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Child care, paid family leave proposals on the table in Minnesota this session

A number of proposals could have a big impact on Minnesota families.

SAINT PAUL, Minn. — The legislative process is hitting full speed in St. Paul, now that Gov. Tim Walz has officially unveiled his $65 billion budget proposal.

This session, there are a number of proposals under discussion that directly impact Minnesota families, related to child care and paid family leave. The two topics, though separate and filled with their own complexities, are also intertwined in many ways. 

Here's a quick look at where things stand in both areas:


The budget proposed by Gov. Walz would establish a new child tax credit for low-income families and expand the eligibility for the Child and Dependent Care Credit, helping more families to cover the rising costs of child care. The concept has received bipartisan support, and although the numbers are subject to change through the legislative process, there are already several figures on the table. 

In the House, DFL Rep. Carlie Kotyza-Witthuhn's proposal would allow parents with children under five to receive child care tax credits up to $10,000 for each of their first two kids (with up to $5,000 offered for a third child). 

Clare Sanford, the government relations chair on the board of the Minnesota Child Care Association, called this an "incredibly exciting year for child care."

"There's tax credits. There are investments in the programs that support low-income working families in accessing child care. There are investments aimed directly at compensation of early educators. It's really comprehensive and wonderful to see," Sanford said. "A lot of negotiation is still to come, but to see a recognition finally — I think coming out of the pandemic, it's a completely different conversation about how we young children and how we support families."


At a cost of $668 million, Gov. Walz is proposing up to 12 weeks of paid family leave as well as 12 weeks of paid sick/medical leave for workers in Minnesota. Eleven states and the District of Columbia currently have similar paid family and medical leave policies. 

"Low-wage employees, certain minority groups, younger workers, and less educated populations are much more likely to lack access to paid leave," the governor's budget document states. "For many low-income Minnesotans, taking leave with little or no pay can create significant economic instability for their families, often during some of the most challenging times."

The program would be funded through a .7% payroll tax, which is leading some business groups to express concerns about the financial impact to businesses.

According to the Minnesota Chamber of Commerce, the new payroll tax would cost the business community $1 billion. 

"That's what we call a one-size-fits-all mandate," said Lauryn Schothorst, the Director of Workplace Management and Workforce Development Policy for the chamber. "The one thing that's important to know is, the Minnesota Chamber, our members — over 80% — offer paid leave in some form. They do so in a way they've developed with their employees, based on their needs, and they do it in a package."

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