Imagine operates as an Employee Stock Ownership Plan, or ESOP, giving staff the unique opportunity to become co-owners of the organization and participate in company decision-making. In a profession often marked by , minimal benefits and , the model stands out: Imagine is the only childcare program in the country that is 100% employee-owned through an ESOP, according to the National Center for Employee Ownership, a nonprofit organization supporting the ESOP community.

At first, when she became an employee owner, Zamorano thought, “whatever, I don’t own anything.” But once she participated in the company’s ESOP education programs to learn more about the benefit, she said, “I started to figure it out, and it feels great … like you’re the CEO of the place you’re at.”

Could this business model be part of the solution for some of the sector’s longstanding challenges that make it tough to retain staff? And as New York City explores pathways to recruit and retain the staff needed to expand childcare access with its , could Imagine’s approach offer inspiration?

Breaking down the ESOP model

An ESOP is a retirement plan that allows employees to build ownership in the company through shares granted over time. The longer an employee stays at the company, and the better the company does financially, the more workers earn. The value of the ESOP is realized when an employee leaves, retires or if the company is sold. 

“It feels nice to own something, especially nowadays when you can’t own anything,” said Zamorano, adding that the ESOP is a critical tool for her future, particularly because she believes “social security is not going to exist” by the time she retires.

According to Laura Tulchin, Imagine’s chief executive officer, the nearly 200 educators at the company get a salary that ranges from $37,000 to $90,000 depending on seniority and tenure and have ESOP accounts with balances that range from $1,484 to $167,000.

The center, which has operated since 2002, became partially employee-owned in 2018 and it transitioned to 100% employee ownership in 2026. Because Imagine is fully employee-owned, any gains go directly to employees instead of to outside shareholders. 

The ESOP model isn’t new: The . But it’s gained steam in recent years: Well-known companies like and are both ESOPs.

As of 2023, there were in the United States, with 15.1 million participating employees, according to the NCEO.

There’s evidence that the ESOP model has plenty of workforce benefits. According to research from the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University, companies that adopt an employee ownership model have when compared to non-employee-owned companies. More from the institute suggests that ESOP workers enjoy higher work autonomy, are more satisfied and feel less futility with their participation in workplace decision-making than non-ESOP workers.

That appears to be true at Imagine. “Whatever your position is here,” said Tijuana Jackson, a lead teacher, “because we’re an employee-owned company, you also have a voice in the direction of the company. That’s what I love.” 

“What I appreciate about Imagine is they trust my insight … I help with the school aesthetics, I helped develop the curriculum for the week of the young child,” Jackson said, noting that lead teachers are also given a credit card to make direct decisions on classroom supply purchases.

Jackson’s experience is what Imagine leadership was going for when they transitioned to the model. 

“Our hope is that we have a competitive advantage from a business sense, by centering our employees and being a more resilient, stable childcare company in an industry that is unstable,” said Tulchin.

To be a more stable business, Imagine hasn’t just worked to improve employee retention, but it has established a unique structure, which Tulchin describes as “multisite, not tiny and not a huge chain.” 

And that makes a difference when it comes to the program’s ability to leverage the ESOP model. The childcare sector includes a mix of for-profit and non-profit models, with center- and home-based programs that range from small operations to large organizations. 

Imagine’s size puts it in a unique spot, Tulchin said. “The culture is still the mom-and-pop personal feel with the benefits that come from a larger company, where we have a recruitment manager and finance person.”

Can this shared ownership model help attract and retain childcare workers?

As an ESOP, Imagine is in a better position than most to meet the demands of Mayor Zohran Mamdani’s initiative to increase access to childcare in New York City.

At the beginning of the year, the state and city of New York jointly announced the . The program is planned to roll out in phases with opening in the , 12,000 seats expected to be available in the fall of 2027, and by 2029, when the program is fully built out, advocates estimate that nearly 55,000 children will participate.

To create the spots the program promises, Lauren Melodia, director of fiscal and economic policy at the Center for NYC Affairs and one of the leading voices on the structural economics of child care in New York, said the city needs to address a core issue: retention challenges. 

Melodia, whose area of focus is explained that childcare programs face significant staffing challenges and are often “forced into a situation where they’re hiring temps, early career people, training people up, hoping that they’ll stay with them long-term, then they move on to higher wages in the public sector.” This creates a vicious cycle, she added. Centers invest in training staff only to lose them to better-paying K-12 positions.

Leaders at Imagine are working to disrupt this cycle. According to Imagine’s annual employee survey, 83% of staff report being satisfied with their jobs, and 81% of staff say they see themselves working at Imagine in two years. Despite employees’ high satisfaction rate, the business still competes with the public school system. 

Imagine gets its revenue from multiple sources, including a mix of private tuition, publicly funded child care subsidies and employer-sponsored child care agreements with government and university institutions. In a time of federal and state budget cuts and rising costs for families, childcare centers like Imagine are at the mercy of legislators and the economy, while public schools have less risk.

Even as an employee-owned childcare center with a diverse revenue model, Imagine isn’t immune to the challenges of running a childcare business.

The economics of childcare may prove challenging for ESOPs

The retention power of employee ownership lies in its promise of something wages alone don’t offer: wealth-building. 

“It lifts you up to know that you own something and you want to make sure that it grows bigger and bigger,” said Zamorano.

Owning a share of a profitable business can greatly increase a worker’s wealth and financial security, but owning a share of a struggling business that doesn’t have a reliable cash flow cannot. 

“The one factor that all successful employee-owned businesses have from their outset is that they are starting from a place of profitability,” said Tim Garbinsky, head of communications at NCEO. 

For Imagine to make good on the growth of employee ESOP account balances, the company has to remain profitable enough to have cash on hand to reinvest after covering its financial obligations. 

For many childcare centers, profitability remains a challenge. Melodia recognizes the business realities that could limit the expansion of childcare access. 

“Small business owners are always facing risk,” she said. “Any childcare center is going to have a hard time guaranteeing job quality and job security if they’re not able to charge what it actually costs to run these programs, which none of them are able to.”

New York City leaders are looking at ways to enable providers who contract with them to charge what it costs, said Emmy Liss, the executive director in the Mayor’s Office of Child Care and Early Childhood Education. “We have to take care of the people who provide this essential service.” 

Liss acknowledges that “folks who work in childcare programs face challenges when it comes to wages and benefits,” and that across the industry, teachers don’t make enough to “live and thrive,” and providers don’t have the resources to change the equation. It’s a problem that needs to be solved if care is going to be expanded across the city, and as more states like New York and New Mexico seek to provide residents with universal childcare. 

In a field rife with workforce challenges, notably low compensation and poor benefits, the ESOP model offers providers an approach to building their wealth over time. But the model’s promise as a solution to the sector’s longstanding retention challenges hinges on reliable revenue — and for most childcare programs, that requires systemic change.

For Tulchin, the economic challenges are hard to ignore. “It’s still a very low-paid industry,” she said, and while the goal of shared ownership is to do right by employees, the math is difficult when workers are “living paycheck to paycheck, and the value that you’re talking about is 40 years down the road.”

Nestling House typically operated with a dozen staff who served over 30 children from age 6 weeks to 12 years old. But the program had lost almost half of its staff and some families stopped sending their children. 

“We were operating in pods, there was less staff. The hours were less. Everything felt like less,” said Loryn Denny, the center’s executive director.

When the acute crisis had subsided and the center reopened, there were fewer children enrolled, but the leadership team decided to reduce rates to make the cost more affordable for remaining families, which resulted in lower revenue. 

Nestling House, like many other programs, was able to stay afloat with federal pandemic relief funding provided through the American Rescue Plan Act. In Wisconsin, the funds were distributed through , a program that sent monthly payments to the state’s providers. 

In addition to supporting the center’s operating costs, the additional funding allowed Nestling House to give its staff bonuses, buy new outdoor playground equipment and purchase a gently used school bus which they were able to use to shuttle kids to and from the center. 

