Dollar for Dollar A little-known tax credit program could mean big bucks for early childcare, but the Lafayette and Calcasieu biz communities need to act before Dec. 31.

by Patrick Flanagan

A little-known tax credit program could mean big bucks for early childcare, but the Lafayette and Calcasieu biz communities need to act before Dec. 31.

Last year, despite a Louisiana tax credit that’s been on the books since 2008 providing a full refund on donations of up to $5,000, not a single dollar was donated by local business owners to the Lafayette Parish School System’s early childcare program — a program aimed at boosting the learning experience for children under 5.

This unfortunate occurrence, however, isn’t the result of tight-fisted business owners — it’s a problem of no one knowing the tax credit exists.

That’s why Daniel Noel was brought on in 2014 as a marketing development specialist for the On Track by 5 Alliance — LPSS’ in-house child care resource and referral agency, which is one of only two such in-house agencies in the state. The agency is a staff of three people who work directly with the affiliated early learning centers.

A $33,500 grant the school system received from the Pugh Family Foundation to help identify potential donors pays Noel’s salary. “I’ve spoke recently with 54 CPAs, and only one knew about it,” Noel tells ABiz.

According to Noel, after not receiving a single donation last year, the school system has since changed course and taken a proactive approach to getting the word out on the tax credit. And it’s starting to work.

So far this year, says Noel, the On Track by 5 Alliance has received $10,000 in donations, with another $65,000 in commitments from Lafayette Parish’s business community. And there’s still time to make a donation; Dec. 31 is the cutoff for the coming tax season.

“Basically, it’s a dollar-for-dollar tax credit,” he says. “So if a business comes in and donates $5,000, it will reduce their tax liability by $5,000. Or let’s say your tax liability is $3,000 and you put in a $5,000 donation, you’ll get back $2,000. You’re still not out anything, and really, you would have owed the state $3,000 if you didn’t donate.”

In parishes across the state, according to the Louisiana Department of Revenue, about $1.2 million in exemptions were claimed by donors between 2012 and 2014 for child-care programs. Anyone with a tax ID can donate and receive the credit; individuals wishing to donate get the benefit of a charitable contribution.

Unlike other parishes, however, Lafayette’s On Track by 5 offers a unique situation in that all the money donated will stay in the parish.

“We’re kind of like a test pilot program,” says Noel.

“There’s seven such agencies in the state, but Lafayette and Calcasieu are the only parishes with agencies that fall within the school system. The other agencies are all privately run.”

For example, the referral agency situated in Monroe covers a 10-parish area, so the money donated there is then spread out over that constituency. The same goes for the agency in Shreveport, which also must spread donations out over a 10-parish region.

“We have a unique situation here in Lafayette [and Calcasieu] that really has the opportunity to do something and go a long ways,” Noel adds. “Other agencies cover multiple parishes, so if a business donates it’ll be distributed among all those parishes.”

And the importance of this program is more than just doing the right thing and donating to the development of infants through age 4, because these programs go hand-in-hand with the future of our business community, Noel says. These children are the business leaders and employees of tomorrow, and it’s especially incumbent on all of us to find ways to close the achievement gap in high-poverty areas. “Looking at the effects of early childcare, it’s really critical in helping build our future,” Noel says. “Our business will essentially be investing in what will be their future employees.”

It goes beyond that as well. “For so long we have focused on educating children from 5 years and up, but now we’re realizing we have to start much, much younger,” Noel explains. “If a child experiences quality early learning prior to age 5, that child is 40 percent less likely to engage in some type of criminal activity. We talk about fixing the problem with incarceration, then let’s start at the foundation,” he adds.

“As a business, you’ll have to write that check to pay taxes regardless, so now, for once, you’ll have a choice on where that money goes: It can either go to the state, or you can let it stay right here in Lafayette Parish to create quality childcare for all children here,” says Noel. “The focus for us is to get the message out there to businesses that this credit is available.”