From the Office of State Senator Rodney Ellis

For Immediate Release
April 16, 1997
Contact: Rick Svataro, (512) 463-0113

Senator Ellis Wins Senate Approval for Measure to Increase Loans to Child Care Providers.

AUSTIN, Tx. -- State Senator Rodney Ellis (D-Houston) today won unanimous Senate approval for legislation (Senate Bill 265) aimed at increasing access to quality child care for Texas families. Ellis said the legislation would expand the state's Small Business Linked Deposit Program to include small businesses and nonprofit organizations that provide child care services.

"Making low-interest loans available to child care providers will help increase access to quality child care for Texas families," said Ellis. "Reliable child care is essential to our state's economic future."

Ellis said child care providers face a number of barriers to raising the capital they need to build new facilities or enhance the quality of existing facilities, staff and child care -- while keeping child care affordable for working families. The vast majority of child care providers are small businesses whose credit needs are much smaller than a typical business loan.

"Expanding the state's Small Business Linked Deposit Program to include child care providers will help make child care services more available for working families in Texas," Ellis said. "Dependable child care helps parents succeed at work, expands opportunity for children and strengthens the Texas economy."

The Texas Small Business Linked Deposit Program currently makes low-interest loans available to businesses with fewer than 100 employees, businesses locating in an economically distressed community, and historically underutilized businesses. The funds may be used for a variety of business needs including working capital, or for the purchase, construction or lease of land and equipment.

In a linked-deposit arrangement, the state makes a deposit in a financial institution in return for the bank's commitment to invest some or part of the amount in low-interest loans to certain types of businesses. Ellis said Texas could facilitate private-sector lending for child care services by expanding this program to child care providers.

According to Ellis, 2.8 million Texas children under the age of 18 have both parents -- or their only parent -- in the workforce. By the year 2000, 70% of preschool-age children will have working mothers. In addition, the Texas Comptroller of Public Accounts reports that child care is the third fastest-growing industry in Texas. Child care employment is expected to rise by 33,300 jobs or 32 percent between 1993 and 2000.