When the ARPA funds originally dedicated to Child Care Counts , Wisconsin was able to stretch the funding and continue the payments . The state subsequently created , a temporary 12-month program that sends monthly stipends to providers based on enrollment and staffing, which will end on June 30. 

After about six years of receiving these monthly payments, the shift will be a stark change for Wisconsin providers and programs, including Nestling House, which receives close to $4,000 a month in bridge payments, split between its two locations, according to Denny. The leadership team doesn’t have an immediate plan for how to make up the shortfall other than charging families higher rates or paying providers even less, neither of which they want to do. 

Nestling House will lose close to $50,000 per year, Denny said. One way to close the gap would be to add three additional infants to the full-time program, which would bring in about $21,000 a year each, but the program is already at capacity, and they have been as creative as possible with ways to add space. 

“We aren’t going to make up the money,” said Jannelle Litos, the center’s enrollment and financial coordinator. “We haven’t given substantial raises, we have held off and then given two bonuses which felt good. It would be nice to pay more … and hire more qualified people.” Every year, she said, the team talks to a healthcare broker to see if Nestling House can afford to provide health insurance for employees, and every year they don’t have sufficient funds to do so.

“My fear is losing highly skilled staff because they can make more money and better benefits elsewhere,” said Betsy Guerrero, a director at one of Nestling House’s two locations. 

In 2025, the Institute for Research on Poverty at the University of Wisconsin-Madison and the Wisconsin Department of Children & Families published a highlighting findings from a survey that asked childcare providers about what would happen if the Child Care Counts Stabilization Payments Program expired.

that providers anticipated negative impacts for their childcare programs, including trouble with staffing, lower compensation, higher tuition payments for families and a decrease in their ability to provide high quality care. A quarter of the providers surveyed said they were likely to close. 

At Nestling House, leaders are concerned that many of their staff may leave. “You get what you pay for. … If I am continually having to replace a quality hire with an untrained person, I am spending more time managing adults than curating the program,” said Denny. “The focus in childcare should be on the children in our opinion.”

For Tamara Summerville, a home-based childcare provider in Milwaukee, the Child Care Counts payments have been core to her business model. She opened her program in December 2020, and began receiving the payments the following year. The monthly stipends allowed her to buy supplies, nutritional snacks and pay her staff more through bonuses. Even as her program’s enrollment fluctuated (as several children have changed residences through the state’s foster care system), the extra funds allowed her to consistently keep staff on hand. 

“I love kids. Especially in this community,” Summerville said. “I want to provide somewhere safe for them to be.” She estimates that she brings in about $800 a month through bridge payments. 

“Childcare is not promising. It makes enough money to be sustainable, sometimes,” said Summerville, but she explained that it’s not enough to make ends meet.

Wisconsin has benefitted from an historically large and there is “huge discussion about what the dollars will get used on,” said Sara Shaw, deputy research director at the Wisconsin Policy Forum. Shaw posits that the two main suspects for additional dollars would be increasing aid for K-12 schools and lowering property taxes, but an earlier deal and no plan emerged. “It’s not clear where childcare is falling on the list of priorities, but the possibility is there,” she said. 

Some that have gained attention in Wisconsin include expanding employer tax credits and and then directing some of the additional revenue toward early care and education.

Gov. Tony Evers is , so a new governor will be elected this fall. The change in leadership could impact where childcare falls in the list of state budget surplus priorities. But no immediate change is coming, so after June 30, providers will be left to figure out immediate stopgap solutions to stay open. 

“I don’t know if it’s possible to go back to things pre-COVID,” said Shaw. Childcare has gotten more attention on the national level, and the influx of public funding has been widely proven to have a positive impact. When that funding dries up, the state’s childcare providers — including Nestling House and Summerville — will be left to figure out how to balance their budgets and stay open. “What we hear is that in order to continue competing they will need to raise prices, which is pricing out families, or close,” she said. “We will have to see what actually happens.”

“What we want is that, if and when families need it, there’s childcare that’s available, that works for their needs, that’s affordable and high quality,” said Anne Hedgepeth, senior vice president of policy and research at Child Care Aware of America. “We’re seeing a lot of gaps in that promise right now.”

To get federal childcare funding, states have to put a minimum amount of their own money into the system as well. But of state funding for childcare and preschool in fiscal year 2026, conducted by Child Care Aware of America, found that seven states — Arkansas, Idaho, Missouri, Nevada, Rhode Island, West Virginia and Wyoming — don’t spend any money above that bare minimum. And a handful of states don’t spend more of their own money on preschool than what is strictly required: Arizona, Idaho, Montana, New Hampshire, South Dakota, Utah and Wyoming. Idaho and Wyoming find themselves on both lists, putting nothing extra into either system. 

The lack of additional investment has a lot of root causes, from political hesitance to the realities of state budgets, which must be balanced every year, Hedgepeth said. In part, she said, the problem stems from the end of federal funding from the American Rescue Plan Act, which infused billions of dollars into the system and allowed states to make but has since disappeared. Other constraints include a reduction in tax revenues and cuts to federal programs stemming from the Republicans’ One Big Beautiful Bill package that passed last year. 

No matter its source, the lack of funding creates “a frustration for parents and families and childcare providers on the ground,” Hedgepeth said. Without more state investment, legislatures are unable to improve the system by, for example, expanding their subsidy programs to reach more families — or even to serve all eligible ones — or reimbursing providers the amount it actually costs to care for children instead of at lower rates. That has led to over a dozen states recently instituting or expanding waiting lists for childcare subsidies, leaving parents to try to pay for care out of pocket. The waitlists hurt providers, too, if they can’t enroll new families, which can lead to closures of classrooms and even entire programs. “The whole system suffers,” Hedgepeth said. 

State spending disparities have also created an uneven national system that leaves parents better or worse off depending on where they live. The study analyzed total investments for each child under age 5 for 37 states and found that spending ranged from less than $500 per child under age 5 to more than $5,000 per child. Eleven states spend between $1,500 and $9,900 per child, with Washington, D.C. spending the most. 

“We do have really different experiences state-to-state, based in part, on what states are putting into their childcare and early learning systems,” Hedgepeth said. That creates frustration for families, especially those who move between states and have to navigate such different systems. But it hurts everyone. “It also really presents a challenge when we think about having an overarching goal when it comes to child development and support of our earliest learners,” she said. Children arrive at kindergarten with a variety of readiness levels depending on what was available to their families before then, she pointed out. That necessitates instituting “a more robust floor” so that there is a baseline across the whole country.

Hedgepeth sees a silver lining: In the states that are failing to spend more of their own funding, “there is room for these states to do more and maybe even an appetite.” Some of them signaled in their recent legislative sessions that they want to invest more, she said. of governors talked about childcare and early childhood education in their state of the state addresses this year. She also noted that, since the pandemic, all states are at least fully meeting the federal match requirement for childcare funding, even if many aren’t going above and beyond. There were some years before 2020, mostly in “extraordinary circumstances,” such as a recession or budgetary challenge, when some states did not even spend that much, she said.

Even so, some states are moving in the wrong direction. Child Care Aware of America found that six states — Florida, Kansas, Kentucky, North Carolina, New Hampshire and Rhode Island — decreased how much of their own money they spent on childcare and preschool in fiscal year 2026 compared to fiscal year 2025. West Virginia invested in childcare in fiscal year 2025 but then failed to do so in fiscal year 2026. 

According to from Child Care Aware of America, this lack of state spending has led to the first decline in the number of licensed childcare centers in several years. In the years directly after the height of the pandemic, between 2021 and 2023, childcare supply experienced “robust growth,” Hedgepeth said, after states made investments that “paid off in terms of making it possible for childcare programs to open.” But between 2024 and 2025, the number of licensed centers declined by 1%. 

