Baltimore City Council approves increased property tax credit for childcare facilities

On March 5, 2025, Maryland lawmakers introduced House Bill 389, a legislative proposal aimed at enhancing support for child care facilities across the state. The bill seeks to provide a significant property tax credit for various licensed child care providers, including family child care homes, large family child care homes, and child care centers for both children and adults.

The primary provision of House Bill 389 proposes increasing the annual property tax credit from $3,000 to $10,000, or the amount of property tax attributable to the portion of the property used for child care, whichever is less. This adjustment is intended to alleviate financial burdens on child care providers, thereby encouraging the establishment and maintenance of these essential services.

Key discussions surrounding the bill have highlighted its potential impact on the child care sector, which has faced significant challenges in recent years, particularly in the wake of the COVID-19 pandemic. Proponents argue that the increased tax credit will incentivize more individuals and businesses to invest in child care facilities, ultimately improving access to quality care for families across Maryland.

However, the bill has not been without opposition. Critics express concerns regarding the fiscal implications of the increased tax credit, questioning whether it could lead to reduced funding for other essential services. Additionally, there are discussions about the potential for inequities in how the credits are distributed among different regions and types of child care providers.

The implications of House Bill 389 extend beyond immediate financial relief. Experts suggest that by bolstering child care infrastructure, the bill could have positive ripple effects on the economy, enabling more parents to enter or remain in the workforce. This could be particularly beneficial in areas with high demand for child care services, where providers are often stretched thin.

As the legislative process unfolds, stakeholders will be closely monitoring amendments and debates surrounding House Bill 389. The outcome of this bill could significantly shape the landscape of child care in Maryland, influencing both the availability of services and the economic viability of child care providers in the state.