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Legislature expands employer‑oriented childcare tax credit and places $5 million cap
Summary
Senate Bill 233, renamed and expanded in committee, would reshape the School Readiness Tax Credit to increase the employer share of qualifying childcare investments, introduce a $5,000,000 cap and adjust credit percentages based on a facility’s quality rating. The committee reported the bill favorably May 19.
Senate Bill 233, presented by Senator Edmonds, was reported favorably by the House Committee on Ways and Means on May 19. The bill renames and expands the existing School Readiness Tax Credit (SRTC) to increase incentives for employers to invest in child care for employees and to add a $5,000,000 cap on the credit.
Senator Edmonds summarized the proposal as a targeted expansion of a current refundable credit that allows businesses to claim tax credits for qualifying childcare expenses. “The percentage of the business expenses that are eligible for the refundable credit is based on the quality rating of the childcare facility,” Edmonds said, noting the program uses an established five‑star rating system. Witnesses told the committee that current utilization is low and the fiscal note showed about $500,000 in annual claims under the present program.
Testimony from business and economic development groups emphasized child care’s connection to workforce retention. Barry Irwin of Leaders for a Better Louisiana told the committee the expanded credit would “encourage businesses to a greater degree to put money on the table for their employees’ child care.” Anna Johnson of the West Baton Rouge Chamber of Commerce and Trey Godfrey of the Baton Rouge Area Chamber spoke in favor, highlighting employer recruitment and retention benefits.
Senator Edmonds said the cap was chosen to create a predictable fiscal limit; witnesses and members discussed utilization history and the goal of increasing employer participation to address childcare shortages. Representative Echols moved the favorable report; the bill was reported favorably and will move forward for further legislative consideration.