Hedgepeth cautioned that the data is messy and the drop is “very, very small.” Still, she said, “It is very clear to us that we are not moving in the direction we need to be moving.” of American children already live in childcare deserts, according to a report from the Center for America Progress. In states that aren’t spending enough for providers to be able to open and operate with some semblance of financial stability, “the supply trend is going to continue in the wrong direction,” she said. 

This is especially concerning given that state budgets are about to enter a particularly rough patch. The One Big Beautiful Bill Act enacted the to the Supplemental Nutrition Assistance Program and Medicaid in history, cuts that state budgets have to absorb. The possibility that states will feel forced to further pull back from childcare and early childhood education funding in order to cover for some of those reductions is “very much on the horizon,” Hedgepeth said. While some states started to worry about the problem in their most recent sessions, next year’s legislative sessions are where the cuts are likely to really hit home, she said. “We’re looking at a tough several years.” 

Congress can act by increasing funding for childcare programs, something it has with . “It’s very clear that the gap is there and it needs to be closed,” Hedgepeth said. “We have a very direct call to action here, which is, ‘Let’s make investments to make sure we grow the supply for childcare.’ ”

The law’s passage followed nearly two decades of groundwork and an eight-year advocacy campaign led by Let’s Grow Kids, a local organization focused on building broad public and political support for childcare reform. The mission? To achieve high-quality, affordable childcare for the whole state. 

A from New America chronicles the years of advocacy and organizing that paved the way for Vermont to pass Act 76, including the incremental legislative strategy that developed bipartisan support; efforts to build a coalition of stakeholders; and the strategic pivots and political organizing that were instrumental in passing the law. By recounting Vermont’s roadmap, the report’s author, Rebecca Gale, who has been covering childcare in the state for years, shares lessons learned to highlight what’s possible when it comes to state-led childcare reform. 

Here’s a look back at Gale’s reporting on some of the key actions and policy changes that have led to progress in Vermont.

While childcare has gained visibility in political campaigns, it’s more often a secondary issue, rather than a key priority for candidates. That may be starting to change. In April, Aly Richards, who led Let’s Grow Kids for nearly a decade, announced her bid for governor. In an interview with Gale, Richards discussed why the governor’s office might be the best next step for someone who knows how central quality childcare is for families — and states — to thrive.

Let’s Grow Kids, a nonprofit organization formed in 2015 to improve Vermont’s childcare infrastructure, sunset its operations in October 2025. According to its CEO, it was always intended to be dismantled after a decade, and the sunset strategy was critical to its success in spurring change. Here’s an inside look at how the organization’s efforts drove progress that led the state to make childcare more accessible and affordable, and why the time-sensitive nature of Let’s Grow Kids was key to its success.

Act 76, a law which passed in Vermont in 2023, has been a game changer for many of the state’s childcare providers, offering a notable financial boost. For some, it’s doubled their income. The law, which was designed to increase access to high-quality childcare for families and to support the state’s early care and education workforce, has had a number of successes in its first year of implementation. Here’s a look at how family childcare providers in the state have been impacted.

In June 2023, Vermont’s legislature overrode Republican Gov. Phil Scott’s veto to approve a number of state-wide priorities, including $125 million to shore up its childcare infrastructure. The state’s successful effort followed more than a decade of advocacy and grassroots organizing focused on strengthening its childcare system. The law, , expanded childcare subsidies to reach more families and increased wages for providers. Supporters view Vermont’s approach as a national model for expanding affordable, accessible child care and strengthening the workforce.

In June 2023, Vermont’s Republican Gov. Phil Scott vetoed a bill to strengthen the state’s childcare system, but even after the governor’s veto, the state legislature had sufficient support to consider an override. Richards, CEO of Let’s Grow Kids, said the decision to veto could be traced back to a campaign promise not to raise taxes. Without the payroll tax increase, the program could not afford to pay providers more. “The Governor agrees childcare is essential but won’t raise taxes. Those two things cannot live together. The solution is public investment. We know this is hard work. That is why we have a bipartisan movement. We are making hard choices together, but we are doing so responsibly,” Richard said.

As the COVID-19 pandemic wreaked havoc across the globe, many states across the U.S. were navigating childcare setbacks. But in May 2021, after years of advocacy and organizing around strengthening childcare, Vermont passed , key legislation to reform childcare in the state. Despite the groundswell of political will for the program, Vermont still faces major funding hurdles. Gale offers a look into the state’s progress and challenges.

Effective July 13, the Administration for Children and Families will several Biden-era that sought to create more predictable, reliable payments to childcare providers. These include paying providers based on a child’s enrollment, rather than their attendance, which protects them against financial losses from unplanned events such as illness and family travel, as well as making subsidy payments in advance, rather than reimbursing providers the following month.

Both practices help to stabilize the industry by giving programs consistent revenue that allow them to plan and budget month over month, providers and experts said. 

Although the requirements will be rescinded, states will still have the option to pay based on enrollment and in advance of services — just as families who pay privately for child care have long done. There is nothing in the new rules to prevent states from continuing or starting those payment practices, noted Helene Stebbins, executive director of the Alliance for Early Success, a nonprofit that supports early childhood advocates across the 50 states. 

“It doesn’t require it, but it doesn’t prevent it from happening,” she said. “You can 100% still do it.”

But without the requirement, it’s likely that some states will reverse course. Already, three states — , Ohio and — have paused efforts to implement or extend enrollment-based pay, noted Daniel Hains, chief policy and professional advancement officer at the National Association for the Education of Young Children. 

“It’s one of those things that, absent that requirement, and given the fiscal situation states are in, states are not going to prioritize these changes if they’re not required to,” said Hains, “and that’s going to have a negative impact on providers and, ultimately, families.”

Currently, about now pay providers based on enrollment, according to an analysis from the First Five Years Fund that was published in March, while the other half still pay based on attendance. At least 10 states are paying providers up front for childcare subsidies, rather than in arrears, according to policy tracking from NAEYC. 

The particulars of how and when a provider gets paid can seem like a technicality, but to an early care and education program operator, that may be the difference between financial solvency and ruin. 

The administration first announced these proposed rule changes in early January, before opening up the issue to public comments. NAEYC included more than a dozen provider voices in its to the U.S. Department of Health and Human Services, which oversees ACF.

A program director in Louisiana explained why the Biden-era policies help to keep her in business.

“During cold and flu season, if childcare providers were only paid based on attendance rather than enrollment, many of us simply would not survive the winter,” the director wrote. “Most of our families have multiple children, and when one child gets sick, it often spreads through the entire household. Enrollment-based pay is the only model that reflects the real cost of maintaining stable staffing, ratios, and operations.”

A program director in Kansas wrote, “Childcare is a tough job. Providers don’t need any additional obstacles. … Having to wait for reimbursement for a month or more can have a significant impact on a provider’s financial well-being in their program.”

And a director in Maine pointed out that a child whose spot is funded by subsidies should not be treated any differently than one from a family who is paying private tuition. “We cannot predict attendance,” she wrote. 

The Maine director’s point is one that motivated the Biden administration’s 2024 rules, Hains said. The in 1990 establishing the Child Care and Development Block Grant, which authorizes the CCDF, sought to have states’ subsidy payment practices “reflect generally accepted payment practices of childcare providers” who receive payments privately from families, to maximize choices among low-income families seeking care, Hains explained. The Biden rules to get states back in compliance with that original intent. 

Stebbins, of the Alliance for Early Success, said she couldn’t think of a single other industry that operates in the way that early care and education does. 

“It’s Business 101,” she said. “I paid for two kids in childcare. I always paid in advance. I paid if they were sick or we went on vacation. Why is this such a big leap?”

Now that this issue is being returned to the states, she said, it’s on policy advocates and the early childhood community to help make the case to state leaders why enrollment-based pay and prospective pay are so essential. 

“It’s good for the field … because it creates a stable, predictable source of income, and it is aligned with how private pay works in the industry,” Stebbins explained, laying out the argument. “It treats kids who are on subsidy — low-income children — just like everybody else.” 

