Amendment 1 seeks to aid child care centers

Kara Corches: Amendment 1 is another tool to address state child care hurdles.

Christina Ford: Ballot issue's passage could spur the launch of more child care facilities.

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Missouri voters will head to the polls next month to determine if child care centers should receive property tax exemptions.

Amendment 1 is part of the Aug. 6 primary election ballot and proposes to amend the state constitution to allow child care facilities to be exempted from paying taxes on property. The exemption is for places where individuals, corporations, organizations and associations provide child care outside of the child’s home, according to the ballot language.

“This is intended to make child care more available, which would support the well-being of children, families, the workforce, and society as a whole,” the ballot language reads.

The amendment was passed last year by the Missouri General Assembly, followed by approval in May by Gov. Mike Parson to add the issue to the Aug. 6 ballot.

Financial data is limited on how much the tax exemptions would cost cities, counties, schools and other parts of local government that receive property taxes. According to the ballot language, the state’s Blind Pension Fund, which assists blind persons who don’t qualify under the Supplemental Aid to the Blind law and are ineligible for Supplemental Security Income benefits, could lose up to an estimated $400,000 annually. It’s a program of the Missouri Department of Social Services.

Addressing challenges
The amendment was endorsed during the 2023 legislative session by Sen. Travis Fitzwater, R-Holts Summit, and is among several attempts by lawmakers in the last few years to address child care challenges.

For the second time in as many years, a tax credit package intended to improve access and affordability of child care that had bipartisan support in Jefferson City failed to cross the finish line. The legislation stalled in the Senate due to ultra-conservative opposition, according to state officials.

Kara Corches, who was named interim president and CEO of the Missouri Chamber of Commerce and Industry on July 15 after the retirement of Dan Mehan, said the organization testified last year in support of the legislation that became Amendment 1. Corches, who also remains the chamber’s vice president of governmental affairs, said the organization doesn’t have an official position on Amendment 1 due to uncertainty of its full fiscal impact.

“But broadly, we are very involved and supportive of addressing our child care crisis,” she said. “We see this as another tool in the toolbox for addressing the child care shortage.”

A 2023 investigation by The Missouri Independent and MuckRock found almost half of all children in Missouri ages 5 and under, or roughly 202,000 kids, now live in child care deserts. A child care desert is defined as an area where there are more than three children under the age of 6 for every licensed child care slot, or in some cases, no slot at all.

Corches said the child care challenges the state is facing have a significant economic impact. She cited a 2021 report from the U.S. Chamber of Commerce, which estimated Missouri loses $1.35 billion annually through accessibility, quality and cost-related hurdles connected to child care. She said $280 million of the losses is from tax revenue when a parent’s child care facility is closed permanently or temporarily.

“At some level, we can’t afford not to do something about this,” she said. “We don’t want our state to continue to lose over $1 billion a year because of inadequate availability of child care statewide.”

The Show-Me Institute, a St. Louis-based think tank, opposes Amendment 1.

David Stokes, director of municipal policy, said in a letter to the editor that appeared in Springfield Business Journal’s July 22 issue that the proposal is “a terrible idea.” He said any reductions to the property tax base will result in higher property taxes on other entities that don’t have an exemption, such as a person’s home, farm or other businesses.

“The overall effect may be small, but it will be real,” he said.

Investing in care
Christina Ford, owner of Kids Inn Child Care Center LLC in Springfield, said she is appreciative of the efforts Gov. Parson and other state legislators are making to help the child care industry. She said child care “impacts everything.”

“That impacts the workforce and the communities,” she said, adding as a small-business owner that Amendment 1 could help a child care provider keep their doors open or motivate someone else to get into the industry.

“It will definitely help and because I have seen lots of child cares over the years either struggle to stay open or fail to stay open,” she said, noting her 1511 E. Lark St. business opened in 2022. “If someone is considering opening a child care center in Missouri – especially in desert areas, as there are areas in Missouri that are struggling to keep child care centers open – maybe that will encourage them to open one.”

The 15-employee Kids Inn serves ages six weeks to 12 years old and is licensed for 40 children, which includes eight infants and toddlers. The center accepts children on a drop-in basis Monday through Saturday, from 8 a.m. to 8 p.m. weeknights or until 10 p.m. Friday and Saturday. Its extended hours have resulted in registration numbers which Ford said are close to 1,000 children since opening.

“Depending on the time of day or week, we can see a multitude of children,” she said, noting over the summer Kids Inn regularly nears capacity. “It flows throughout the day. Anytime we have a break in the school year, such as spring break or winter break, then we do kind of see those numbers go up.”

Ford said she hasn’t calculated what Amendment 1’s passage might save her business in annual property taxes. Kids Inn occupies a portion of a 7,500-square-foot building constructed in 2022 that also houses another child care facility, Kids First Early Learning Academy LLC. The building is owned by 1500 Lark LLC, according to past SBJ reporting.

Ford said she doesn’t own the building but declined to identify the owner. Jason Smith, Spencer Fane LLP’s managing partner in Springfield, is listed as the LLC’s organizer on the secretary of state’s website. He also declined to name the owner and had not received permission to disclose their name by press time.

According to the Greene County collector’s office, 1500 Lark LLC last year paid $44,236.54 in property taxes on the Lark Street property.

With Amendment 1, Missouri is taking an approach similar to Texas, which in 2023 and this year has passed tax exemptions for child care centers in various counties and cities of its state. Florida lawmakers also brought back a statute this year for child care tax credits that had previously existed for over 20 years, according to media reports. 

According to a 2021 report by Child Care Aware of America, the average annual cost of center-based infant care in Missouri is $9,516, which is above the national average of $9,095.

“We know the child care crisis is an economic issue,” Corches said. “It hurts working families, it hurts businesses, and it hurts our overall tax base because when people can’t go to work because there’s not enough child care, they don’t earn income. That’s lost tax revenue.”