‘Babies in the budget’ advocates push paid leave, newborn tax credit proposals

Advocates gathered at the Indiana Statehouse Thursday to declare legislation on paid leave and newborn tax credits good for babies, their families and the state as a whole.

“What should be a joyful time — welcoming a new addition to the family — can become stressful,” the United Way of Central Indiana’s Ryan Myers said at a news conference.

Families, she added, may lose income during unpaid leave, even as their expenses jump: medical care, child care and supplies.

Some believe the policies could benefit the state’s future.

“We are to care (for) … our youngest citizens, and in my completely unbiased opinion, our cutest citizens,” said Dr. Melissa Klitzman, representing the Indiana Chapter of the American Academy of Pediatrics. “Investing in them can … allow for improved outcomes in maternal and infant health care and then also create a better and more health(y) society.”

Long shot paid leave

Senate Bill 115 would make Indiana’s Department of Workforce Development establish a paid family and medical leave program for all working Hoosiers.

The state of Indiana has had new parent leave since 2018. Over 4,000 state employees have used the benefit, which applies to parents of newborns and adoptees.

In a recent evaluation of the program, the Indiana Coalition Against Domestic Violence found that supervisors “overwhelmingly” reported that leave benefits outweigh burdens for morale, productivity, recruitment and retention.

“These policies that support families are good for babies, good for the budget and good for Indiana businesses,” concluded the coalition’s Colleen Yeakle.

Bill author Sen. Rodney Pol, D-Chesterton, said three in four Hoosiers don’t have paid leave — and two in three can’t even access unpaid leave.

“When a child is born, when a loved one falls ill, this largely puts them in an impossible choice: either go back to work or take care of your loved one,” Pol said. “This gap in support … forces people to make tough decisions that can have lasting impacts, not only on their financial stability, their health, their careers, but most importantly, their families.”

The initiative would use payroll contributions and would require millions in funding from lawmakers. A fiscal analysis of the bill notes that administrative expenses for Colorado’s program were $3 million in the 2022 fiscal year, $23 million in 2023 and $63 million in 2024.

Although Pol told reporters that his bill has bipartisan support, it’s unclear how far it’ll go. Lower revenues are expected to result in a tight budget.

“Weaseling in” tax credits

The news conference’s other highlight could have a more feasible path to law.

Senate Bill 497 creates a refundable $500 tax credit for newborns and adoptive children. Parents must be earning less than 720% of the federal poverty level — about $225,000 annually for a family of four, according to the U.S. Department of Health and Human Services. It would be retroactive to January 1 of this year.

Klitzman, the doctor, said the credit could help families buy things like infant-safe cribs and breast milk supplies, which can lower sudden infant death syndrome risk.

The bill would also scrap the additional dependent child exemption of $1,500. It offers about $45 in tax relief, according to the Indiana Community Action Poverty Institute.

Author Sen. Greg Walker, R-Columbus, also said the credit is more valuable than the deduction “because you have to have significant earnings before you have taxable earnings.”

“And some of the families, they’re not going to have any taxable income after their deductions go on, because they’re low income,” he said. “So this would be a direct benefit.”

A fiscal analysis estimates that the credit would reduce state income by $37.6 million annually, while axing the exemption would increase revenue by about $3.5 million.

Walker said the legislation faces a “difficult path.”

“What I’m really hoping to accomplish is to first get the awareness to it. But secondly, I’d like the language to be in play when we get down to the budget’s final package,” he said.

“I’m hoping I can weasel that in there,” he added.