Those outcomes, she added, have ripple effects across communities and entire states. 

“A stable industry is good for the kids and the programs. There’s less turnover and uncertainty about income,” she said. “It’s good for the state economy because it allows parents to work.”

On the other hand, attendance-based payments may disincentivize programs from accepting families who pay with subsidies altogether, said Casey Peeks, senior director for early childhood policy at the Center for American Progress, a left-leaning think tank. 

The enrollment-based pay and prospective pay are only two of the “four critical levers to improving the sector” that the Trump administration is rolling back, Peeks said. The third is the use of grants and contracts to provide direct childcare services, which allow states to enter into agreements with providers to reserve slots for certain populations of children. The reversal of that practice may mean that some families, particularly those with infants and children with disabilities, could have more trouble finding slots for their child. And the final lever is capping the maximum amount a family can pay out-of-pocket for childcare, which the Biden-era rule set to 7% of household income, based on federal affordability standards. 

The co-pay limit isn’t perfect, Peeks acknowledged, but “it gives this peace of mind to know how much you’re going to pay,” she said. 

In Ohio, one of the that has not yet capped co-pays at 7%, the limit is 27% of income, which can be crushing for some families. 

“I think knowing how much of a burden this [childcare] expense is — it rivals mortgage payments and rent payments — to take away a lever that exists for affordability and offer no alternatives puts families who are already struggling in a really difficult spot,” Peeks said.

When she recently separated from her partner, it became critical that she get a job. She was hired for a position with a nonprofit last summer, and shortly after that, she went online and applied to get a subsidy so she could afford child care for her three children, ages 2, 4 and 8 years old.

Two months went by before she got a response, she said, only to be told that she had been put on a waitlist. It gave her “a moment of panic,” she recalled. “I need my bills to be paid but I also need somebody to watch my children.” There was no way she could afford the out-of-pocket cost of child care on her pay. It costs a year, on average, for center-based care for a toddler in Virginia.

A growing number of parents have been confronted recently with a situation similar to Moyer’s. Strapped for child care funding, have started waitlists for child care subsidies — or lengthened existing ones — putting new applicants in limbo when they need immediate help paying for care. Virginia is one of 14 states that have recently instituted or expanded waitlists, according to Child Care Aware of America. 

Moyer ended up asking neighbors and friends to watch her children, “people that I normally wouldn’t have asked to watch my kids,” she said. She installed some cameras in her house to make herself feel more secure. But “I wasn’t as comfortable as I would have been had they been in a licensed, insured day care,” she noted, adding that she had to work around the schedules of the people who agreed to watch her children, even though she wasn’t able to control her own schedule at work. There were some days when the person she had arranged to watch her kids canceled at the last minute, sending her scrambling to find someone else.

“It was very, very emotionally stressful, because I had never been away from my kids up until this moment and suddenly I’m leaving them at home with other people,” she recalled.

Moyer had to wait four months to get off Virginia’s waitlist, she said. Then, when she was finally taken off, she had to fill out all the paperwork again, which required getting documents from her employer and finding a child care center that she could enroll her children in. It took her another two weeks before she was actually getting help, she said. 

Waiting lists for child care subsidies are not new. “It has been true for a long time that there are not enough resources to provide subsidies to every eligible family,” said Anne Hedgepeth, senior vice president of policy & research at Child Care Aware of America. “We’re not meeting families’ needs with our current subsidy system.” In 2021, were eligible for subsidies under state rules, but just 1.8 million received them, or less than a quarter of those who qualified. 

But the child care sector has, in the past five years, received more funding that it typically does. It received in federal COVID relief funding meant to prop the sector up, which some states to eliminate waitlists, among other changes. The Child Care and Development Block Grant, which mostly funds state subsidies, received a increase in funding in 2023 and then another increase in 2024. Some states, for their part, also devoted some of their own dollars to the sector.

Now with the billions in COVID relief funding gone, and with big state budget cuts looming due to to Medicaid and other safety net programs passed by Republicans in Congress, many states have searched for ways to reduce spending. Waiting lists have become a common tool. States are “not able to serve all eligible families, and they’re having to do things like institute waitlists that limit families who are coming in,” Hedgepeth said. 

Arizona, Arkansas, Colorado, Indiana, Maryland, Mississippi, North Dakota, New Jersey, New York, Oregon, South Carolina, Texas and Virginia have recently started putting at least some parents on waiting lists for child care subsidies or have significantly expanded the number of parents on their lists, according to Child Care Aware of America. Missouri also   a waitlist starting March 1. 

The number of states with waitlists has nearly doubled since early 2022, according to Child Care Aware of America. “Many on this list did not have waitlists when there were additional dollars available,” Hedgepeth said, and “were able to serve all of the families that were applying.”

This situation “does tell us that the funding amount that was flowing to states during the pandemic was an amount that better reflected the total need in the system,” Hedgepeth said. The increase in states using waitlists as an approach to cut costs is bad on its own, but it’s also a canary in the coal mine, she said, signaling deeper troubles in the child care system.

“A single state may not be able to replace federal funding,” she noted, but if it’s only spending the bare minimum without dedicating general funds “that’s a real opportunity for state policymakers.” , for example, has instituted waitlists without investing any additional funding for the sector. 

For parents like Moyer, the impact of state waitlists can be devastating, Hedgepeth said. Many families don’t bother to go through the steps to get a subsidy or might not even know that they’re eligible in the first place. For those who actually fill out the paperwork and submit it, “which is often no easy task,” she said, finding out that they won’t get any help for a number of months or, possibly, indefinitely “can be really disheartening.” Parents likely face impossible choices about how to make sure their children are cared for while they work. “This is not something they have time to wait for,” she said. “They need care today for their kids.” That’s especially true for mothers, as women’s labor force participation has , and many parents child care problems are keeping them from work. 

Providers, meanwhile, often suffer as well. In Indiana, for instance, the freeze in new subsidies left some providers who were counting on enrolling new infants with empty infant classrooms. The freeze, along with deep reimbursement cuts, has put them in a difficult financial position. “Your highest rates of pay comes from your infants,” Dionne Miller, who runs Room to Bloom Learning Academy in Indianapolis, previously told 91ɬ��. “We no longer have that stream of income coming in.” More than 100 providers closed last September and October after the state’s changes were put in place.

On top of the expiration of federal pandemic relief funds, ongoing federal funding has become increasingly unstable. In December, the Trump administration announced that, after resurfacing fraud allegations in Minnesota’s child care and other public programs, it was freezing all child care funding to the state and reinstituting a Defend the Spend requirement for the Child Care Development Fund, which provides key funding for state subsidies across the country. With the change, all states now have to provide justification, including receipts and photo evidence, in order to draw down the money that was already appropriated by Congress. 

The administration also sought to completely freeze CCDF and other federal funding to five states, although that action has been by a judge. And the administration rescinded Biden-era rules that paid child care providers in a more stable way. 

Given all of this, Hedgepeth said, “I would not be surprised to see more states institute waitlists.” 

“We are in some ways back to the pre-pandemic conversation of the way in which child care and early learning are situated in our priorities,” she added. It’s “not receiving the full support that it needs despite what we know about its critical importance to families and economies.”

McNally, a Democratic state representative who lives in west Youngstown, Ohio, relies on her neighbors — who include nurses, police officers and public utility workers — as her North Star for how families are doing. These are people, she describes as having “job titles where they should be able to sustain a family and a household, but aren’t even coming close.” She hears how they are struggling to pay bills, how they can’t afford back-to-school supplies for their kids, or how long they will wait to turn the air conditioners on at their houses in the summer. 

that  most families spent their expanded 2021 child tax credit for everyday necessities: groceries, utilities, housing and clothing — the very same things she, her husband and neighbors were doing. The extra payment, between $3,000 and $3,600 annually per child — or a monthly check between $250 and $300 — brought the child poverty rate to a record low of 5.2%, . also shows that the funds dramatically improved overall well-being for families, many of whom were able to use the money to pay down bills or give a bit of breathing room to their finances. supports its bipartisan appeal. 

