Watson eyes city grants for child care providers in tandem with proposed county tax vote

Mayor Kirk Watson voiced support Thursday for a proposed grant program for home-based child care providers throughout the city, as one piece of a countywide effort to address one of the most persistent affordability issues in Austin.

Speaking at a summit examining the causes and possible solution for the city’s affordability problem, Watson said child care sits next to housing costs and transportation as the three biggest expenses that cause Austin to be too expensive for many lower- and middle-income households. While bond packages for affordable housing and Project Connect have targeted the first two affordability factors, he said the city and Travis County need to partner on increasing the number of child care providers throughout the area.

Recent statistics have found that there is a 40 percent annual churn rate of child care providers in the Austin area, which leads to a constant state of scarcity and rising costs.

With the city participating in a recent state program to provide 100 percent property tax rebate for commercial properties owned by child care operators, he said the next step is to provide assistance to home-based providers who don’t qualify for the state’s program.

An April memo from Adrienne Sturrup, director of Austin Public Health, and Sylnovia Holt-Rabb, director of the Economic Development Department, recommended creating a new grant program that would reduce property taxes for home-based providers. City data show that 21 existing providers would meet the four criteria to enroll, with annual exemptions ranging from $856 to $2,821 and a total city cost of $33,122.

As a further incentive for new home-based operators, APH is examining other forms of assistance including a grant program from the national Home Grown child care collective that could award another $150,000 for qualifying operators, with half of that money coming from the city budget.

The memo notes staff is looking for ways to allocate that money in the 2025 city budget.

“(Child care) is one of those one of those social determinants of affordability in the community because as things become less affordable overall, they become even less affordable in the area of child care,” Watson said. “There are a lot of people in this community that have done a lot of good work, United Way, being first and foremost along with Workforce Solutions (Capital Area) and the state of Texas being another …. It’s time for the community as a whole to come together with a simple voice and talk about how are we going to address this.”

Earlier this month, the Travis County Commissioners Court took the first step in putting a ballot referendum before voters in November that would generate $77 million annually to expand child care availability along with a variety of after-school programs. The measure, if put before voters and approved, would initiate a 2.5-cent property tax increase per $100 of a home’s assessed value.

The Commissioners Court is expected to approve the election later this summer.

Watson praised the county for taking steps to address the child care issue while the city has worked to include child care provisions into relevant policy, such as last year’s incentive package for NXP Semiconductors.

“We’ve not done (bonds) in the area of things like child care, but the county is now looking at how to approach that, and frankly, I don’t know how to applaud them enough for taking that step,” he said. “It needs to be a countywide approach because I think it’s a countywide issue, especially as we know what’s happening with some people moving out of the city. We want to make sure we’re addressing people that will need it for affordability purposes.”

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here. The headline of this story has been changed to reflect the fact that the county is moving forward with a tax election, not a bond package.