Hearing on refundable tax credit for childcare workers draws support and concern

Senate Bill 467, which would create a refundable income tax credit for qualifying childcare facility operators and employees, was the subject of a Feb. 19 public hearing before the Senate Committee on Finance and Revenue.

The bill would allow a refundable credit equal to the lesser of $2,000 or 5% of the taxpayer’s income earned as a qualifying operator or employee at a registered childcare facility. The bill as presented would allow taxpayers to direct all or part of the refund attributable to the credit into the Oregon Retirement Savings Plan (OregonSaves). The bill would apply to tax years beginning in 2026 and run through Feb. 19, 2031, as drafted.

Supporters told the committee the proposal targets low wages and high turnover among childcare workers. Courtney Bangs described her 30 years in childcare and said the credit could help equalize retirement access and improve retention among providers often paid near minimum wage. “It’s one step towards making being a childcare provider an actual living wage,” Bangs said during remote testimony.

Senator Suzanne Weber, sponsor of SB 467, framed the credit as a modest, targeted tool to raise income and build retirement saving among employees and operators in private childcare settings that do not receive major government subsidies. “This simple bill accomplishes two important things,” Senator Weber said: it can increase worker income and it can professionalize the workforce by facilitating retirement savings.

Opposition testimony came from the Oregon Education Association and Tax Fairness Oregon. Louis DeSitter of the Oregon Education Association said OEA opposes tax carve‑outs that reduce general‑fund revenue because many childcare programs receive general‑fund support; he cautioned that reducing revenues could, over time, undercut services the credit intends to support. John Kelleher of Tax Fairness Oregon said the concept recognizes underpayment of childcare workers but warned that adding credits amid a budget shortfall risks long‑term pressure to continue or expand the credit. Kelleher cited a 2022 Employment Department figure of roughly 12,000 workers in the sector as a reference point and produced a rough cost estimate of about $8.19 million annually under a broad reading of the bill; he noted the number could be smaller if the sponsor narrows eligibility.

Senator Patterson asked whether a Legislative Fiscal Office analysis existed on likely eligibility and fiscal impact; the sponsor and several witnesses said that LFO/LRO analysis was not yet available and that a work session would likely be scheduled so analysts could provide revenue estimates. Senator Weber said she intends to work with the Department of Early Learning and industry partners to draft clarifying eligibility language and amendments if needed.

Committee members exchanged questions with witnesses about scope and targeting. Louis DeSitter said he feared the credit would effectively subsidize low private‑sector wages rather than raising pay directly; Senator Weber said the bill targets small private operators and employees in direct contact with children rather than managers of large organizations.

No formal action was taken during the Feb. 19 hearing. The committee closed public testimony and signaled intent to schedule follow-up work to obtain fiscal estimates and refine eligibility definitions before any potential vote.