After the federal tax credit expired at the end of 2021, McNally introduced the in 2023, a measure she has since re-introduced in each session of the Ohio General Assembly since. A version of her proposal even made it into , before being overridden by the Republican’s veto-proof majority in the statehouse. 

McNally wasn’t the only lawmaker to view the child tax credit as a vehicle for families with young children to improve outcomes — and Ohio wasn’t the only state to take that approach. Altogether, 22 states and D.C. have created , though only child tax credits will be active in 2026. 

“States were curious about how to fill the gaps left behind,” said Ryan Vinh, a research analyst at the Center on Poverty and Social Policy at Columbia University, who has studied the impact of the child tax credit.

by the Columbia center found that the state-level child tax credits helped mitigate the loss of the expanded federal credit. And the center’s forthcoming research, Vinh said, shows that the states that have expanded their child tax credits are seeing similar effects with bringing people out of poverty, but not to the extent the federal government’s impact was, largely because states are not able to offer the full amount of $3,000 to $3,600 per child. 

In July 2025, the federal , from $2,000 to $2,200 per child, although the new version limited the ability to receive a refund and created new eligibility criteria so that some families who were previously able to access the credit no longer could. Refundability is particularly crucial for the families in poverty, as it requires a family to make enough income to have a sufficiently high tax burden, rather than being able to access the funding outright. 

The ability to zero-in on child poverty is incredibly effective for state lawmakers who see this as an issue to address, and it’s drawing the attention of other states who are seeing the impact.

“It’s a domino effect,” said Neva Butkus, a senior analyst who leads the state child tax credit work for the Institute on Taxation and Economic Policy. States and localities seeking to add or expand a child tax credit work with her team to come up with what they want to solve for — in some cases it may be reducing the number of families in poverty, or it might be creating a smaller tax credit that more families can access, improving overall affordability. 

Butkus observed that there are clusters of states that tend to follow one another, such as those based on geography, and that conversations surrounding the child tax credit (CTC) among state lawmakers transcend political affiliation. She points to the CTC that McNally and DeWine pushed for and one that as examples of forward momentum in red and purple states. “We are seeing it become more commonplace, and lawmakers across the aisle are seeing the value in the credits, as affordability becomes more of a focus.”

The CTC is “both an affordability and anti-poverty mechanism,” Butkus said. “Lawmakers understand the rising costs associated with raising children. With recent years, lawmakers and advocacy groups come to us with poverty alleviation really as a focus,” she said. But addressing refundability tends to be one of the differences along party lines, she noted, as some legislators view fully refundable tax credits to be an anti-work incentive.

Vinh points out that there is not strong evidence that the fully refundable child tax credit negatively impacted workforce participation, and on the 2021 expanded tax credit found a “muted” impact on employment.

But there are limits to what states can do to address poverty. They are required to balance their budgets and cannot run a deficit — unlike the federal government — and cannot do deficit financing. “With the upcoming changes to Medicaid and SNAP, states have to take on additional cost sharing,” Vinh said. “To the extent that states have to find money in their budget, these kinds of gaps at the federal level create some concern about being able to fund more ambitious tax credit policies.” 

States that do opt for a generous child tax credit may see its impact relatively quickly. Butkus cites Minnesota as an example, explaining that in 2023, the state legislature used a budget surplus to  implement a child tax credit of $1,750 per child; in 2024 this was offered as an , a similar model to the checks in the mail that families received in 2021. from the Columbia center cite that this change will cut child poverty by one-third.

In neighboring Iowa, though, the legislature opted for a described as “a total windfall to the state’s of households.”

Ohio, too, opted to go in a different direction, despite having a Republican governor who championed the proposed child tax credit. In 2025, the child tax credit was nixed, but the state for the Cleveland Browns to build a new stadium. The state also switched to a , which, like Iowa’s changes, lowered taxes for the wealthiest residents..

McNally plans to keep pushing for the expanded child tax credit in Ohio, though she is aware that the outcome of the 2026 governor election will likely foretell whether she can gain momentum. Part of what she wants to do is continue selling it to families, who tend to tune out conversations about taxes. 

“Taxes are complicated, dry and dull,” she said. “But when I say ‘remember when you got the check in the mail, once a month from the federal government? You want to do that again?’ They said ‘oh that is awesome.’ They just want to get that money in the mail so they can buy groceries. They don’t care what is happening behind the scenes to get that.”

The evidence for underenrollment is myriad, with data points coming in from a range of sources. For instance, KinderCare, the nation’s largest private child care provider, stated on a that enrollment was down around 2% year-over-year. The Bank of America Institute, an economic think tank that provides insights from the bank’s data, in October 2025 that, among its customers, the share of households with more than one source of income making child care payments had dropped to slightly under 35.5%. That figure is down nearly 2% since 2021, with a more prominent decrease among low-income households. These findings suggest that fewer families are utilizing licensed child care programs, which may result in open slots. 

While these percentages aren’t massive, they are meaningful when applied across the board to the . These data also track with as they wrestle with high costs of living and declines in flexible work-from-home options. 

Child care programs are reporting the phenomenon as well. Over half of child care program administrators in early 2025 by the National Association for the Education of Young Children (NAEYC) said they have fewer children enrolled than they would like.

Importantly, the sector’s declining enrollment doesn’t appear to be driven by some sudden drop of interest in licensed care among families, nor by declining birth rates as some nations are experiencing (there isn’t evidence that this is a significant factor in the U.S. yet. 

Instead, households are grappling with a lack of ability to afford their preferred care arrangement. Among underenrolled programs in the NAEYC survey, the top reason (given by 41% of respondents) was parents’ inability to afford a slot. A recent survey of New York City parents from Columbia’s Center on Poverty and Social Policy that 16% of respondents had cut back on child care hours or stopped using child care altogether due to cost; the number rose to 34% among single moms. (Other parents reported switching to what they considered “inadequate” care as a result of costs.)

Rising costs aren’t the only reason for underenrollment: A fierce scarcity of early educators is leaving many classrooms dark. In the NAEYC survey, the second and third most cited reasons for underenrollment related to not having — or being able to retain — enough staff. A recent by the Wisconsin Early Childhood Association (WECA) illustrates how this plays out in practice. The analysis found that in Wisconsin, most center-based programs are operating at around 75% of their licensed capacity, leaving over 33,000 seats unfilled — and filling those seats would require an estimated 4,000 educators. Low compensation is a primary driver behind these staffing shortages. The WECA analysis also revealed that one-quarter of the state’s early childhood workforce left the field permanently in 2024. That’s a crippling level of annual turnover, to say nothing of the negative impacts on children . And when programs have to pay their monthly bills with fewer paying families, they may be forced to raise rates, ending up in a vicious cycle that can lead to closure. 

The link between poor pay for early educators, staff shortages and underenrollment is not unique to Wisconsin. In 2024, a group of researchers led by the University of Virginia’s Daphna Bassok, the latest in a series of workforce studies on Louisiana, a state with a particularly strong early childhood data system. Bassok’s team looked at programs accepting public subsidy dollars that did or did not utilize pandemic-era grants to boost wages. Among programs with lead teacher pay of $8.50 an hour, 40% had at least one-quarter of their staffing positions vacant, over half had to close classrooms and 70% had to turn families away. Programs with better, but still low, pay of $15 an hour (about $31,000 a year) had reduced rates of vacancies, but 47% still closed classrooms and 59% still had to turn families away.

Underenrollment, then, is a multifaceted problem that calls for multifaceted response. 

For one, the trend adds more urgency to lower parent fees via direct public funding. The more states can follow the lead of exemplars like Vermont, New Mexico and in expanding who is eligible for free or low-cost care, the better. Underenrollment is also a symptom of how much families are struggling right now overall, suggesting the need to put more money in their pockets via mechanisms like expanded and refundable child tax credits.  

