provider must participate in Texas Rising Star (TRS), the state’s child care quality rating system, and maintain at least 20% of their enrollment for children receiving assistance through the state’s child care subsidy program. The tax exemption will reduce local property tax levies on child care providers by at least 50% where it is adopted, with the potential for local jurisdictions to exempt up to 100%.
As a result, high-quality child care facilities serving families most in need will see a reduction in their operating expenses, and child care operators not currently participating in the TRS or state subsidy system will be incentivized to opt into both, further increasing the overall quality and accessibility of child care.
The business case for adopting Proposition 2
Lack of child care is a major barrier to workforce participation for parents. A 2021 report from the U.S. Chamber of Commerce found that 35% of workers in Texas who quit or planned to quit their jobs did so because of challenges accessing child care.
For working parents, the affordability of quality child care, in addition to availability, can prevent access to child care services. In Texas, the average annual cost for infant care is nearly $11,000, but providers still struggle to make ends meet.
What the business community can do to support adoption
The Dallas Regional Chamber applauds the regional jurisdictions that have recently adopted the exemption, setting a strong example for other cities and counties in North Texas.
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- City of Denton – 100% exemption adopted Tuesday, Feb. 6
- City of Dallas – 100% exemption adopted Wednesday, Feb. 14
- Dallas County – 100% exemption adopted Tuesday, March 5
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To take effect for the current tax year, remaining municipalities likely need to adopt the exemption by the end of April. It is critical for families, community leaders, and employers to advocate to their local city councils and county commissioner’s courts to ensure the timely adoption of this important exemption.
To help aid this measure’s adoption, contact your municipal officials and express your support.
If you are interested in learning more about how you can support the adoption of child care tax relief in North Texas, visit the Child Care Tax Relief website. If you have any questions, email Michael Wood at mwood@dallaschamber.org.