Increase Access and Affordability for All Families
In This Section:
- Make child care assistance accessible to all by reforming policies related to cost and eligibility.
- Build a supply of child care programs and facilities that match families’ preferences.
- Ensure equitable access among historically underserved populations.
As news reports demonstrate every day, families continue to struggle with the high cost of child care, especially as the federal COVID relief funding runs out. Affordable care is in short supply, especially in rural communities and high poverty communities. Families with additional concerns, including those with children with special needs, those searching for providers who can support dual language learners, those needing care during nontraditional hours, or those seeking a safe space for children impacted by trauma can find themselves searching for months for an appropriate space, only to fall short.
During the pandemic, states took important first steps to create a system in which every parent and caregiver has the freedom to choose from a range of high-quality, appropriate, affordable child care options, delivered in diverse settings that meet their children’s and families’ needs and preferences.
Make child care assistance accessible to all by reforming policies related to cost and eligibility.
States have significant discretion to design child care assistance programs that meet the needs of families, and can make it as simple as possible to receive assistance.
III. Increase Access and Affordability for All Families
The pandemic gave states the opportunity to lower barriers to access and reimagine who qualifies for public assistance. To move to a transformative child care system, states and local communities need to permanently adopt these changes and continue to innovate and experiment on ways to make assistance available to the widest possible number of children and their families, with a focus on those most impacted by poverty and trauma.
Before the pandemic, no states extended eligibility for subsidies to families at or above 300 percent of Federal Poverty Level (FPL).1 In the past few years, several states have approached or surpassed this benchmark. Vermont raised their eligibility level from 350 percent to 575 percent in 2023 (effective in 2024). New Mexico’s eligibility level stands at 400 percent of FPL, while the District of Columbia provides subsidies for families earning up to 300 percent of poverty. In 2022, North Dakota and Maryland raised eligibility level to 85 percent and 75 percent of state median income, respectively, which equates to about 320 percent of federal poverty level in North Dakota, and 300 percent in Maryland. New York raised the income threshold for eligibility to 300 percent of FPL in 2022 and again, to 85 percent of state median income in 2023. Also in 2023, Maine raised its income eligibility level to 125 percent of their state median income. Illinois had increased its eligibility level to 225 percent of FPL, which it made permanent by statute in 2023.
A number of states waived copays for some or all subsidized families. So far, New Mexico and New Jersey have continued their policy to waive copays for all subsidized families. Other states capped copay to keep child care affordable. These include New York (1% of family income over federal poverty level), California (waived for families earning at or below 75 percent of state median income; capped at 1% for other families), District of Columbia (10% of family income), Montana (9%), Oregon (7%), Washington State (7%), Rhode Island (7%), and Vermont (10%, established as legislative intent). Illinois permanently lowered copay for families at or below 100 percent of poverty level to $1 per month, while also permanently capping copay for all families at 7 percent of the household income.
In 2021, Oregon passed HB3073, which ensures families at least 12 months of eligibility once they are enrolled in the subsidy program. New York passed a bill in 2022 that allows localities to provide families up to 2 years of eligibility.
Maryland passed legislation to give families who apply for subsidies presumptive eligibility, which allows them to receive financial assistance for a minimum of 60 days after submitting an application without waiting for the state to issue their final eligibility determination. Delaware, Montana, and Wyoming also have such policies in place.2
South Carolina created First 5 SC, a single web portal that offers families access to the full spectrum of state- and federally-funded early childhood services. At First5SC.org, families can check their eligibility for more than 40 services, including child care assistance, preschool programs, healthcare, special needs services, food and nutrition assistance, and parenting support. Then, with information they enter only once, families can apply for multiple programs simultaneously.
New Mexico has been a national leader in making sweeping policy changes to reduce family expenses and put affordable child care in reach for more families. In fact, funding for all early care and education programs has more than tripled over the past decade, due in large part to the work of several advocacy organizations.
Convening in 2009 under New Mexico Voices for Children, the group’s first strategy was to change the messaging local providers and advocates were using around funding early care and education. Previously, different groups and stakeholders competed against each other, all asking legislators for a small piece of a very small pie. ECE at that time received just 1% of state funding. The various groups agreed to reach legislators with one consistent message: increase the state’s investment in ECE to support the state’s youngest children. Included in this strategy was a broad-ranging educational campaign about the value of early care and education programs and their extraordinary return on investment. Relying on long-term studies like the Perry Preschool Project and the work of economists like James Heckman, the educational campaign covered the gamut from the science of neurological growth in the first five years, to the life-long improved outcomes that are realized with programs that nurture that development.
Not satisfied to simply request more funding, New Mexico Voices for Children came up with a plan for where the additional funding could be found: namely, to increase the annual withdrawal from the state’s multi-billion-dollar Land Grant Permanent Fund (LGPF). The fund, established in 1912, receives money from oil, gas, and mineral production, as well as earning income from the investment of that money. Since the LGPF is written into the state constitution – including the requirement that 5% be withdrawn annually and who the beneficiaries are (namely public education and some hospitals) – a constitutional amendment was needed to make this money available for early childhood programs. This would require support from the state’s legislature and a ballot initiative to be approved by voters.
