The state will pursue other ways to provide incentives that support the expansion of child care programs if the Executive Council continues to oppose a $1.3 million federal grant, Gov. Kelly Ayotte said Thursday.
If given a second term by the voters this November, Ayotte vowed her next state budget plan will create more incentives for students in the two and four-year college system to pursue a career in child care.
Ayotte made these comments during a ceremonial signing of the child care tax credit bill (HB 1433) at the Granite State YMCA in Manchester Thursday.
“I know it’s going to have an impact, this is going to help businesses expand childcare that otherwise would not happen; it’s going to create hundreds of slots,” Ayotte said.
In late May, the Executive Council voted 3-2 to reject a contract with the Pyridium Model Consortium of Missoula, Montana that would support professional development grants for childcare programs in the Granite Steps for Quality program.
The program is aimed at elevating credentials and improving learning environments in the child care industry.
Councilor John Stephen, R-Manchester, a former health and human services commissioner, said this was not the best use of taxpayer money.
Stephen instead said he supported a workforce training grant Ayotte had proposed in her 2025 budget but the Trump administration refused to let her spend federal welfare grants (Temporary Assistance to Needy Families) to pay for it.
“I still support that contract and if the council won’t support it then we will figure out a way to get those dollars out in a different way,” Ayotte said.
At last Wednesday’s council meeting, Councilor Joe Kenney, R-Wakefield, defended his vote against the grant.
“I have had child care providers congratulate me for supporting grants that could increase our capacity in the system,” Kenney said.
Councilor David Wheeler, R-Milford, said he opposed the grant due to the diversity, equity and inclusion (DEI) requirements in it.
As crafted, the tax credit bill would permit employers to get a 50% credit against either the 7.5% Business Profits Tax and/or the 0.55% Business Enterprise Tax for qualifying expenses they spent to create on-site child care for employees or to support at least 12 additional slots at an existing program.
Expenses could include not only construction, permitting and development but the first two years of costs to operate the program.
Firms would apply for the first-come, first-served credit capped at $5 million in any year.
They can claim the credit against any expenses starting next Jan. 1, but the Department of Revenue Administration said most businesses will not draw down on the credit until early 2028.
“To me this is about the future, how are we going to build a better Manchester, state of New Hampshire that is addressing the challenges 5, 10, 15 years into the future?” Manchester Mayor Jay Ruais said.
Granite YMCA President and CEO Michelle Sheppard said her program over five years intends to have nearly 250 o complete internships and enter the childcare field with proceeds from a federal grant from the Economic Development Administration (EDA).
This ReGen Valley Tech Hub project is led by the Advanced Regenerative Medicine Institute (“ARMI”) in Manchester.
Through the first 13 months, they have had 32 complete a 10-week internship and 26 have entered the field, she said.
“This means we are providing placement for another 140 children. We are chipping away at that need,” said Sheppard, noting the nine YMCA locations in the state care for 32,000 children a day.
Business and Industry Association of New Hampshire President and CEO Mike Skelton said it was impressive that this coalition of business and human service organizations won legislative support for this tax credit in the campaign’s first year.
“We are already talking about what the plan is for 2027,” Skelton said.
Ayotte said expanding child care and building more affordable housing requires not just one but many approaches.
The state needs to continue to support the child care scholarship program for income-eligible families and other efforts to boost the credentials of childcare workers which would translate to higher rates of pay for them, she said.
“When you have issues like child care and housing, you have to walk and chew gum at the same time,” Ayotte added.
