In July of 2022, legislation adopted by Connecticut lawmakers went into effect. It allows municipalities to abate up to 100% of property taxes for licensed daycare facilities, including in-home daycares. The tax abatement can be extended for up to five years and aims to help make it easier for people to open new daycare businesses and help address a shortage of childcare. The question of whether or not to implement the reduction hit the agenda for the December 6, 2023, Board of Selectmen (BOS) meeting.
Selectman Kurt Vail said he had a lot of experience working with these abatements, which also exist for Veterans and, in Stafford, for volunteer firefighters. He said he estimated the Veterans’ abatement cost the town about $180,000 in tax dollars last year, and the state reimbursed just $21,000. He stressed that these were rough numbers that came from his memory. Given the potential cost to the town, Vail said he was not ready to approve adopting a tax abatement and urged daycare owners to come to a meeting and explain why this reduction is necessary.
Selectman Rick Hartenstein agreed that the board needed more information to vote. Stafford resident Gene Julian, who was in the audience, chimed in, saying that the board was focusing on the negatives of the abatement. He added, “The most valuable resource we have is the children.” The board reiterated that they are just looking for more information before deciding and ultimately voted to table the issue.
In an article from November 2022, CT Examiner reports, “In March 2022, the Office of Early Childhood reported a shortage of 50,000 infant and toddler slots across the state. And according to data from the agency, about 660 childcare providers shut their doors between early 2020 and today and 560 opened — a net difference of 100 fewer childcare businesses across the state.”
The state also recently mandated that town zoning regulations treat in-home daycares like other residential buildings, essentially making it impossible — or at least more difficult — for towns to prevent in-home daycares. (We covered that in this article.) It’s clear that childcare shortages are on a lot of minds at the state level and they are trying to address the issues in several ways.
Ellington wrestled with this issue this summer. At the time, CT Insider reported, “In Ellington, the Board of Finance voted earlier this summer for a program that would offer a 75 percent property tax abatement to day care centers in town during a two-year pilot and recommended that the Board of Selectmen adopt it. The program would require biannual reports by the facilities to town officials that would include the total number of available and filled slots, as well as the cost per child per week.” However, the Ellington BOS “decided to continue discussing the program after newly appointed Town Administrator Matthew Reed looks into it in detail. A few selectmen said that they're not yet ready to vote on establishing the program.”
One daycare provider told CT Insider, “that such a program would allow her to keep her rates steady and keep the dwindling number of day care centers in town up and running and possibly draw more to operate in town.”
Using a tax abatement to attract new business to town is not entirely new. Former Stafford First Selectman Sal Titus brought the idea of a more general tax abatement program to the Economic Development Commission, suggesting it could be a way to attract new businesses to town. However, there was never a formal proposal with the details of implementation.
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