Rep. Axne Unveils Bipartisan Legislation to Help Iowa Families Keep Up with Rising Child Care Costs

Today, Rep. Cindy Axne (IA-03) introduced bipartisan legislation to expand Iowa families’ ability to pay for rising child care expenses. The legislation, introduced with Republican Representative Pete Stauber (MN-08), would double the amount of money families can place in dependent care assistance plans (DCAPs) to allow families to keep up with the cost of child care.

The Improving Child Care for Working Families Act would increase the cap on how much families can place in their DCAPs to $10,000 in order to cover the current costs of child care.

The current limit, set at $5,000, has not changed since the Internal Revenue Service first set it in 1986. Child care costs have risen consistently over recent years, and the average cost for infant care in Iowa is $865 per month – just over $10,000 per year.

“I know how nerve-racking it can be as a new parent to have to budget for the rising costs of care every year. And now, if you have two children like me, you can end up spending more on child care than you would on renting a two-bedroom home,” said Rep. Axne. “We need to make sure we’re giving Iowa families the tools they need to afford the current cost of child care, and this legislation would update current tools to reflect the realities of a modern family budget.”

“For too many families in Minnesota, accessing quality and affordable child care has become nearly impossible. This issue not only harms parents’ ability to rise in the workplace, but also prevents many from entering the workforce at all,” said Rep. Stauber. “By increasing the DCAP cap from $5,000 to $10,000, more families will be able to keep up with the rising costs of child care. I thank Congresswoman Axne for joining me in introducing this legislation. As parents continue to struggle to afford the skyrocketing costs of child care, I remain committed to working with my colleagues on both sides of the aisle to find more solutions to this pressing issue.”

According to the Economic Policy Institute, infant care in Iowa cost 18% more per year than in-state tuition for a four-year public college. Care also costs 12% more than average rent in Iowa.

The legislation has been endorsed by the National Child Care Association, the Employers Council on Flexible Compensation, the Save the Children Action Network (SCAN), the Early Care and Education Consortium, National Association of Social Workers, and the Iowa Primary Care Association, as well as local Iowa businesses and health care providers.

"Access to affordable, high-quality child care is a major obstacle in Iowa," said Denise Rathman, Executive Director of the National Association of Social Workers, Iowa Chapter. "Increasing the amount that families can contribute to dependent care assistance plans is one way to help working families access high quality care for their loved ones."

“Middle income families are struggling to afford quality early care and education for their children. They make too much money to qualify for any kind of state or federal assistance but not enough to pay for child care in centers that offer higher quality,” said Cindy Lehnhoff, Director of the National Child Care Association. “Because of this they are often forced to choose unlicensed day care for their children. This bill would certainly help families in this income bracket access higher quality early care and education for their children.”

Employers offer DCAP, a type of flexible spending account, to give parents the ability to set aside pretax income for child care expenses. This legislation will expand families potential savings through these accounts, allowing them to better save for the cost of child care at no cost to employees or employers who utilize this program.

Rep. Axne is also committed to expanding access and improving the quality of child care in Iowa.

Following reports of child care safety violations across Iowa last year, Axne introduced legislation to assist states with implementing background check requirements for child care workers. She held a forum on the state of child care in Iowa after reports of infant and child injuries and death. Here, she heard from parents and child care experts about the various needs for child care safety and access.

Last month, Axne introduced bipartisan legislation to expand eligibility for Small Business Administration (SBA) loans to include non-profit child care providers.