ST. PAUL, Minn. — In his upcoming budget proposal, Gov. Mark Dayton plans to earmark as much as one-fifth of Minnesota's projected $1 billion surplus for an expanded child-care tax credit.
Dayton has said little about the two-year budget he'll deliver to the Legislature in a few weeks, but revealed Friday that it will include up to a $180 million tax break in the form of the care credit. It's his second attempt to substantially expand eligibility for a credit that would save households hundreds or thousands of dollars, depending on the number of children a family has in day care.
Currently, about 38,000 families with income below $40,000 receive the credit. If structured similar to one pitched last year, the credits would be expanded to tens of thousands of more households. Dayton would only say his plan had been scaled back some, but still be of notable magnitude.
"You're talking a significant amount of the surplus," he said. A Dayton spokesman said details would come out with the full budget.
House Tax Committee Chairman Greg Davids, R-Preston, said House Republicans are receptive. He said the credits could offset cost pressures that could increase after a child care unionization push embraced by Dayton.
"I'm glad he has seen the light," Davids said. "I'm glad he's willing to put some of the surplus into a tax credit."
Minnesota Child Care Association President Chad Dunkley said the offering is overdue and critical for middle-class families struggling with rising care costs.
"Quality care matters for all kids, no matter what income level a family is at," said Dunkley, chief executive of the 65-site New Horizon Academy. "The first five years of a child's life is really expensive for young families."