On the program side, getting money into providers’ hands so they can should be a priority. Here, states would do well to look at precedents like Massachusetts’ Commonwealth Cares for Children (C3) grants, which provide monthly checks to over of the state’s licensed programs, and Washington’s which raises early educator pay through wage supplements by while moving them toward parity with elementary school teachers. While there is certainly reason to continue building out new supply in geographic areas that need it, a major priority in the present moment should be maximizing the system’s existing capacity.

Policy tends to move along lines of “path dependence” — the concept that we do what we’ve done because that’s what we’ve been doing — and it can be difficult to unlearn old narratives or change course even when there is a promising alternative. 

There are now two simultaneous truths about American child care: Families struggle to find child care, often facing long waitlists, while many child care centers sit partially empty. The slots aren’t vacant because families don’t need care. They’re vacant because families can’t afford care — and because providers lack the staff required to operate at full capacity. Policymakers need to adjust their strategies and solve for both problems at once. 

The good news is that there is a solution that addresses each challenge in turn: making child care a right backed up by strong, permanent public funding. While the child care story has evolved, the answer has never been clearer.

Constitutions are powerful, both practically and symbolically. After the Civil War, as Congress was debating what defeated Confederate states must do to rejoin the Union, a surprising requirement rose to the top. When Southern states rewrote their constitutions, they were expected to include voting rights — but also . Some years later, in 1881, then-President James Garfield inveighed on the importance of these rights . “The voters of the Union, who make and unmake constitutions, and upon whose will hang the destinies of our governments, can transmit their supreme authority to no successors save the coming generation of voters, who are the sole heirs of sovereign power,” he said. “If that generation comes to its inheritance blinded by ignorance and corrupted by vice, the fall of the Republic will be certain and remediless.” Garfield concluded that, “For the North and South alike there is but one remedy. All the constitutional power of the nation and of the States and all the volunteer forces of the people should be surrendered to meet this danger by the savory influence of universal education.”

By universal education, of course, Garfield was largely excluding the early years — but we now understand how inextricable early childhood experiences are from any desired child outcomes. While more states are moving in the direction of dedicated funding sources for child care (and in 2022, New Mexico even passed a constitutional amendment that committed funding to early education), none have yet tapped the ultimate forcing function: passing a constitutional amendment establishing a right to child care.

In practice, a constitutional right to child care would likely mean that every child in the state would be entitled to — and guaranteed access to — a child care slot. There would be protections in place to ensure that right. For example, every state has a , so if a resident’s local public school district refuses to enroll a child, or tries to charge a fee for enrollment, a parent or guardian can take the district to court — and will likely win. It’s important to note that a hypothetical right to child care does not necessarily mean child care services must be government run, merely government funded; an amendment could be written in a way that maintains a mixed-delivery system including a variety of center- and home-based settings.

There are only a few instances in which early childhood has been addressed by state constitutions, and most of them focus solely on pre-K rather than a comprehensive child care system. Still, they’re notable. The most clear-cut example comes from Florida. As Aaron Loewenberg of the think tank New America explained , “In November 2002, Florida voters voted by a 59 to 41 percent margin to approve a constitutional amendment making their state the first in the nation to grant four-year-olds a state constitutional right to pre-K. The Florida Constitution that, ‘Every four-year old child in Florida shall be provided by the State a high quality pre-kindergarten learning opportunity in the form of an early childhood development and education program which shall be voluntary, high quality, free, and delivered according to professionally accepted standards.’” 

In New Jersey, meanwhile, a decades-long legal battle known as — though not resulting in a right to child care — ended with courts requiring the state to make major pre-K investments in low-income counties as a matter of educational equity. And New Mexico’s 2022 involved dedicating a portion of the state’s Land Grant Permanent Fund to early childhood education. While it was a major win for the state, there’s an important distinction to make: the amendment created a stable funding pathway that powered the 2025 policy which expanded free child care eligibility, but did not establish a right to child care because the state legislature isn’t obligated to fully fund the system or guarantee a slot. 

It’s also important to recognize that establishing a constitutional right to child care doesn’t guarantee that the service is high-quality or that service providers are well compensated. There have been long-running battles in states from to where the courts tell the legislature they need to put more money into the state’s public education system, and the legislature pushes back or refuses. Similarly, Florida’s pre-K amendment has had a rocky translation into practice: as Loewenberg notes, Florida’s program “has fallen short of the lofty goals announced upon the amendment’s passage. The good news is that sixty-eight percent of the state’s four-year-olds were enrolled … during the 2021-2022 school year, making Florida second in the nation when it comes to pre-K access for four-year-olds. However, the state only spends about $2,200 per child, making Florida 43rd out of 46 states when it comes to per pupil pre-K spending,” leading to many quality concerns. Often, the state only covers three to four hours of pre-K per day. 

Still, constitutionally-protected services present a stark contrast to America’s largely pay-to-play child care system in terms of access and cost. A constitutional right is also extraordinarily difficult to remove once enshrined, and when a state establishes this kind of entitlement, it conveys a sense of values that can shape how society perceives an issue. It is perhaps unsurprising that many of the European nations with strong child care infrastructures, from Finland to Germany, have crafted their systems within . Thus, the very debate over whether child care should be a constitutional right could in and of itself help reshape public opinion.

Realistically, amending state constitutions . In many states, the process is arduous and requires action by state legislatures that may be reluctant to obligate themselves to fund a new entitlement. That said, child care champions would do well to consider state constitutional amendments as a long-term strategy. If child care undergirds strong children, strong families and strong communities, then it would call on a great American tradition to assert the need for constitutional authority enshrining the savory influence of universal child care.

For years, Minnesota has been investigating the fraudulent use of state and federal dollars in child care and other social services programs, which and have led to prosecutions. But the allegations have now by the Trump administration and have drawn more attention after a viral video from a right-wing influencer who claimed, without evidence, to have found federally funded child care centers without children in them.

What exactly the Trump administration is changing is not yet completely clear. In a on Dec. 30, 2025 to the social platform X, Department of Health and Human Services Deputy Secretary Jim O’Neill wrote, “We have frozen all child care payments to the state of Minnesota” and in a video that the agency had “activated our Defend the Spend system for all ACF [Administration for Children and Families] child care payments across America,” and that it will “require a justification, receipt or photo evidence before we make a payment.”

Days later, the administration that it is also freezing access to funding for the Child Care Development Fund (CCDF), a key source of federal funding for child care subsidies, as well as Temporary Assistance for Needy Families (TANF) and Social Services Block Grant money in five states — California, Colorado, Illinois, Minnesota and New York — and Biden-era rules that urged states to pay child care providers more similarly to how parents pay out of pocket. On Jan. 8, the five states against the move, saying the administration failed to adequately justify it, and on Jan. 9, a temporary restraining order blocking implementation of the freeze by the U.S. District Court for the Southern District of New York.

In response to a request for comment and clarification about the Defend the Spend changes to CCDF from 91ɬ��, HHS spokesperson Emily Hillard wrote in an email, “The onus is on the state to provide additional verification, and until they do so, HHS will not allow the state to draw down their matching funds for the CCDF program.” The matching funds Hillard mentioned represent all remaining funds that Congress appropriated after states get their mandatory tranches, but sent last week to state agencies about the new requirements makes no mention of the additional verification applying only to matching funds, nor does it mention requiring receipts and photographs. Hillard said the additional justification required from states will not be as extensive as what it’s requiring from the Minnesota centers it suspects of committing fraud. She did not respond to additional clarifying questions.

This is not the first time the Trump administration has imposed extra justifications on child care funding, but it could be a much heavier burden than it was before. In early 2025, Elon Musk’s Department of Government Efficiency (DOGE) effort imposed what it called “Defend the Spend” on both CCDF and . In April 2025, state agencies that disperse CCDF funds to child care providers were told they had to provide “justification,” including “a description of the award and what you plan to do with the funds,” through a website when requesting the grant money that Congress had already appropriated for the program. At the time, it led to delays in the funding flowing to states, and in at least one state the delay caused providers to lay off staff or pay staff late.

