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Senate committee advances three-part childcare tax credit after fiscal debate
Summary
The Senate Finance and Claims Committee voted 12–10 to advance SB 3 21, a three-part childcare tax credit bill that reduces a per-child credit to $600, creates a childcare-worker credit and offers employer credits; Department of Revenue testimony clarified fiscal components and uncertainties.
Senate Finance and Claims on Wednesday advanced SB 3 21, a three-part childcare tax credit package that backers say will ease costs for families, support childcare workers and incentivize employers to help pay for childcare. The committee voted 12–10 to send the bill to the next stage.
Senator Josh Kaczmeier (sponsor, Senate District 13) described the bill as targeting childcare access and affordability through three credits: a per-child credit (amended from $1,200 to $600), a $1,600 credit for childcare workers, and a $5,000 employer credit for businesses that pay for childcare. "This bill was trying to target 3 problems," Kaczmeier said during his opening remarks, and he invited amendments and further fiscal review.
Alex DuBois, policy and engagement director with 0 to 5 Montana, testified in support, saying the package was bipartisan and would help families, stabilize the childcare workforce and incentivize employer participation. "SB 3 21 offers a well rounded practical solution to the child care crisis in our state that will benefit families, workers, and employers alike," DuBois said.
Department of Revenue fiscal staff provided a line-item breakdown that shaped committee discussion. Aaron McNay told senators the original fiscal note — which assumed the $1,200 per-child credit — estimated roughly $42 million for the child credit, about $6 million for the childcare-worker credit and about $16 million for the employer-dependent-care credit (about $64 million total). McNay said the $1,200-to-$600 reduction for the per-child credit would likely reduce the child-credit component by roughly half, from about $42 million to about $21 million, although other changes (definitions and phase-out fixes) also affect the estimate.
Members pressed about distributional effects and household impact. Using a two-teacher household example, committee discussion focused on how much a $600-per-child refundable credit would reduce tax liability for typical middle-income families. McNay provided back-of-envelope examples showing noticeable, but not full, reductions in tax liability for the hypothetical families.
Senator McGilvery suggested shifting more of the benefit back to families by increasing the per-child credit and reducing the worker credit; Senator Kaczmeier said he was open to reconsidering those adjustments based on updated fiscal numbers.
The committee took executive action later and, on a roll-call vote, approved SB 3 21 by a 12–10 margin. The bill will move forward with an expectation of further amendment and fiscal refinement in the House.
Next steps: SB 3 21 was passed out of Senate Finance and Claims and will proceed toward further consideration where sponsors and staff expect additional amendments and a revised fiscal estimate.
