Subject: Analysis of Proposed Child Care Cred Program in Ohio Senate Bill 32
Source: Ohio Senate Bill No. 32, 136th General Assembly (As Introduced)
Executive Summary:
Ohio Senate Bill 32 proposes the creation of the “Child Care Cred Program” under the Ohio Department of Children and Youth. This voluntary program aims to share the costs of child care equally among eligible employees, participating employers, and the state (subject to available funds). The stated goals of the program are to help employers attract and retain talent, assist eligible employees with child care expenses, and support the sustainability of child care providers. The bill outlines eligibility requirements for employees, employers, and child care providers, establishes an application process, and allocates an initial appropriation of $10,000,000 for fiscal year 2026.
Main Themes and Important Ideas/Facts:
1. Establishment of the Child Care Cred Program:
- The bill formally proposes to enact Section 5180.41 of the Revised Code to establish the “Child Care Cred Program” within the Department of Children and Youth.
- The program is designed as a cost-sharing initiative for child care expenses.
- Definitions of “child care” and “publicly funded child care” are aligned with those in existing section 5104.01 of the Revised Code.
2. Program Goals:
- The legislation explicitly outlines three primary goals for the Child Care Cred Program:
- “enabling employers to attract and retain talent”
- “assisting eligible employees with child care costs”
- “sustaining the businesses of child care providers”
3. Cost Sharing Mechanism:
- The core of the program involves an equal three-way cost share for employee child care costs:
- “an employee’s child care costs shall be shared equally by the employee, the employee’s employer, and the department, with each contributing a one-third share”
- An important provision allows employers to further support their employees: “except that the employer may agree to also contribute some or all of the employee’s share.”
4. Voluntary Participation:
- Participation in the program is explicitly stated as voluntary for both employees and employers: “Participation in the program is voluntary. Neither an employee nor the employee’s employer shall be required to participate.”
- The decision of which employees will receive the employer’s contribution (at least one-third) rests with the employer: “Each employer seeking to participate in the program shall be responsible for selecting which of its employees the employer agrees to contribute at least one-third of the employee’s child care costs.”
5. Eligibility Requirements:
- Employee Eligibility:Must reside in Ohio.
- Must be “ineligible to participate in publicly funded child care.” This suggests the program targets individuals who may not qualify for existing state or federal child care assistance programs.
- Must be selected for participation by their employer.
- Employer Eligibility:Must employ individuals working in Ohio.
- Must have selected one or more of those employees to participate in the program.
- Child Care Provider Eligibility:Must hold a license issued under Chapter 5104. of the Revised Code or be certified by a county department of job and family services under section 5104.12 of the Revised Code. This ensures that participating providers meet state standards.
6. Application and Enrollment Process:
- Employees and their employers must jointly submit an application to the Department in a manner prescribed by the Department.
- The Department will review applications and determine eligibility.
- Once deemed eligible, the employee, with the assistance of the Department, will select a licensed or certified child care provider. Existing providers can be selected if they meet the criteria: “An employee may opt to select the employee’s existing child care provider so long as that provider is licensed or certified as described in this section.”
- The Department may require all participating parties (employee, employer, and provider) to sign a memorandum of understanding.
7. Program Administration:
- The Department of Children and Youth is responsible for the administrative aspects of the program, including coordinating cost sharing and making payments to child care providers.
- The Department has the authority to delegate some or all administrative tasks to third-party entities, provided they meet specified conditions.
8. Continued Eligibility and Fraud Prevention:
- Eligibility remains valid as long as all parties continue to meet the initial conditions.
- The bill includes provisions to prevent fraud and misrepresentation, stating that any employee or employer found to have engaged in such activities will be “permanently ineligible to participate, or to continue to participate, in the program.”
9. Rulemaking Authority:
- The Department is granted the authority to adopt rules necessary for the implementation of the program, following the procedures outlined in Chapter 119. of the Revised Code.
- Interestingly, the bill specifies that regulatory restrictions in these rules are not subject to certain state oversight related to the impact of regulations on businesses (sections 121.95 to 121.953 of the Revised Code).
10. Appropriation:
- Section 2 of the bill outlines appropriations for fiscal years 2026 and 2027.
- Specifically, appropriation item GRF 830414, “Child Care Cred Program,” is allocated $10,000,000 for fiscal year 2026 and $0 for fiscal year 2027.
- The Director of Children and Youth has the authority to request additional funds for the program in fiscal year 2026 if the initial appropriation is insufficient. This additional amount would be appropriated to the same fund.
Key Takeaways:
- Senate Bill 32 proposes a novel approach to addressing child care affordability by creating a cost-sharing partnership between employees, employers, and the state.
- The voluntary nature of employer participation suggests that the program’s reach will depend on employer interest and capacity.
- The eligibility restriction for employees (“ineligible to participate in publicly funded child care”) indicates a focus on a segment of the workforce that may currently face significant child care cost burdens without direct public assistance.
- The initial appropriation of $10 million for FY26, with no designated funding for FY27, raises questions about the long-term sustainability and potential scale of the program as currently proposed.
- The emphasis on using licensed or certified child care providers aims to ensure quality and safety standards are maintained.
This briefing document provides a summary of the key aspects of Ohio Senate Bill 32 as introduced. Further analysis would be needed to assess the potential impact, feasibility, and long-term funding implications of this proposed Child Care Cred Program.