Free Market Failure: Childcare Supply and Demand Are Out of Balance in Kansas

One of the points of contention in the budget bill was the doubling of the state child care tax deduction, which occurred during the state legislature’s special budget session last month.

Sen. Mark Steffen, a Republican from Hutchinson, said the tax deduction served as an “incentive” for mothers to work and weakened “traditional families.”

He was rightly fiercely criticized by colleagues from both sides of the political spectrum.

Such opposition to the child care tax deduction is not only “insulting” — as Senate President Ty Masterson of Andover rightly noted — it also ignores the harsh realities facing Kansas families.

According to the Economic Policy Institute, child care costs are unaffordable for 92% of families in the state.

A shortage of child care continues to drive up costs, with demand outstripping supply in 104 of the state’s 105 counties.

The supply and demand problem increases childcare costs and keeps families – especially mothers, as women often earn less than men – out of work.

Childcare costs for children under four are about the same as tuition at a public university. Childcare costs are 28.4% higher.

Childcare costs are approximately 12.3% higher than the average rent in Kansas.

Child care costs in Kansas as a percentage of employee pay are among the highest in the country.

According to MIT’s Living Wage Calculator, the average single adult in Kansas with one child needs to earn $34.03 per hour to earn a living wage.

A living wage is defined as the amount a worker must earn to meet their basic needs: food, childcare, healthcare, housing, transportation, taxes, and other essentials such as clothing, personal care items, and broadband.

For a household with two working adults and one child, both adults must earn at least $19.29 per hour to meet their basic needs.

Steffen’s ideal household of two adults and one child, with only one adult earning an income, would need to earn $33.72 per hour, even if $0 was spent on child care.

According to the Kansas Department of Labor’s 2023 Occupational Employment and Wage Statistics report, the median hourly wage for Kansas workers (both hourly and salaried) across all industries was $21.76.

According to OEWS, about 75% of all workers earned less than $31.09 per hour.

In other words, more than three-quarters of Kansas workers do not earn enough to meet basic needs in a household of two adults and one child.

The numbers are clear: The vast majority of Kansas families do not earn enough to meet their basic needs, regardless of whether they also have to pay for child care.

Childcare is not a luxury for families in Kansas. It is a necessity.

Steffen’s comments underscore the troubling disconnect between them and the economic realities facing Kansas residents.

By dismissing child care tax credits as an incentive that could undermine supposedly “traditional families,” he not only ignored the overwhelming financial burden that the cost of child care places on households across the state, but he also ignored the critical role that affordable child care plays in enabling parents — particularly mothers — to participate fully in the workforce and public life.

Fortunately for Kansas families, the proposal to double the child care tax deduction ultimately passed with bipartisan support as part of the larger tax bill.

The state child care discount is now 50% of the comparable federal discount, providing some relief for many families in the state.

Alexandra Middlewood is department chair of political science at Wichita State University.