Day care providers could find relief in property tax exemptions

Day care access is a top concern for countless working and low-income parents throughout the state. For some, it’s even become a crisis.

Sponsored by Rep. Glenn Gruenhagen (R-Glencoe), HF2834 would create a property tax exemption for certain licensed child care facilities. It was laid over Wednesday by the House Property Tax and Local Government Finance Division for possible omnibus bill inclusion.

Its companion, SF2874, sponsored by Sen. Scott Newman (R-Hutchinson), awaits action by the Senate Taxes Committee.

The property tax exemption would only apply to nonprofit facilities that participate in the Child Care Assistance Program. The program, which receives federal, state and county funding, subsidizes child care expenses of low-income families.

The idea originated when Gruenhagen learned about Precious Little Blessings, a church-affiliated day care that opened in Glencoe in 2016. Because the facility is not attached to the church it is assessed property taxes. The day care currently serves 45 children full time and has a waiting list.

“There is such a great need for child care in rural Minnesota,” said Katie Rickert, director of Precious Little Blessings. “In Glencoe alone there have been many home day cares that continue to close down day after day and so many people are seeking child care.”

“Paying for day care by parents is a hardship in many cases, and when an additional property tax is assessed on the facility it’s passed along to the parents,” Gruenhagen added.

Rep. Abigail Whelan (R-Ramsey) was concerned the bill would increase the complexity of the property tax system.

“I don’t particularly like it whenever we do really specific carve-outs, but I do want to help,” Whelan said.

Rep. Steve Drazkowski (R-Mazeppa), the committee chair, asked Tom May, legislative liaison for the Minnesota Association of Assessing Officers, to work with Gruenhagen to explore an approach that would help day cares and avoid a special tax carve-out.