Establishes the NYC under 3 act to impose a payroll tax on certain employers in the city of New York for the purposes of addressing child care affordability, accessibility, and quality for families with children under three years of age.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2037
SPONSOR: Walker TITLE OF BILL:
An act to amend the tax law, in relation to establishing the NYC under 3
act
PURPOSE OR GENERAL IDEA OF BILL:
Establishes the New York City under 3 Act.
SUMMARY OF PROVISIONS:
Section 1 The tax law is amended by adding a new article 24-A to read As
follows: New York City under 3 Act. Section 860. Definitions for The
purposes of this article. Section 861. Imposition of tax and rates.
Section 862. Pass through of tax prohibited. Section 863. Exemption
override. Section 864. Payment of Tax Section 865. Deposit and disposi-
tion of revenue. Section 866. Procedural Provisions.
Section 807. Enforcement with other taxes. Section 2. Sets effective
date.
JUSTIFICATION:
In New York City and across the nation, access to stable and affordable
child care is a basic need. Child care not only increases job stability
and economic security but also sets the foundation for children's future
learning. That said, child care imposes a large and growing cost on
working families, particularly those with low incomes. A May 2019 report
from the Office of New York City Comptroller Scott M. Stringer found
that a space in a child care center for an infant in New York City now
costs over $21,000 per year-over three times as much as in-state tuition
at The City University of New York or 125 percent of median rent city-
wide. Yet, as the report showed, only one in seven children in families
who are income-eligible for financial assistance now is currently in
subsidized care. The high cost of care combined with inadequate public
support, especially for infants and toddlers, has created a real crisis.
Families struggle to find the care they want and can afford for their
children, and child care providers lack the resources to support higher
quality and their own livelihoods. In New York City, 93 percent of child
care workers are women, and one in four live in poverty. Even for
parents and providers who are able to utiliz e what public funding is
available to lower the out-of-pocket costs of care, subsidy copayments
can be prohibitively high and reimbursement rates too low. New York City
has invested in universal pre-kindergarten for four-year-olds and taken
steps ,to direct similar investments to three-year-olds, but solutions
for addressing infant and toddler care are urgently needed. Stringer's
May 2019 report also found that New York City currently has capacity for
only 6 percent of NYC infants in licensed childcare centers across the
five boroughs; in the 10 communities with the most limited capacity,
there are more than ten times as many infants as licensed child care
spaces. To lessen the financial burden of child care, for both parents
and the workforce that provides this essential service, and to support
increased capacity for the city's youngest children, this legislation
authorizes a modest payroll tax in New York City to more than triple the
number of infants and toddlers in New York City-backed care. The
proposed NYC under 3-payroll tax applies to all private-sector employers
in New York City with payrolls of greater than $2.5 million annually,
excluding nearly 95 percent of firms. The average annual tax bill for
all covered firms would be approximately $40,000-or about $250 per
employee per year-and would initially raise an estimated $626 million
per year to fund what is the largest local expansion of child care
assistance for families with children under three in the nation.
PRIOR LEGISLATIVE HISTORY:
2019-2020: A8673 - Referred to Ways and Means
2021-2022: A5515 - Referred to Ways and Means
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately.
