MONTPELIER — With little debate and by a 24-6 vote, the Vermont Senate gave preliminary approval on Thursday, March 30, to a bill that would inject $150 million a year of new funding into the childcare sector and create a new parental leave benefit. The Senate gave final approval by a voice vote the next day.

Sen. Ruth Hardy, D-Middlebury, who presented the bill to colleagues on the Senate floor, began by recalling how, upon arriving in Vermont 21 years ago, she had begun to look for childcare — before even unpacking her boxes. After signing up for waitlist after waitlist, Hardy finally landed a spot for her toddler. But each year, Hardy said, she “constantly did the math” to see if her wages would “come even close to covering the high cost of one, then two, then three kids in childcare.”

“It didn’t,” she said. “And two decades later, this scenario has not changed. And the pandemic made it worse.”

The bill, S.56, has undergone a major rewrite since it was first introduced last month. Gone, for example, is a centerpiece of the original legislation: free, full-day pre-K in public schools for all 4-year-olds.

But Hardy, who had championed the pre-K provision, told her fellow lawmakers that while the bill before them didn’t have “all the elements” she’d initially hoped it would, it still represented “a monumental step forward in expanding access, affordability and equity in the provision of childcare in Vermont.”

Most agree the economics of childcare are broken in two ways: Families can ill-afford the cost, and workers can’t make ends meet. By increasing reimbursement rates to providers by nearly 40% and by expanding who is eligible for subsidies, the bill attempts to address both problems.

Currently, Vermont’s childcare subsidy program pays the full cost of tuition for families living at or below 150% of the federal poverty level. (That’s $45,000 for a family of four.) The Senate bill would eliminate co-payments for those making up to 185% of that threshold ($55,500 for a family of four) and extend partial subsidies to families making up to 600% ($180,000 for a family of four.) Under current law, childcare subsidies end for families with incomes above 350% of the federal poverty level.

Childcare is a shared priority between the House and the Senate, but the Senate’s bill nevertheless sets the stage for tense negotiations with the House.

S.56 now also includes a new 12-week parental leave benefit, the inclusion of which came late in the process. The upper chamber has long been lukewarm on paid leave, and key Senate Democrats have argued this year that childcare should be the priority.

The leave amendment is generally viewed as the Senate’s rebuttal to H.66, a bill backed by House leadership that would enact one of the most robust paid family and medical leave programs in the country, to the tune of over $100 million a year.

In the Senate bill, one eligible parent could use all 12 weeks of the parental leave benefit, or two eligible parents could split the 12 weeks. The benefit would max out at $600 a week. Mirroring the childcare subsidy cut-off, families at or below 600% of the federal poverty level would be eligible.

The upper chamber’s parental leave proposal, which would cost an estimated $15 million a year, doesn’t include benefits for any other types of time off — such as medical or caregiving leave — though those are included in the House bill.

And to shave the payroll tax needed to fund S.56 down to 0.42%, the bill also would repeal Vermont’s child tax credit — a measure passed only last year that was championed by House leadership.

The tax credit gives families with kids under the age of 5 up to $1,000 per child, depending on their income. Sen. Ann Cummings, D-Washington, who chairs the tax-writing Senate Finance Committee, argued on the floor Thursday that the credit had initially been agreed to in the absence of more ambitious action on childcare.

“Children 0-5 were chosen because of the cost of childcare. Tweens and teens cost a lot of money, they outgrow their clothes every three months,” Cummings said. “You have to keep re-supplying them. And they eat a lot. But we specifically took the younger kids because of the cost of childcare.”

But critics of the Senate’s attempt to repeal the credit have noted that it’s been claimed most often by people so poor that they already receive free childcare. And at a budget briefing last Thursday, House Speaker Jill Krowinski, D-Burlington, said she was “deeply concerned” about the idea.

“We have seen time after time that this program works,” she said, pointing to its impact on “lower income, vulnerable families.”

NAY VOTES

Last week’s vote on the Senate floor wasn’t completely by party line. Sen. Richard Westman, R-Lamoille, voted alongside Democrats and Progressives to advance S.56. But Republicans in the Legislature have otherwise largely echoed Gov. Phil Scott, who, while supportive of increasing funding for childcare, has made clear he’s not willing to raise taxes to do it.

Senate Minority Leader Randy Brock, R-Franklin, told his fellow senators that while S.56 was a “great bill” that would do “wonderful things,” he worried about Vermont’s capacity to afford it in the long term.

“I’m very concerned about the clouds on our fiscal horizon,” he said. “We see the disruption in the banking industry. We see high inflation, the potential of a recession on the horizon. I’m not sure that this is the wisest thing to do.”

In a statement Thursday evening, Aly Richards, the CEO of Let’s Grow Kids, a childcare advocacy group, predicted that the bill “would change the trajectory of our state.”

“S.56 does what childcare advocates have been calling on lawmakers to do for years: create a long-term, sustainable revenue source that can fund an accessible and affordable childcare system,” Richards wrote. “On behalf of Vermont’s youngest children, parents, employers, and early childhood educators, we thank Senators for their hard work to craft a bill that will make Vermont more affordable and help our economy grow.”

The bill is headed to the House.