Payroll Tax Among Childcare Proposals

Expanding access to affordable childcare is a top priority across Connecticut policymakers, employers, and family advocates.

Beginning with the executive branch, Gov. Ned Lamont is pushing the establishment of a Universal Preschool Endowment.

Supporters frame this plan as a strategic investment in Connecticut’s families, early childhood workforce, and the state’s future.

The endowment is designed to support a comprehensive early childhood system that benefits children, families, childcare facilities, and public schools.

Initially, the endowment will be funded with $300 million from the fiscal 2025 surplus, with additional funding drawn from unappropriated surpluses in ongoing years.

Tri-Share Model

Childcare proposals include a range of additional initiatives, including significant financial investment through legislation, notably SB 1 and  HB 5003. 

SB 1, a priority bill for Senate Democrats, addresses numerous childcare and early education initiatives, including tri-share, a new model designed to ease the cost burden for families.

The tri-share model splits childcare costs between the participating employers, employees, and the state.

The tri-share model splits costs between the participating employers, employees, and the state. Participating employers are responsible for at least one-third of an employee’s full-day childcare costs.

Eligible employee will be required to pay 7% of their share, with the balance covered by the Universal Preschool Trust.

With over 74,000 job openings across the state, the business community believes this model could be an effective way to help retain and attract employees. 

Payroll Tax

HB 5003 and SB 1369 call for other drastic funding measures, with the latter featuring a 1.5% payroll tax on all businesses.

Testifying earlier in the session before the legislature’s Children Committee, CBIA’s Jenna Grasso called the bill “a counterproductive and regressive funding mechanism, which would discourage businesses from expanding in Connecticut and hinder economic growth.”

CBIA’s Jenna Grasso called the bill “a counterproductive and regressive funding mechanism.”

SB 1369 has since been amended and now targets businesses with 200 or more employees.

CBIA will continue to fight against regressive tax measures targeting Connecticut’s businesses—many of which are paving the way for affordable childcare solutions.

Likewise, CBIA urges lawmakers to support HB 6839 in its original form, which allows home-based childcare providers to increase their capacity and expand their small businesses.

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For more information, contact CBIA’s Jenna Grasso (860.244.1169).