State Senator John Fredrickson, representing District 20 in central west Omaha, introduced LB856, which excludes all earned and unearned income for child care subsidy applications if the applicant or household member is self-employed at a licensed child care program or is employed at a licensed child care program, Head Start or Early Head Start for a minimum of 20 hours a week. As a result, qualified child care providers will be income eligible for the child care subsidy program.
My priority bill this session, LB856, provides categorical eligibility for child care workers to participate in the federal Child Care Assistance Program. The bill is designed to attract workers into the child care industry by providing them with no-cost child care for their own children. The intent is to increase child care worker recruitment and retention in order to fully staff child care programs throughout our State. This will produce a multiplier effect, enabling more working parents to participate in Nebraska’s overall workforce.
Successful Kentucky initiative
LB856 is modeled after a successful Kentucky initiative that recruited and retained 3,200 child care workers by providing subsidized child care for their 5,700 children. Adjusting these figures proportionally for Nebraska, this categorical eligibility would recruit and retain 2,175 parent providers into the child care workforce. With research showing that each of these workers would provide care for an additional 8 children, this would mean stable care for 16,000 children in our Nebraska workforce. The LB856 concept is simple and measurable—more workers in our child care workforce means more children served and more workers into our overall economy.
According to a statewide survey, commissioned by University of Nebraska Extension and We Care for Kids, 34% of parents with children under age 5 reported refusing a work opportunity, promotion or change because of child care costs. As we heard from business leaders during the hearing for LB856 before the Legislature’s Health and Human Services Committee, workforce development is our #1 business challenge and child care is one of the top two workforce issues.
Other states are also quickly working to adopt the Kentucky model to increase child care, including some of our neighbors. Iowa, under Governor Kim Reynolds, has already initiated its own pilot program that began in July of last year which allows child care workforce to apply for the Child Care Assistance Program for their own children—the same proposal in LB856.
We have seen indications that Colorado also is working on the same kind of eligibility for its child care workers. So, it is becoming even more urgent that we move forward to create this eligibility, as we compete for workers with our neighboring states.
Universally positive response
In bringing LB856, I have met with a vast array of stakeholders, some of whom testified in favor of the bill and others who weighed in with letters of support. The response has been universally positive. I am gratified by how many people from all across our state have weighed in with their personal stories in the online comments.
I also met with Governor Pillen late last year, prior to introducing the bill. I appreciate the Governor’s commitment to addressing our state’s child care issues. One area of feedback I was happy to receive from the Governor’s office was the importance of making sure we have a solution that works for large and small child care centers, as well as family child care providers. The Governor’s Office wanted to make sure we weren’t picking winners and losers, and I agreed. In working with the Health and Human Services committee, the bill has been amended to ensure opportunities for all child care providers.
Amendment ensures all providers can participate
The amendment addresses the issue that family providers and small centers often face as it relates to care of their children. Currently, these providers, especially in rural parts of the state, are often not able to receive subsidies due to Nebraska Department of Health and Human Services (NDHHS) rules that limit the ability to receive subsidies for care of their own children. As amended, LB856 requires child care employers to make reasonable accommodations so employees are not caring for their own children. But if reasonable accommodations aren’t available, parents can care for their own children while receiving the subsidy. This will ensure equitable treatment of our providers and keep Nebraska in compliance with federal child care subsidy rules.
The amended language of LB856 also adds a requirement that NDHHS submit an annual report to the Legislature so we can measure the impact of this legislation across the state.
It is not possible to address the child care crisis in a truly meaningful way without investment. The cost of doing nothing is $489 million annually from missed work opportunities due to a lack of child care access, as determined in The Bottom Line: Economic impacts of inadequate child care in Nebraska. I offered, and the Legislature adopted, an amendment to invest $10 million annually into this program through October 1, 2026. By making the investment upfront and analyzing the impact, we can have a game-changing effect on the child care workforce and Nebraska’s workforce.
