As Indiana officials increasingly look to employers for help tackling the state’s childcare shortage, some gathered Wednesday to tout their internal solutions — and warn of a key risk in a years-old but unused tax credit.
The Indianapolis Airport Authority, which employs about 500 people operating several public airports and a heliport in central Indiana, seized on childcare as one fix for a demographic problem.
In 2019, half the municipal corporation’s workforce was set to reach retirement age within just five years. Their successors would be in their thirties and forties, and would have different needs, like childcare for their young kids.
But turnover was high, at 30%, and those leaving reported being unable to find affordable or high-quality care, said Rachel Stevens, senior director of human resources.
The airport authority now reimburses up to $10,000 in after-school care, summer camps and more for each child annually.
Stevens said turnover has dropped to under 10%.
“We are hardly losing anybody, and we’re certainly not losing anybody because they’ve got family issues going on that we haven’t been able to help them address,” she said, noting the airport authority also offers reimbursements for elder care.
Stevens spoke at a daylong childcare summit hosted by the Indiana Chamber of Commerce that also explored cheaper and pricier solutions.
Healthcare system Parkview Health has a staff of 18,000 working throughout northeast Indiana and northwest Ohio. It found that many exiting employees didn’t have a next job. Instead, they were leaving to take care of family.
But staff retention is key for Parkview, said Kristen Ruble, a well-being manager. It’s challenging to recruit from outside the state, and local talent can choose between the three different healthcare systems competing for their labor.
Parkview selected childcare “as one of those ways” to retain staff, with backup care being the biggest lift, according to Ruble.
“We are all day, all night,” she said. Most employees had childcare secured for their planned hours, but struggled when they had to pick up shifts last-minute.
“We partnered locally with our childcare facilities — those that had capacity in order to take backup care — and so then we were able to market that to our employees,” Ruble said. “… And in addition to that, backup care is expensive because you don’t know that you need it right away. So we decided to take a step forward and say we would subsidize that for you.”
Others have gone further. Cummins, an engine manufacturer with 70,000 employees worldwide, has its own childcare facilities for staff, said John Havenaar, the company’s vice president of total rewards.
One site in Columbus, Indiana serves between 100 and 150 children daily. But demand is closer to 1,500 seats, Havenaar said.
“There’s definitely an interest, I think, in expanding our … brick and mortar facilities,” he said. “We’re looking at those things now.”
The panel walked through different solutions based on a company’s resources and employee needs.
Stevens said airport authority leaders “don’t want to get into the childcare business,” for instance, after concluding that was “beyond” the best interests of the organization and its staff.
Panelists highlighted flexibility as a low-budget item, like allowing a parent to work remotely instead of take the day off when caring for a child too sick to attend school.
Parkview also participates in Tri-Share+, a regional initiative splitting the cost of childcare between certain employers, limited-income families and economic development grant funds held at the Northeast Indiana Early Childhood Coalition.
The healthcare system additionally offers employees money back for positive lifestyle habits — and matches the amount spent on childcare — while an internal social network allows employees to share babysitters, Ruble said.
Tax credit concerns
Gov. Mike Braun has repeatedly called on businesses to do their part after he secured approval for a $200 million infusion to a government-run voucher program for low-income children.
“Every business in this state ought to be interested in that, if they’re complaining about not having the workforce,” he told reporters after visiting a childcare facility in July. “… They should be interested, again, in paying for a good portion of it, and that’s why we’re going to try to offer them incentives to get involved broadly across the state.”
In March, he signed into law House Enrolled Act 1177, which expanded eligibility for Indiana’s employer child care tax credit to small businesses with up to 500 employees and broadened what spending is eligible for the credit beyond the establishment of new facilities.
Employers can get a credit for up to half their qualified spending on licensed childcare for their employees’ children, up to $100,000 per firm annually. But there’s a statewide cap of $2.5 million.
The changes were retroactive to the beginning of the year. The tax credit was first available in the 2024 taxable year, but has never been used, according to the Department of Revenue.
Sen. Kyle Walker, R-Lawrence, authored the credit.
“Until it was changed … it wasn’t as attractive, and I think now there’s just still an awareness issue,” he told reporters Wednesday.
Summit attendees repeatedly questioned what would happen if the cap is hit.
“That’s kind of the way that credits work when there’s a global cap,” Department of Revenue Tax Policy Director Collin Davis replied. “If you make an expenditure and (when) you file your return, you’re 26th in line and 25 people have claimed the maximum amount, you’re kind of out of luck.”
He said the agency processes credits in the order the tax returns are received, “which makes it all the more important to tax plan ahead of time and get the return in.”
But because the credit has never been claimed, there’s little information to go off. Davis said the risk businesses would be hit by the cap this upcoming tax year after making qualifying expenditures was unknown.
Stakeholders pressed for ways to track how much has been claimed as they consider childcare investments.
There’s no dashboard available, but the Department of Revenue is keeping tabs on the credit — and is “evaluating options for making this information more accessible,” according to the agency.
Camille Blunt, the chamber’s vice president of government affairs, urged the business community to take action and demonstrate to lawmakers if there’s any need for change.
“We’re not utilizing it, so we don’t have a good case or a basis for increasing that amount,” she said. “Once we do have that, … we’ll have a better story to tell.”
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.