For over a decade, state legislators debated but failed to pass a resolution allowing a ballot question asking New Mexico voters to approve the withdrawal of additional LGPF money for early childhood programs. While the House was generally supportive, a resolution continually failed to make headway in the state’s Senate. To move this resolution, a small group of 501C4 organizations focused on educating the public and policymakers about the importance of early childhood programs and spurring a shift in the balance of power in the Legislature to support the election of new, child-care-friendly candidates in 2020. These primary challenges against incumbent fiscally-conservative, elected officials was successful and the resolution finally passed both chambers in 2021.
Advocates, many of whom would become part of the Child Care NEXT coalition, then helped lead a campaign of engagement and grassroots advocacy to support the constitutional amendment. Organizing groups built a diverse statewide base of early educators, young people, parents, and advocates who led the fight. In 2022, advocates called, texted, and knocked on countless doors to remind voters not to skip the question on the ballot.
The result was an overwhelming success, with 70% of voters approving a ballot measure to increase the distribution by 1.25%. Of this increase, approximately $150 million in new funding will be made available for early childhood programs.
New Mexico’s ECE programs have greatly benefited from invested and supportive state leaders. Even before the passage of the constitutional amendment, ECE funding had grown from the initial 1% of the state budget to 3%. In 2019 the state Legislature and Governor Michelle Lujan Grisham created the cabinet-level Early Childhood Education and Care Department to house all of the state’s ECE programs and services. In 2020, Governor Grisham signed legislation creating the Early Childhood Trust Fund to provide long-term investments for New Mexico’s youngest children. The fund was launched with a general fund appropriation of $320 million and is sustained by the surplus of two revenue sources. It began distributions in 2022 in the amount of $20 million, with plans to increase the distribution by $30 million (or 5% of the three-year average of the fund) going forward. Due to stronger-than-expected revenues in 2021, economists estimate the trust fund will provide even more support in coming years, conservatively growing to provide more than $90 million in 2026.
But, while funding for ECE more than tripled, the state Legislature continued to fail to expand access to child care assistance, which had been cut during the Great Recession. During the pandemic, Governor Grisham took the reins announcing that beginning in July 2021 the state was raising income eligibility for child care subsidies to 350% FPL, up from 200% FPL. Families with income up to 400% FPL would also remain eligible so that a modest increase in income wouldn’t mean losing access to subsidies. Families in New Mexico with incomes of up to $111,000 a year for a family of four would now be eligible for subsidies. A 2021 study found that with the increase in eligibility, an additional 6,800 families could now participate in the subsidy program.
Additionally, beginning in May 2022, copayments were waived for all families enrolled in the state’s subsidy program. Previously, only families at 200% FPL or below qualified for waived copayments. New Mexico estimates that more than 30,000 families statewide now qualify for free child care. These two policies combined make New Mexico the state with the broadest eligibility for no-cost child care in the nation. In addition, the state dedicated $10 million in supply-building grants in communities with the highest need, which will allow up to 800 more children across the state to access care. To help support child care expansions, New Mexico is using temporary federal relief funds from the American Rescue Plan Act. In the future – and thanks to the work of many advocates – the state will rely on both the Early Childhood Trust Fund and the LGPF to support these policies long-term.
Build a supply of child care programs and facilities that match families’ preferences.
A strong and equitable child care system is made up of a rich tapestry of provider types so that no matter what arrangement families choose, they can find someone who meets their needs, is well-compensated, and has the supports needed to create a high quality environment for young children. States are investing in supply-building initiatives, with an emphasis on home-based providers.
In 2022, Oregon appropriated $22 million for increasing child care capacity and prioritized providers from marginalized communities and traditionally under-resourced parts of the system (e.g., tribal communities, culturally/linguistically-specific communities). The state also engaged Seeding Justice, a funder with experience in supporting projects driven by communities most impacted by injustice, to administer the fund.
Ensure equitable access among historically underserved populations.
Even before the pandemic, certain families were less likely to have access to child care, such as Latinx families, rural families, immigrant families, families with infants and toddlers or children with disabilities, and families with non-traditional work hours. The pandemic further reduced the care options available, and states are taking action to prioritize these families in their rebuilding efforts.
A number of states broadened subsidy eligibility to undocumented families, including Oregon, Washington State and Vermont. In 2023, New York allocated $5.4 million to implement a pilot program that would provide child care assistance to families below 400 percent of federal poverty level who have not been eligible for subsidies due to their immigration status.
New York3 and Oregon passed legislation to allow families to use subsidies to pay for child care during hours when parents are not working. By decoupling subsidies from the exact hours worked, these policies make it easier for parents who have variable work hours, who have long commutes, who are students, or who have to take leave from their jobs to access child care when they need it. It also moves away from the notion that child care is only a work support program.
Oregon and Kentucky passed policies to make all college students eligible for child care subsidies, regardless of whether they have a job. (Oregon’s legislation also extends to younger students.) In 2022, Rhode Island extended subsidy eligibility to low-income college students on a permanent basis.