But Ruth Friedman, senior fellow at The Century Foundation who served as director of the Office of Child Care at ACF under former President Joe Biden, said that requiring receipts and photographs is much more than what states had to share in the spring. “It’s super concerning,” she said, because these appear to be materials “that states are not currently required to necessarily have on hand.” If that’s the case, and the new process “requires new burdensome mandates to states,” she said, “that will lead to significant delays in payments.” 

That would mean many child care programs could go without being reimbursed for services they’ve already provided, potentially leaving them unable to pay rent or make payroll. Friedman said she is aware of states that have already experienced delays in getting funds due to the new Defend the Spend requirements. “It’s an attack on families and it’s an attack on child care,” Friedman said.

It’s also redundant, as Friedman laid out. There are a number of systems in place to detect fraud and vet spending in the CCDF system. States have to conduct annual audits of child care providers, she said, and they have to submit quarterly financial reports to HHS as well as improper payment reports every three years. Every three years, states also have to submit lengthy plans to the federal government laying out how they will follow its rules, which are reviewed by HHS before states can get any money. States with high levels of improper payments are put on a payment plan and subjected to more careful monitoring. States are also required to have systems to detect and investigate fraud, and to impose sanctions whenever it’s found. The national improper payment rate — which could include fraud as well as mistakes like underpaying providers — for CCDF was in 2023.

In May 2025, the Defend the Spend requirement ended for CCDF, but it has stayed in place for Head Start programs. When a Head Start program administrator goes into the payment management system to draw down the money their program has already been awarded, requiring that they justify the money, although they haven’t had to submit receipts or photographs. 

Previously, dollars would typically show up in a Head Start program’s account 24 hours after the request was submitted. But with Defend the Spend in place, there have been reports of delays, said Katie Hamm, who served as deputy assistant secretary for early childhood development at ACF under Biden. “One thing that has been consistent is that every month there’s a couple of programs for whom it takes two weeks, and that really puts programs in a bind,” Hamm said.

Programs can’t hold onto the money for more than three days and must make requests for funds they need to use immediately, so any delays are difficult to absorb. Some have had to start shutdown procedures, alerting staff and parents that they might have to close imminently, Hamm said, although she didn’t know of any that have actually had to shut down. The extra steps, and the delays they have caused, come despite the fact that programs’ budgets must be approved before they receive the grants in the first place, and are audited annually.

On top of reinstituting Defend the Spend for CCDF and freezing child care payments to Minnesota, the Trump administration planned to freeze key federal funding for child care and family assistance in five states, before a court order prevented the freeze on Friday. 

In nearly identical letters ACF sent to California, Colorado, Illinois and New York on Jan. 6, shared with the 74, the administration claimed it is “concerned by the potential for extensive and systemic fraud” in the states’ CCDF programs and has reason to believe that the states are “illicitly providing illegal aliens with CCDF benefits intended for American citizens and lawful permanent residents.” ACF is therefore, the letters said, placing the states “on temporarily restricted drawdown of CCDF funds until additional fiscal accountability requirements are implemented and necessary information is provided.” Those requirements include submitting verified, non-identifiable attendance documentation for children who receive subsidies. 

States are not currently required to give attendance information to HHS, Friedman said, and the requested information may not even be something they already collect. “I don’t think they’re going to have it on hand, and I don’t think it’s necessarily an easy lift or a quick lift to get it,” she said. 

If the freeze eventually goes into effect, and states struggle to send ACF what it’s asking for and cannot draw down CCDF funding, they won’t be able to pay providers who accept subsidies, most of whom have already provided the care they’re getting paid for. “It may be as severe as making them close their doors, it may mean they lose staff,” Friedman said. If the system becomes destabilized, providers may reconsider accepting subsidies at all and only enroll families who can pay out of pocket. “The child care sector, which is already teetering on the edge of crisis, becomes even more unstable,” Friedman said.

All of those outcomes would mean fewer child care options for families who can’t afford the full cost. Without care, “They may not be going to work the next day, they may lose their jobs,” Friedman said. 

The administration also announced other steps in reaction to the fraud allegations in Minnesota that are likely to financially hurt child care providers. In 2023, the Biden administration new rules to pay child care providers who accept federal vouchers more similarly to how parents pay out of pocket. It required that providers be paid based on enrollment so that they could count on steady payment even if children called out sick or skipped a day, and that they be paid upfront, rather than at the end of a month, so that the money better covered costs like rent and supplies. 

Without those changes, providers have to “eat the costs,” said Friedman, who worked on the rules, and get reimbursed after having already provided the services. Instead, the changes had state agencies eat that cost, which gave providers more stability and made the program resemble private pay practices. “These were really, really important reforms,” Friedman said. “If you have a $12 billion program, that program shouldn’t be adding to the child care crisis and adding to destabilization in the sector.”

Last week, HHS released a to rescind those changes, claiming it received feedback from several states and territories that the changes were “more costly and difficult to implement than HHS had estimated” and were “onerous,” with no mention of fraud as justification. But then the administration an announcement about the proposed rescission that claimed the Biden-era rules “weakened oversight and increased the risk of waste, fraud and abuse,” citing the fraud allegations in Minnesota. In a posted to X, O’Neill said the rules “weakened accountability and made fraud easier and not harder.” 

“They’re just outright lying,” Friedman said. But she fears that, while states are technically still allowed to pay providers upfront and for enrollment rather than attendance, the rhetoric around fraud will scare them off. “That will be devastating for providers,” she said. 

That day marks an important shift for her and other early care and education providers in Nebraska who serve low-income families. On that date, the state intended to begin paying providers a consistent rate for families who use government subsidies to pay for child care. 

Instead of reimbursing providers based on children’s attendance — which can vary wildly, especially this time of year, based on factors like illness and family travel — Nebraska would pay providers the same amount each month based on enrollment. 

Last year, because of the change expected to come in summer 2026, Hampson, who owns a home-based child care program in Lincoln, Nebraska, felt comfortable filling more of her program slots with children whose families pay with subsidies. Today, she does not have one private-paying family. She made the shift assuming the enrollment-based pay would insulate her from the instability that often accompanies subsidy slots. 

“I was super excited to know more of these families were going to get that quality, consistent care,” Hampson said, adding that reaching more low-income families is important in the field. “It’s not that providers don’t want to.”

Now, though, that could all be about to change. 

Nebraska’s transition to enrollment-based pay was part of an effort to get in compliance with a rule . Enrollment-based payments, that administration believed, would create greater predictability for providers, allowing them to serve more low-income families who need child care and, eventually, could entice more providers to participate in the subsidy program. 

The rule was one of a handful of changes made by the prior administration related to the Child Care and Development Fund (CCDF), the primary federal program that states use to provide financial assistance to low-income families in need of child care. Other shifts include paying providers up front for child care, rather than reimbursing them the following month, and encouraging the use of grants and contracts with providers. timelines for implementing these changes have varied. As of September 2025, 24 states were paying based on enrollment, according to an by New America. For the others, the latest deadline granted was Aug. 1, 2026. 

Just this week, however, the U.S. Department of Health and Human Services, through the Administration for Children and Families (ACF), that it would seek to rescind many of the 2024 rules, returning these issues to states. 

The cannot be enforced right away. Under federal law, the agency is required to take public comments, review them, and use that input to make final decisions, noted Alex Adams, who leads ACF. He declined to give a timeline for any changes to take effect.

If approved, the changes would not “make any net new policy decisions,” he added. “It simply goes back to where we were prior to 2024 regulations.”

The administration wants to rescind the 2024 rules, he said, because all 50 states had requested waivers related to some or all of these rules due to budget constraints and other implementation challenges. 

“Any time 50 states are asking for a waiver from something,” Adams said, “it suggests to me that maybe the rule isn’t working as intended.”

