Austin childcare centers will spend less on taxes now (Photo by Getty Images / Maggie Q. Thompson)

Texans approved a constitutional amendment on Tuesday that lets cities and counties exempt child care providers from certain property taxes.

Two days later, Austin City Council took advantage of the vote, approving a resolution that will allow eligible child care operators in the area to write off 100% of the taxes appraised on their properties by the city.

Council Member Alison Alter, who sponsored the resolution, said there are many ways it will help families. “It will help maintain access to child care by keeping facilities from closing,” she said. “It could affect what they charge to families. And it can impact the quality of care they provide because the money they save can be spent to provide quality teachers. There’s a lot of different ways it can help.”

Alter’s resolution was co-sponsored by most of Council – Vanessa Fuentes, Jose Velásquez, Ryan Alter, Chito Vela, Leslie Pool, and Zo Qadri – and has broad support from the community. It directs the city manager to find other opportunities to help home-based child care providers, who aren’t eligible for the tax break, and requires that the necessary ordinance to finalize the tax exemptions be submitted for a vote on Jan. 18 – the first Council meeting of 2024.

Alison Alter warned Council during Thursday’s meeting that child care providers are expected to close in large numbers as the state’s Child Care Relief Fund comes to a close. The CCRF program distributed $3.5 billion of federal grant dollars to providers in the wake of the COVID-19 pandemic and is credited with keeping these businesses afloat. According to the Texas Association for the Education of Young Children, 44% of the providers who responded to their survey said they may close within the next year, now that the subsidies are ending.

Affordable child care is one of Alison Alter’s signature issues. “We have a child care ecosystem that is in freefall, frankly, across the country,” she said. “And here in Austin our child care providers are struggling. There’s a child care center that’s closing in Northwest Austin at the end of this month and parents are scrambling to figure out what their child care situation is. For some of the providers, reducing overhead can make the difference because they’re operating on very thin margins.”