The lack of accessible child care in Mississippi is keeping 7% of the state‘s labor force out of work and costing the state billions of dollars.

If those 7% of people constrained from full-time employment because of child care needs rejoined the labor force, it would add about $8 billion to Mississippi’s gross domestic product per year, according to a new report from the Mississippi Early Learning Alliance, which advocates to improve early childhood education in the state.

“Mississippi’s elected leaders have done great work bringing in new corporations offering high-paying jobs,” said Biz Harris, executive director of MELA. “Now we need to ensure that Mississippi parents have access to stable and reliable child care for infants and toddlers, and all children during traditional and nontraditional work hours so that Mississippi can fill those jobs.”

MELA’s recently released report explores how the lack of child care access is weakening Mississippi’s labor force. The report also highlights the financial problems within Mississippi’s child care industry.

Child care costs about $100 to $200 per week on average, depending on the location, the child’s age and other factors. Even if there are slots available in child care facilities, they may not have the right hours, price or services for every family.

Economists consider the child care industry a “broken market,” meaning it hasn’t been able to balance its supply and demand by itself. There is high demand and high prices for child care, but limited supply. 

On top of that, many child care workers are leaving the field due to low wages and difficult conditions. Their median annual wage is $22,620, which is below the federal poverty level for a family of three or more. This despite a 2023 survey finding that about 70% of Mississippi’s child care workers work 40 hours a week or more. 

There is state and federal support for child care in Mississippi. The state is part of two federal block grant programs and one food reimbursement program. There’s a 50% income tax credit for employers who provide child care during work hours. 

There’s also 37 state-funded, early learning collaboratives composed of school districts, Head Start agencies, child care centers, and private, non-profit organizations that are funded and overseen by the state Department of Education. However, they only reach about a quarter of Mississippi’s 4-year-olds, and do not provide child care to infants and toddlers.

And according to MELA’s report, Mississippi still spends less per child on early childhood education than any other Southern state. Mississippi spends $601 per child. By comparison, Arkansas spends $3,009 per child. 

Public and private entities are working to help children and their parents. 

Last year, the Mississippi Department of Human Services contracted with child care platform Wonderschool for $8.3 million. Wonderschool is a platform that assists child care providers in setting up at-home programs for a percentage of their earnings. 

The program assisted new child care providers with starting their programs and established the first statewide pool of substitute child care teachers. MDHS provided start-up grants of $10,000 for in-home facilities or $25,000 for centers and gave reimbursements. The Mississippi Department of Health streamlined the process for establishing a child care business.

“The heart is there to work in child care, but you’ve got to be able to economically make it, you know, and that’s something that, in collaboration with the department, you know we’ve been seeking to do in different ways,” said Jason Moss, CEO of Wonderschool, a San Francisco-based company founded in 2016. 

So far in Mississippi, the program has helped establish 95 child care programs and counting, adding 3,274 child care slots. Mississippi’s substitute teacher pool has 249 substitutes and counting.

Providers say the program helped them with marketing, funding, logistics and more. They used Wonderschool’s platform and self-serve modules and could work one-on-one with business coaches. 

Providers like Melissa Riddle, director of IPL Christian Academy in Byhalia, received support at every step. “I was told before starting this journey that it will not be easy, but [with] Wonderschool I have a tremendous amount of gratitude for all the help that I am provided,” she said. 

Janice Spann of JJ’s Afterschool Nursery in Raymond learned how to advertise and run her business, as well as receive funding and one-on-one coaching. So far, the only children in her daycare are her two grandchildren. 

Spann wants lawmakers to know that child care is a necessity. “It is a necessary foundation for our children and for their future success, which will ultimately affect us all,” she said, “Not to mention the absolute need for working parents to have a safe haven for their children, as they learn and grow.”

MDHS’ chief communications officer Mark Jones said “If we fail to invest in child care, we’re not only letting down today’s workforce, but also letting down the workforce of tomorrow.”

Much of the funding for this collaboration came from COVID-19 relief funds and the Child Care Development Fund, a federal fund to help low-income families get child care. 

While MDHS and Wonderschool are helping providers, the Mississippi Low Income Child Care Initiative has a program for parents. MLICCI, like MELA, is  working with the state Senate’s Labor Force Participation Study Group and Study Group on Women, Children, and Families. 

MLICCI is a nonprofit organization working to make child care more accessible to single mothers in Mississippi. MLICCI’s Employment Equity for Single Moms program offers job training, education, child care and more so that low-income single mothers can find higher-paying jobs.

The program provides training and coaching for single mothers. It provides child care by either signing up moms for the state’s child care assistance program or with its own private funds. MLICCI also covers transportation.

Carol Burnett, executive director of MLICCI, said that women often get steered into low-paying jobs and an “overwhelmingly large number of workers in those jobs are women.” 

