Senate subcommittee hears widespread support for Senate Bill 47 to expand child‑care tax credits

Senate Bill 47 would expand several existing child‑care tax credits, add a new refundable credit for child‑care directors and staff, and broaden the types of South Carolina state taxes against which the credits may be applied, a Senate subcommittee heard during a public hearing.

The bill increases a current credit cap from $100,000 to $1,000,000 and would allow that existing credit to be applied against state income tax, bank tax, premium tax, license tax and withholding tax, according to staff briefing materials presented to the panel. The measure would also increase a per‑child credit from $3,000 to $12,000 and create a refundable income tax credit for full‑time child‑care directors and staff ranging from $1,500 to $3,000, depending on position qualifications. One section of the bill would be repealed on 12/31/2030 unless reauthorized; the bill takes effect for tax years beginning after 2024.

The proposal was described to the panel as a step to address workforce and economic development problems. "This is not a silver bullet by any means ... it is a starting point for a conversation," said Senator Larry Davis, the bill's author from Beaufort, urging further work with Representative Erickson and the committee.

Supporters framed the bill as a workforce and family stability measure. Bailey Vinsett, representing the Charleston Metro Chamber and the South Carolina Metro Chamber Coalition, told the committee that staffing shortages keep centers from operating at capacity: "Providers are often unable to operate at full capacity due to the inability to meet the state's ratio requirements. As a result, our centers are first forced to turn away families or add them to waiting lists." Vinsett said the proposed refundable credit for directors and staff could help recruitment and retention.

United Way of Greenville County director of policy Emily O'Brien said the lack of reliable child care imposes a measurable economic cost and cited a report by Council for a Strong America and partners that estimated lost productivity, earnings and revenue at $1,400,000,000 in South Carolina. O'Brien added that child‑care costs can exceed $12,000 per child per year and presented United Way's ALICE (Asset Limited, Income Constrained, Employed) figures showing a household budget benchmark of about $73,000 for a family of four.

Other witnesses — including Trident United Way, the Institute for Child Success, Children's Trust of South Carolina, local First Steps programs and a network that supports child‑care businesses — reinforced themes that low wages (the average child‑care worker wage cited to the committee was $13.34 per hour), high turnover, and affordability barriers push parents out of the workforce and harm child well‑being. "When child‑care centers are able to retain staff, that creates stability for that child‑care center, which is ... a small business," said Deborah DePaoli of the Institute for Child Success.

Local providers and advocates gave detailed, frontline examples of need. Crystal Campbell, executive director of Dorchester County First Steps, described working directly with families who lost housing or jobs when child care became unaffordable; Tammy Compton, who represents 45 child‑care directors, said the credits would help providers raise wages and retain qualified staff. Speakers also pointed to other states' approaches — Kentucky, New Mexico and Louisiana were mentioned as examples of using tax‑based supports and voucher strategies to retain staff or expand access.

Committee staff and members asked clarifying questions about program design, the bill's limits and next steps. Staff noted the bill requires private investment by employers for some credits — for example, a 50% private contribution of start‑up costs for qualified facilities — and emphasized that the refundable staff credit includes qualification tiers. Several senators praised the start of the conversation and requested follow‑up work with committee members and stakeholders; no formal vote on the bill occurred at the hearing.

Why it matters: witnesses said the proposal targets a sector that affects workforce participation, business operations and early‑childhood development. Testimony tied child‑care stability to parents' ability to work, business retention and children's school readiness.

The subcommittee did not take final action; members said they expect additional hearings and stakeholder consultations as the measure is refined and moved through the legislative process.