Gov. Reynolds announces $25 million Child Care Incentive Grant Program

Gov. Kim Reynolds announced a new $25 million Child Care Business Incentive Grant Program at DEV2022, the Iowa Utility Association’s annual economic development conference, in Coralville on May 18.

The grant program will support child care projects across the state with $20 million to be utilized for local infrastructure investments for building and expanding capacity and $5 million to support arrangements between employers and child care facilities to expand and reserve child care slots.

“The program provides matching funds to businesses that choose to lead on this issue,” Gov. Reynolds said during her remarks.

Some 23% of Iowans live in a “child care desert” and Iowa has lost 33% of child care businesses over the past five years. The child care shortage has cost Iowa’s economy in $935 million annually in lost tax revenue, worker absences and employee turnover, according to a press release.

“I’ve heard from both parents and employers that child care is a barrier to work in our state,” said Gov. Reynolds in a statement. “One of the top recommendations from my Child Care Task Force was to incentivize employer investment in child care. This program will do just that by encouraging employers to help deliver child care solutions to their employees, thereby bolstering opportunities for recruitment and retention of workers.”

The state will accept application from June 17 – July 18.

“Access to quality child care is critical to the success of working families,” said Kelly Garcia, director of Iowa’s Department of Human Services. “This program underscores Iowa’s commitment to working families by putting child care where it’s convenient for parents, children, and employers.”

Federal American Rescue Plan Act (ARPA) are being allocated for the program. Senate Democrats criticized the announcement claiming Gov. Reynolds was attempting to take credit for a grant program made possible by federal American Rescue Plan Act (ARPA) funds allocated under Democratic Party leadership.

“Kim Reynolds is a phony,” said Rep. Zach Wahls in Coralville in a statement. “Once again, she is trying to take credit for work President Joe Biden and Congresswoman Cindy Axne are doing to help hardworking Iowans and their families.”

The governor launched a Child Care Task Force in March to address the child care shortage in Iowa. The state announced a series of investments based on the task force in November including an additional $10 million in funding for the Child Care Challenge Grant Program, as well as Iowa DHS promising up to $200 million in federal funding to help eligible child care providers who can verify financial loss due to the pandemic.

Gov. Reynolds also highlighted in her speech her administration’s determination in lowering tax rates, raising real GDP and a statewide commitment to broadband investment, among other priorities.

More information on the Child Care Business Incentive Grant can be found here.