Wisconsin Democratic Gov. Tony Evers signed a Republican measure Monday that greatly boosts the state child care tax credit, days after vetoing three GOP initiatives that would have reduced taxes by $800 million.
The governor shared on X, the social media platform previously known as Twitter, that he approved the child care measure due to the high cost of child care, as per Fox News.
Gov. Evers Expands Child Care Tax Credit
Wisconsin Governor Tony Evers has signed a significant bill aimed at providing relief to families grappling with the soaring costs of child care. The move comes as a response to the escalating financial burden on families and the urgent need for early support and care for children.
Governor Evers highlighted the beneficial effects of the measure, which addresses the urgent problem of child care costs, on family finances. Last year, the median child care cost in Milwaukee County, the state's most populous county, was $19,096, which made up around 26% of the median family income. Similarly, in Dane County, the second-most populous county, child care costs were $19,586, equivalent to about 17.6% of the median family income of $94,813.
The newly signed bill expands the state child care tax credit to 100% of the claimants' federal child care tax credit, a substantial increase from the previous 50% limit on state taxes. This expansion is expected to ease the financial burden on families, allowing them to claim higher amounts for eligible expenses, reaching up to $10,000 for one qualifying dependent and $20,000 for two or more dependents.
Although the state is expected to lose around $73 million in annual revenue due to this decision, it is one of several tax cuts proposed by Republicans. The extensive bill incorporates provisions like broadening the second income tax bracket, boosting the marriage tax credit, and elevating income exemptions for retirees. These bills are expected to decrease state tax revenue by $2 billion in 2024-25 and around $1.4 billion each year after that, according to AP News.
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Child Care Funding Challenges Despite Advocacy
Governor Evers, however, vetoed all the bills except the child care tax credit expansion, citing concerns about the potential depletion of the state's reserves. In his statement, Evers highlighted the importance of this specific provision, emphasizing its role in addressing the financial challenges faced by families in Wisconsin.
The bill signing follows Governor Evers' ongoing efforts to secure additional funding for child care. The governor previously proposed a similar provision in the 2023-25 budget, but it was removed by Republicans in the Legislature's budget committee. Acknowledging the need for sustained public funding for child care, Evers has advocated for ongoing support, pointing to federally funded programs like Child Care Counts.
This program, which initially granted $20 million a month to the state's child care providers, faced reductions to $10 million a month starting in June. Despite attempts to restore the funding through state and federal channels, challenges persist.
Child care advocates, including the Evers administration, Democratic lawmakers, and providers, stress the importance of addressing the financial strain on child care teachers. While the newly expanded tax credit offers some relief, critics argue that it falls short of meeting the immediate needs of families, as the benefits will not be realized until the following spring when income taxes are filed, Wisconsin Examiner reported.
