Vermont, like all states, has a unique early childhood policy landscape that is shaped by economics, demographics, political history, coalitions, and other factors that create a state-specific environment for policy advocacy.
State early childhood policy progress is dependent both on the state’s environment and the numerous efforts—by the organizations listed on this page, other organizations, parents, policymakers, practitioners, and more—who work both independently and collaboratively to achieve wins for young children.
Research shows that family economic security is foundational to children’s overall wellbeing. Research also shows that widespread disparities in opportunity (especially by race) drive wide disparities in outcomes. States with policies that offer strong support to young children and their families are more likely to see 1) declining numbers of children in low-income households and 2) low racial disparity among those children.
Young Children in Low-Income Households: Declining
Approximately 32 percent (16,000) of the state’s children 0-8 live in households below 200 percent of the Federal Poverty Level (2022). This number represents a decrease from 35 percent (19,000) in 2017.1
Racial Disparity Among Young Children Living in Low-Income Households: High
Black, Hispanic/Latino, and/or Native children aged 0-8 are significantly more likely to be living in households below 200 percent of the Federal Poverty Level than are Asian and non-Hispanic White children2, however, precise disaggregated data for race in such a small age cohort are not considered reliable for states with small populations, such as Vermont.
State General Fund Appropriations: Growing
Vermont’s governor signed the state’s budget for fiscal 2026 into law in May of 2025. Based on a Conference Committee report, the budget bill provides $9.1 billion in appropriations from all funds, including $2.46 billion in general funds, $2.43 billion in education funds, and $3.15 billion in federal funds. This represents a 4.1 percent increase in total spending from all funds, an 8.4 percent increase in general fund spending, a 5.2 percent increase in education fund spending, and a 0.8 percent decrease in federal fund spending, compared to fiscal 2025 enacted levels. General fund revenue in fiscal 2026 is estimated at $2.52 billion, including the January 2025 consensus revenue forecast and other general fund revenue sources as well as incorporating the cost of additional tax exemptions. The budget is also based on carryforward funds of $139 million, bringing total general fund resources to $2.66 billion.3
Largest Revenue Sources (after federal transfers):4
State Budget Rules:4
Permanent State Funding Stream Dedicated to Early Childhood: Yes
In 2023, Vermont passed the nation’s first payroll tax dedicated to child care. The 0.44 percent payroll tax (split between employers and employees) generates about $80 million annually to fund expanded eligibility for subsidized child care along with increased reimbursement rates and supports for the child care workforce.5
Political Alignment: Divided
During the legislative session, the state’s Senate and House were both Democrat controlled. The state’s Governor was a Republican.6
Types of Common Ballot Measures Available:7 One
Early Childhood Policy Advocacy Organizations Include:
Early Childhood Policy Advocacy Multi-State Initiatives Include:8
Highlights from the state’s early childhood policy advocacy community include:9
In 2023, the Vermont Legislature passed Act 76, Vermont’s historic child care law. Implementation of the new law began in the summer of 2023 and will continue for several years. Thanks to incredible advocacy from Vermonters throughout the state and a strong partnership with the Administration, implementation is going well, overall. In 2024, just as we began to see the positive impacts of Act 76 with more than 100 new child care programs, more than 1,000 spaces created, and more than 4,000 additional children receiving financial assistance to attend child care, Vermont’s governor proposed reducing base funding for the program once again. Despite a very difficult fiscal year with the looming threat of federal budget cuts, the Legislature chose to fully fund the components of Act 76 and to increase rates paid by the state to child care programs through the state’s child care tuition assistance program by 5 percent.
The budget that took effect on July 1, 2025 includes a 5-percent increase in reimbursement rates for programs serving infants and toddlers, which will help expand capacity where it’s needed most; language to help protect child care funding in future budget negotiations; the creation of a new child care reserve fund to provide more long-term stability to the system, even in difficult economic times; increased investment to grow a Early Childhood Youth Apprenticeship Program that provides the next generation of early childhood educators with on-the-job learning opportunities so they can graduate ready to enter the field; and funding that will help child care programs participate in the Child and Adult Care Food Program, which helps children access nutritious food while at their child care programs.
The Legislature passed S. 53, a bill that continues the multi-year process necessary to provide for Medicaid coverage for a new service. The bill has been signed by the Governor. It instructs the Office of Professional Regulation (OPR) to create the certification necessary for doulas who would like to access Medicaid funding, and the Department of Vermont Health Access to submit the necessary paperwork to federal regulators to include the services in the state’s Medicaid program. In Vermont, in 2021, there were 2,021 Medicaid births, about 38% of total births in the state.The state budget includes the modest funding necessary to support the Secretary of State’s office to undertake the work to establish certification for doulas.
The State increased the Vermont Child Tax Credit to apply to families with children age six and under, adding one year of eligibility beyond the previous age of five. Vermont has been a leader in state-level anti-poverty tax credits, but restrictions on who qualifies, as well as systemic barriers to access, leave out many Vermont families who would benefit from the credits. This expansion means that households making under $125,000 will receive $1,000 per eligible child age six and under.
The Alliance’s key allies in Vermont are Let’s Grow Kids (LGK) and Voices for Vermont’s Children (VVC). LGK is a statewide movement to secure affordable access to high-quality child care for all Vermonters by 2025. LGK partners with local communities to strengthen the existing early childhood education system and mobilizes Vermonters to demand policy change and increased public investment in high-quality child care. VVC conducts research and analysis on policy solutions to improve the lives of children and youth, and advocates for those changes in the legislature and beyond. Their efforts focus on addressing equity through systemic change rather than individual-level interventions.
Let’s Grow Kids and Voices for Vermont’s Children are working to advance early childhood policies in several areas that align with the Alliance’s birth-through-eight policy framework:
Child Care
Child Care Workforce
K-3rd Grade
Preschool and Pre-K
Child Health
Early Intervention (Age 0-3)
Family Economic Security
Paid Family and Medical Leave
Early Childhood Finance and Cost Modeling
Early Childhood Governance
Vermont became a national model with the passage of Act 76 in June 2023, which resulted in an annual commitment of about $125 million to the state’s child care system. The win—and a 2024 defense of the funding—was the result of a broad and strong constituency for child care cultivated over a decade by advocates.
NOTES:
1 Kids Count Data Center, Annie E. Casey Foundation, Children Ages 0 to 8 Below 200 Percent Poverty, January, 2024.
2 National Center for Children in Poverty, Children Ages 0 through 8 Below 200 Percent Poverty, October 2024, NCCP analysis of ACS 5-Year Estimates – Public Use Microdata Sample 2018-2022.
3 National Association of State Budget Officers, Proposed and Enacted Budgets, FY 2026.
4 Urban Institute, State Fiscal Briefs, April 2025.
5 Alliance for Early Success, State Examples of Dedicated Funding Streams, 2025
6 National Conference of State Legislatures, 2025 State & Legislative Partisan Composition, January 31, 2025.
7 Ballotpedia, Ballot Measures by State, Kids Count Data Center, 2025.
8 Alliance for Early Success, Multi-State Initiatives for Early Childhood Policy Advocacy, July, 2024.
9 Alliance for Early Success, State-Wide Advocacy Highlights Survey, April-October, 2025.
