Washington averages over $14K in annual child care costs

A new report by the Annie E. Casey Foundation shows how expensive it is to have a toddler in daycare in the state of Washington.

The report revealed that the average annual cost for center-based child care for toddlers in Washington was $14,355, or about $1,196 per month. In comparison, the cost of tuition at the University of Washington is 17% less at $12,242 a year.

Only five other states had higher annual costs for child care. This includes Minnesota ($14,607), Colorado ($16,333), New York ($16,551), Massachusetts ($19,961), and Washington D.C. ($24,396).

The state’s capital gains tax could infuse child care and early learning programs with over $500 million in generated revenue. A Senate bill was passed by the state Legislature and signed by Gov. Jay Inslee in 2021, creating a 7% tax on profits of more than $250,000 from the sale of some assets, such as stocks and bonds.

According to Senate Bill 5096, the first $500 million in revenues generated from the capital gains tax, along with any associated interest and penalties, go into the state Education Legacy Trust Account. The remainder is deposited into the Common School Construction Account.

The Education Legacy Trust Account is amended to permanently allow funds to be used for early learning and child care programs. Next year, the $500 million amount is adjusted by inflation.

In March 2022, Douglas County Superior Court Judge Brian Huber struck down the tax, ruling that it was “properly characterized as an income tax . . . rather than as an excise tax as argued by the State.”

Washington state Attorney General Bob Ferguson then directly appealed the decision to the Supreme Court, which later allowed the Washington state Department of Revenue to begin collecting the tax while it considered the appeal.

The Center Square previously reported on the capital gains tax bringing in almost $850 million in 2023, far exceeding initial expectations of bringing in at least $500 million a year for early learning and child care programs.