Commissioner of the Department for Children and Families Ken Schatz
Commissioner of the Department for Children and Families Ken Schatz speaks to reporters before Gov. Scott signs the benefits cliff bill. Photo by Michael Dougherty/VTDigger

Gov. Phil Scott is proposing to use $7 million generated from a new tax on internet sales to boost the state’s spending on child care subsidies for Vermont families.

Vermont and other states started collecting the tax when the Supreme Court voted in June to overturn a decades-old case which had barred states from reaping sales taxes from businesses unless they had a local, “bricks and mortar” presence.

The tax is expected to bring in $4.6 million in the current fiscal year, and roughly $7 million in fiscal year 2020, according to the Scott administration.

The governor first announced his plan to dedicate this funding source to bolstering financial assistance for childcare on Thursday.

“The governor feels that early care and learning is a priority and as new and additional revenue comes in we should be prioritizing it accordingly,” said Ethan Latour, the governor’s assistant director of policy and communications.

Christine Hallquist, who is challenging Scott in the race for governor, is also proposing to increase the state’s spending on childcare benefits, but on a grander scale.

Christine Hallquist, the Democratic candidate for governor, speaks during a debate against Gov. Phil Scott at the Paramount theater in downtown Rutland on Wednesday. Photo by Bob LoCicero for VTDigger

She said she would look to find an additional $43 million to put in the Child Care Financial Assistance Program—which distributes the child care subsidies to Vermont families—but has yet to isolate a direct funding source to do so.

Her communications director, David Glidden, said Hallquist would look in part to find inefficiencies in the education fund to free up money for child care benefits.

“This is a priority for the state,” he said. “We’re hearing that from voters and as a responsive leader you will find the ways to make that happen.”

Latour questioned where Hallquist envisioned making the cuts, and Scott’s spokesperson, Rebecca Kelley, said the governor’s plan relies only on existing revenue, “rather than exacerbating our affordability challenges.”

Robyn Freedner-Maguire, the campaign director for Let’s Grow Kids, an organization that advocates to increase access to child care in Vermont, said the state’s child care system has been “chronically underfunded” for years.

On average, child care providers make only $25,000 per year, which has made it hard for the state to maintain an early education workforce, she said.

About half of of toddlers and infants who need child care don’t have access to regulated programs, according to Freedner-Maguire.

She called both Scott and Hallquist’s proposals to boost spending on child care subsidies “important proposals” and lauded both candidates for making the issue a central part of their platforms.

“The fact that they’re focusing on this as a high priority is a game changer,” she said.



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