Potential tax relief for child care centers could impact 13,300 Tarrant County children

Texas voters next month will decide whether certain child care centers could receive a property tax exemption, giving some financial relief to a sector that struggles to provide competitive wages and affordable tuition rates for parents.

Proposition 2 is one of 14 constitutional amendments that will be on the Nov. 7 ballot. If approved, local governments will have the option to implement a tax exemption of at least 50%. Experts say it’s the first time voters have an opportunity to weigh in on tax relief for child care providers.

About 2,700 child care providers could be impacted across the state, according to Kim Kofron, senior director of education for advocacy group Children at Risk. The Texans for Prop 2 political action committee estimates that would account for about 20% of all child care providers statewide.

In Tarrant County, it’s estimated that 145 providers serving 13,300 children would benefit from the tax exemption, said Catherine Davis, director of policy for Child Care Associates, one of the largest child development programs in North Texas.

“It’ll be up to the discretion of how child care providers wish to utilize that cost savings, but ultimately they should be able to invest back into their programs without having to pass that financial burden back onto parents,” Davis said. “We anticipate things that come out in the form of increased educator wages, potentially reducing costs for parents or investing in the general quality improvement of their programs.”

Eligible child care centers must be part of Texas Rising Star, the state’s quality rating and improvement system for early childhood programs. Centers also must have at least 20% of their enrolled children receiving subsidized services through the Texas Workforce Commission. Both property owners and renters would receive financial relief.

Like My Own Childcare, a center located in the Morningside neighborhood on Mississippi Avenue, is one of the Fort Worth facilities that would qualify. Retha Wilson, who’s owned and directed the center for 30 years, said she would use that money to give raises or bonuses to staff.

“That’s been a tight situation with enrollment being low. That would allow me to give them a raise increase or a bonus or something to show I appreciate them for hanging in here,” she said. “That will be a big help.”

Kofron, of Children at Risk, said the amendment could be a positive, initial step forward during a time when child care providers are running out of federal pandemic relief money that kept them afloat amid the COVID-19 pandemic. Texas providers received $2.7 billion in American Rescue Plan stabilization funds; child care centers and homes received an average of $303,500 and $24,900, respectively.

“We have the child care cliff that we’re all experiencing with the money that ran out at the end of September. Prop 2 is not going to replace all those funds, and it’s not going to solve child care, but it’s a good start and way for providers to really feel some relief,” Kofron said.

Since the COVID-19 pandemic, it’s been a struggle to retain early educators, Wilson said, but the public relief funds helped keep her business open and pay for costs such as utilities.

“In child care, you don’t make a whole lot of money. To be in child care, you have to love what you do,” she said.

Sen. Royce West (D-Dallas), who sponsored the amendment, did not respond to requests for comment.

It remains to be seen if the Fort Worth City Council or Tarrant County Commissioners Court would implement a local tax exemption if the amendment passes, but city and county officials have shown support for the sector in recent years. The Blue Ribbon Action Committee on Child Care was formed in November 2021 as a Fort Worth, Tarrant County and Arlington partnership with Child Care Associates with the goal of utilizing American Recovery Plan Act funds to address gaps in early education exacerbated by the pandemic. The local leaders also announced a $2 million investment in early educator wages at that time, funded by the federal relief dollars.

“During my time as mayor, I have been proud to champion several efforts to advance affordable child care in Fort Worth and will continue to do so. Texas Election Code prohibits me from using my office to advocate on behalf of any ballot propositions, but I encourage all Fort Worth voters to get out and vote in November,” Fort Worth Mayor Mattie Parker said in a statement.

In September, Tarrant County commissioners reallocated ARPA money and pulled $9.84 million from the county’s partnership with Child Care Associates, but also put $15.5 million toward four child care centers in Arlington, Fort Worth and Tarrant County.

Tarrant County Judge Tim O’Hare did not respond to requests for comment.