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Gov. Reynolds and Lt. Gov. Gregg standing with a group in front of Curious Kids child care.

Too many working parents struggle to find safe, nurturing and affordable care for their children while they work. The state has more households with all parents working than any other state in the country, but too few options for child care – a problem that intensified during the pandemic. Over the past five years, Iowa has lost 33 percent of its child care businesses and the state is short 350,000 child care slots for children younger than 12 years old. Twenty-three percent of Iowans live in child care deserts, areas with shortages of licensed providers. 

This child care crisis hurts more than Iowa families. It also costs Iowa close to a billion dollars each year in lost tax revenue and employee absences. The Governor proposes the following to create more opportunities for Iowa families:

Child Care Challenge Fund

Many Iowa communities and businesses are working together to make child care more available and affordable for families. Last year, Governor Reynolds launched the Child Care Challenge Fund, an innovative program that encourages employers, community leaders and other stakeholders to work together on solutions. Specifically, this matching grant program helps with the construction, renovation and remodeling of child care facilities.

  • $3 million appropriation this year will be used to jump-start this program

Child Care and Development Block Grants

Iowa receives federal funding through Child Care and Development Block Grants to subsidize child care for low income families. These funds can be paired with state money to improve the overall quality of state and local child care programs. 

  • $25 million for start-up grants to address child care deserts. Similar to the Child Care Challenge Fund, but can be used to on-board child care staff hired and to purchase furnishings and other needed equipment
  • $7 million for WAGE$ to offer salary stipends to early child care and education workforce based on staff level of education and commitment to their program
  • $38 million for monthly stipends to facilities offering care to Child Care Assistance families and co-pay reimbursements to these same lower income families

Increase Eligibility for Child Care Tax Credits

Iowa must increase the number of families who qualify for tax relief through the Early Childhood Development (ECD) and Child and Dependent Care (CDC) tax credits. Governor Reynolds proposes doubling the maximum net income amount for eligibility from $45,000 to $90,000.

Comprehensive Child Care Strategy

Iowa’s child care crisis calls for a long-term strategy rather than a quick fix. Governor Reynolds will convene a group of Iowans to develop a strategic plan under the leadership of the Iowa Business and Child Care Coalition, Iowa Workforce Development, and the Iowa Department of Human Services.