Counties and municipalities in Maryland are gaining a powerful new tool to enhance child care options in their communities, thanks to the recently passed legislation, HB 389 / SB 516 of 2025. This innovative law, championed by Delegate Julie Palakovich Carr and Senator Nancy King, allows local governments to offer property tax credits to child care providers, addressing the pressing decline in child care availability across the state.
The Maryland Association of Counties (MACo) has voiced strong support for this legislation, emphasizing the need for locally driven solutions that cater to workforce needs and bolster economic stability. By providing counties with an additional option to assist child care providers, the law recognizes the critical role these services play in both local economies and community well-being.
One of the significant features of the new legislation is its provision for tax relief. Counties can now offer up to $10,000 in tax credits for properties owned by businesses that provide on-site child care for their employees, provided that the business employs at least 25 individuals. This expansion builds on the existing authority counties had to support child care providers through targeted tax incentives, which previously allowed for a real property tax credit of up to $3,000 annually for qualifying child care centers.
According to a 2024 report by Comptroller Brooke Lierman, Maryland’s child care sector has experienced a notable decline in the number of providers in recent years, placing immense pressure on working families and local economies. The new law aims to stabilize existing child care services and encourage new investments in child care infrastructure. With ongoing federal uncertainty and state cost shifts impacting local budgets, this locally driven solution empowers counties to address specific community needs without state mandates.
This flexibility is essential as counties strive to meet the growing demand for child care services while maintaining fiscal sustainability. By allowing local governments to tailor their responses to the unique challenges faced in their areas, the legislation seeks to create a more robust child care system.
In addition to Maryland's legislative advancements, southern Minnesota is also set to expand its child care options. On the same day, May 7, 2025, announcements were made regarding new child care initiatives in southern Minnesota, signaling a broader trend across the country where local governments are recognizing the importance of supporting families through enhanced child care services.
As communities across the nation grapple with the challenges of child care availability, these legislative efforts in both Maryland and Minnesota highlight a growing recognition of the need for innovative solutions. Child care is not just a personal issue for families; it is a critical component of economic development and workforce participation.
With the implementation of HB 389 / SB 516, Maryland is taking a proactive approach to ensure that child care providers can thrive. This legislation not only offers immediate financial relief but also signifies a commitment to investing in the future of families and the workforce. The hope is that by alleviating some of the financial burdens faced by child care providers, more families will have access to the quality care they need.
As local governments begin to explore the full potential of this new law, the impact on child care availability and quality will be closely monitored. Stakeholders, including parents, child care providers, and local businesses, will be watching to see how effectively these tax credits can stimulate growth in the child care sector.
In conclusion, the passage of HB 389 / SB 516 represents a significant step forward for child care in Maryland, providing local governments with the tools they need to support families and strengthen the local economy. By allowing counties to offer meaningful property tax relief, the law aims to stabilize existing providers and foster new investments in child care infrastructure, ultimately benefiting communities across the state.
