Middle class child care scholarships proposed in Minnesota legislature

ST. PAUL, Minn. (FOX 9) - Parents across Minnesota could get help with one of their biggest expenses under a proposed new law.

The cost of childcare has even passed mortgages for some families, and the middle class missed out on most of the benefits of child-related tax relief last year. The Economic Policy Institute says the average Minnesota family with an infant and a 4-year-old is spending more than 37% of their income on child care. Some lawmakers are hoping state scholarships are a solution.

The sounds of a soothing song keep the kids asleep at Tonya’s Lullabies in St. Paul, but the cost of child care can keep parents awake at night.

Tonya Paige tries to keep her in-home childcare affordable for families, but it’s a stretch for some of them.

"A lot of parents just can’t afford full-time care," Paige said. "So what I’m hearing lately is a lot of parents are looking for part-time care."

West St. Paul teacher Suzanne Temple-Gumm is pregnant with her third child and anticipating child care costs of more than $45,000 a year.

Her husband picked up a second job, but they’ll still pay more for child care than for their mortgage, groceries, car payments, utilities, and student loans combined.

"It’s hard," she said. "We’re exhausted. And I do not believe that it should be this hard for a family to make ends meet when both parents are college-educated and working more than full-time."

The average cost of infant care in Minnesota is $16,087 a year, according to the Economic Policy Institute. For preschoolers, it’s $12,252.

The Minnesota legislature passed a big child tax credit in 2023, but its benefits targeted lower income families.

A new bill would offer child care scholarships to families making up to 150% of the median income — almost $190,000 for a family of four.

"The focus is on middle income families across the state of Minnesota," said LeeAnn Rasachak, the CEO of Women Venture.

Rasachak tries to help women start businesses, but childcare is one of the biggest barriers. She says funding scholarships and getting women in the workplace could boost the state’s economy by as much as $2.5 billion.

"We want to think about it as it's not pay for later," Rasachak said. "It's pay for it now. Invest in it now for the health and well-being of our economy and our children."

The bill will ask for money starting this year, but the authors are waiting for next week’s budget forecast before specifying how much.