“Those jobs where most of the workers are women pay less than the occupations where most of the workers are men. And so one of the solutions is to try to make sure that those higher-paying occupations are among the options presented to moms.”

Over 2,700 mothers across the state have benefited from the program, Burnett said. About 35% of participants got into a higher-paying job, and over 20% got into training and education. 

One of them is BreAnna Wilson, mother of two who joined the program after learning about it from her boss. She moved to Mississippi after her divorce and was struggling financially.

“It’s been very helpful on my end because some of the jobs, when I started off with my jobs, I really wasn’t getting that much pay, and so once I did get my check it was enough to pay a bill and maybe to get my daughter some diapers or get a few things,” she said. 

Now, she can save and continue working towards her goal of being a marriage and family therapist.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Mississippi Today’s Geoff Pender, Bobby Harrison and Adam Ganucheau discuss the continued effort to eliminate Mississippi’s income tax. They discuss what that could mean for Mississippi and how the process could play out moving forward.

READ MORE: As lawmakers look to cut taxes, Mississippi mayors and county leaders outline infrastructure needs

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Politicians often depend on numbers to make their argument. But numbers can be confusing and misleading.

Supporters of eliminating the income tax cite a lot of numbers to bolster their contention that the state can afford to phase out the tax.

Both Gov Tate Reeves and House Ways and Means Chairman Trey Lamar, R-Senatobia, recently cited some of those numbers during House Speaker Jason White’s daylong summit on the state’s tax structure. While White stressed that the summit was a “fact finding” mission, it is no secret that the speaker, Lamar and Reeves all are strong advocates of eliminating the state’s personal income tax.

The income tax accounts for between 25% and 30% of total general fund revenue even after the $145 million cut to the tax in 2016 followed in 2022 by a $525 million income tax cut that is still being phased in.

At the summit Reeves used the 2016 and 2022 income tax cuts “to dispel the myth” that complete elimination of the income tax would curtail jobs growth.

Since those previous two cuts, “our economy is thriving, private sector investment in our state has shattered records, and our unemployment rate is at an all-time low with more people working than ever before,” Reeves told summit goers.

The myth the governor cited – that cuts to the personal income tax would curtail jobs growth – has not been prevalent during debate of the issue. Instead, the main debate is whether eliminating such a large source of revenue would make it difficult for the state to provide vital services, such as for education, health care and law enforcement.

But the governor pointed to recent success in luring major economic development projects to the state, such as Amazon Web Services to Madison County and a plant to build electric batteries to power commercial vehicles to Marshall County. Both plants are major wins for the state.

But more to the point, Mississippi was in the bottom five states in the nation with jobs growth of 0.7% in 2023, according to the Bureau of Labor statistics.

 Perhaps that anemic jobs growth should not be blamed on the past tax cuts, but by the same token it is difficult to argue the tax cuts are spurring jobs growth.

While Reeves touts the state’s low unemployment rate, he fails to mention that Mississippi has the nation’s lowest workforce participation rate.

That might be why some business representatives at the summit cited workforce training, not tax cuts, as the top issue.

Lamar, on the other hand, made the forceful arguments that state services would be OK if the income tax is eliminated.

Since 1999, Lamar said, the state has averaged annual state general fund revenue growth of 3%. He said 3% growth equates to an extra $230 million per year – more than enough money from growth to afford to phase out the income tax.

In 1999, the total state general fund revenue was less than half of the $7.6 billion generated now by various taxes, primarily the sales tax and income tax. And 20 years from now, if the income tax is not eliminated, 3% will be a lot more than it is now.

Perhaps a simpler way to look at the numbers is that the tax on income generates almost 30% of state general-fund revenue.

When the $525 million 2022 tax cut is fully phased in, the income tax still will be the second largest source of general-fund money, generating about $2.2 billion annually, according to Senate Finance Chairman Josh Harkins, R-Flowood.

Plus, an important item to remember is that the $2.2 billion is in today’s dollars. A decade from now, two decades from now, the same levy on income will generate much more than $2.2 billion.

At White’s tax summit, Harkins pointed out the state has received an additional $33 billion in COVID-19 relief funds. That money went to state government, local governments, businesses and individuals and created a massive, unprecedented boon in state revenue.

That has generated tremendous surpluses, though state revenue collections have been slowing significantly during the past two years.

Even with the slowdown in revenue, the state still has tremendous reserves that make the beginning of the phase in of elimination of the income tax doable in the immediate future.

So, it is likely that no consequences of the tax cut will be felt during the remainder of Reeves’ tenure.

But the question is whether the state can still deal with losing more than one-fourth of its general fund revenue a decade or two decades from now when the federal government money spigot is not flowing so freely.

What will the numbers say then?

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.