Fort Worth joins other Texas cities in approving tax breaks for child care facilities

Fort Worth follows cities like Dallas, Denton and Austin in offering select daycare centers a full property tax abatement.

The Fort Worth City Council on Tuesday approved the tax exemption, which will apply to 100% of a facility’s assessed value starting this year. The council’s vote was unanimous, with Council Member Chris Nettles abstaining as the owner and operator of a daycare center.

The ordinance came after nearly 65% ​​of Texas voters approved Proposition 2 in November. It gives local governments the ability to provide tax relief to a sector that has been experiencing financial difficulties, particularly during the Covid-19 pandemic.

Felicia Davis, owner of Ready Set Jump learning centers in east Fort Worth, told council members during a public hearing that “child care programs, as you know, are the backbone of our local economy” because they provide a safe and caring environment for children while their parents work or go to school. Davis said she would use the money saved from the tax break to take her preschoolers on field trips to places like farms, where the children can see where their nutritious food comes from.

“We face difficult choices: either keep prices low so our parents can afford our services, or raise tuition so we can invest in the quality of our programs and pay our employees what they deserve,” Davis said. “This property tax relief finally gives us some breathing room. Most importantly, it will help ensure that quality-rated centers serving children from low-income families stay open so they can continue to provide families with much-needed child care.”

Qualified child care facilities must be part of Texas Rising Star, the state’s quality assessment and improvement system for early childhood programs, and at least 20% of children enrolled in them must receive subsidized services through the Texas Workforce Commission. Fort Worth officials say with these requirements, there are 54 out of about 338 eligible child care programs in Fort Worth that can use the waiver. The city’s estimated revenue loss is $200,000 to the general fund; the general fund budget for fiscal year 2023 is $915.3 million.

For the average child care provider, the city estimates the savings would be more than $3,600. Both property owners and child care managers who rent their space would benefit financially, but operators of child care homes on a property that already has a property tax exemption would not be eligible to take advantage of the child care exemption.

Carlanda Reeves, who runs the children’s home Carlanda’s Heavenly Care, also spoke during the public hearing, describing operators like her as “overworked and underpaid.” She said she would use the extra money to provide transportation services to her families. Reeves was unaware that she cannot use the child care exemption in addition to her property tax exemption until she was informed by the Star-Telegram after the council’s vote.

“It’s crucial that they offer the same benefits as private institutions,” she said. “We do the same thing, but on a smaller scale.”

Mayor Mattie Parker thanked the child care facilities who attended the meeting and hoped that the tax exemption would be seen as a sign of recognition for their work.

“Being a Texas Rising Star child care facility is not easy. It means you provide high quality and strive to do so again and again each year. For that, we are incredibly grateful. Each of you is an integral part of the economic development of this community to ensure that we can provide high quality early childhood education to all children in the city of Fort Worth.”