He also noted that “attendance-verified payment,” rather than enrollment-based, “is more of a deterrent to fraud.” Leaders in the Trump administration are concerned about programs with “phantom attendance” — suggesting they receive government payments but don’t actually serve the children they say they do — Adams said, but he declined to share specifics of ongoing investigations. 

Many early care and education advocates and policy experts have that rampant fraud and abuse is going unchecked. 

Casey Peeks, senior director of early childhood policy at the Center for American Progress, a left-leaning think tank, called the allegations “unfounded” and worried that they would undo real progress made in the field in recent years. 

“It is very unhelpful and destabilizing to the sector, in the immediate- and long-term, to take some of these most foundational levers we have to stabilize the sector and claim that they result in fraud,” Peeks said.

Upon hearing the news this week, Hampson said she’s had to remind herself to “just breathe.” She knew she was taking a risk by enrolling 100% of families on subsidies.

Now, she said, she will have to rearrange her budget to continue to serve all of those families. Under an attendance-based pay structure, her income is just that much more volatile.

In December, for example, between holidays, vacation time and children’s absences, Hampson was only able to bill the state for 18 child care days. If the children in her program were from private-paying families, she would have been paid for 23 days, she said. 

But Hampson’s operational costs didn’t see a material decrease in December. 

“Without a provider being at fault at all, they could be at 50% attendance one day just because the flu is going around. That shouldn’t harm their bottom line,” Peeks said. 

“It’s really unpredictable and unfair for the provider,” she added. “Just because attendance is down doesn’t mean operation costs go down.”

In West Virginia, where providers have been paid based on enrollment since 2020, Katelyn Vandal emphasized how critical the change has been to keeping her rural, center-based program open. 

“Our mortgage payment doesn’t cost less because two kids in the classroom have the flu,” noted Vandal, director of A Place to Grow, a child care center in Oak Hill, West Virginia. Nor does her electricity bill and a host of other overhead costs. 

If her state returns to attendance-based pay, she’s not sure A Place to Grow would be able to continue operating. The center serves about 100 kids, with 60% from families that pay with subsidies. 

“We run such a fine budget line anyway that if, six months from now, we were going back to attendance, we would be looking at closing,” she said. “We would not survive transitioning back to that.”

Sheryl Hutzenbiler, owner of Munchkin Land Daycare in Billings, Montana, said she suspects that, under attendance-based pay, providers will either raise tuition rates on families — many of whom are already paying the maximum they can afford without one parent leaving the workforce — or, like Vandal, be forced to close their doors. 

But that is not a decision Hutzenbiler will have to face, should the Trump administration successfully restore attendance-based pay. Since she lives in Montana, where enrollment-based pay became in 2023, she and other providers in the state are protected from policy fluctuations at the federal level. 

That’s true for a , which have either passed laws protecting enrollment-based pay or have continued paying based on enrollment, on a temporary basis, since the pandemic. (West Virginia is in the latter category.)

Enrollment-based pay has been pivotal for Hutzenbiler, whose home-based program consists of about 60% of families who pay with subsidies. Back when she was paid based on attendance, she said her first sacrifice during low-attendance months would be her own wages. She would pay her full-time teacher first and make sure program costs were covered, often leaving nothing for herself and relying on her husband’s income instead. With the consistent subsidy income each month, though, she’s not only been able to avoid missed paychecks for herself, she’s been able to add two part-time workers to the payroll. 

Hampson, in Nebraska, said she was part of a group last year advocating for the state to pass around enrollment-based pay. It was ultimately unsuccessful.

“We wanted to know our state had already said yes, so we wouldn’t go backwards,” she said. “And here we are going backwards.”

In an industry where profit margins are at less than 1%, these changes will inevitably leave providers who participate in the subsidy program with less revenue to survive on. The shifts will likely also deter providers who participate in the subsidy program, or who might have considered participating, from doing so in the future, said Peeks. This will likely, in effect, leave low-income families with fewer choices about where to go for child care. 

“When you’re stabilizing providers overall, you’re often creating more options for families overall,” said Peeks. “I think it could definitely have a chilling effect.”

By now, you may have seen the news that the Trump administration is ringing in 2026 by and implementing new administrative hoops for states to jump through in order to draw down any funding. There’s a lot going on here, and it’s complicated, so I thought a primer would be helpful to get everyone on the same page.

How did this all start?

This story thanks to a viral video by conservative YouTube personality Nick Shirley. Shirley claimed that a handful of child care centers, primarily run by people of Somali heritage, were running fraudulent operations with no kids inside. It may not shock you to hear that these assertions and , but the damage was done: the video has been viewed over 100 million times, and was amplified by powerful figures like Elon Musk and Vice President JD Vance. (Update: Since Shirley’s video went viral, The Minnesota Department of Children, Youth, and Families conducted compliance checks on nine child care centers in the video and that they were “operating as expected,” and that children were present at all but one, which wasn’t open for families during inspection.)

What Shirley seems to be doing is trying to make new hay out of an old story. There were allegations of substantial child care fraud in Minnesota . A that year from the state’s Office of the Legislative Auditor found that fraud was nowhere near the epidemic levels being claimed, but that there were significant weaknesses in the state’s anti-fraud controls. That mini-scandal helped lead to , to tighten anti-fraud measures around child care subsidies, and from the federal Administration for Children and Families including an audit launched in 2023 under the Biden Administration. In short — much like the Feeding Our Families food assistance fraud ring which began to be broken up years ago and has to dozens to criminal charges — this is being dredged up and repackaged in service of political aims.

Alas, those facts don’t seem to matter much. I’ll leave it to others to unpack the and , because motivations or pretext aside, the Administration is acting the way it’s acting.

What does the funding freeze mean in practice?

I need to get a bit technical for a moment. The main federal child care funding source is the Child Care Development Fund, or CCDF. The way CCDF money actually flows from federal government bank accounts to state government bank accounts (which states then tap to issue monthly payments to providers for each child that is enrolled in the state’s subsidy system) is through the U.S. Department of Health and Human Services’ Payment Management System, or PMS. States essentially submit regular requests to draw down money that has been allocated to them via PMS, the request is approved, and the bank transfer occurs. What HHS is saying they are going to do is put new steps in place between the request and the disbursement.

We have some idea of what this may look like, because earlier in the year HHS did a back when DOGE was busy DOGE-ing. Here is a relevant section of a webinar held for Head Start grantees:

In the announcement, it was shared that the payment management system, which was also known as PMS and used by recipients to request a drawdown of their awarded funds will be implementing a new mandatory field at the sub-account level. This new mandatory field requests a payment justification explaining the purpose of the requested funds. To support this request the Administration for Children and Families has asked that all requests for federal funding specifically outline the purpose and the use of the funds as they will now be made public in an effort to promote transparency and accountability.

To receive an approval of your payment requests, recipients will be required to summarize the use of the funds in alignment with their approved funding requests. If these approved activities or the use of the funds should be related to what has already been awarded through your baseline application, your continuation application, or any amendment request that has been approved, amendment requests may come in the form of a budget revision, a one-time supplement or a carryover.

Recipients are to provide short summaries outlining the purpose of the funds and include details for each cost category as provided on your notice of award. Just as a quick, gentle reminder, your notice of award is released in grant solutions to your assigned point of contact. One thing to note is that any failure to provide proper descriptions with your payment request may result in significant approval delays.

If your eyes haven’t glazed over reading that, here’s the takeaway: it’s a lot more work for state agencies, and a lot more opportunities for the Administration to say “no.” And this was just for Head Start, which is a relatively easy program to get one’s hands around because the money just flows from the federal government to Head Start sponsors, of which there are only about 1,600 nationwide. Child care subsidies flow from the feds to states, and from states through families to a myriad of private for-profit and non-profit child care programs, constituting a network of tens of thousands of end users. And state agencies that oversee child care meeting existing verification and compliance standards!

What are the potential consequences?

In a word: delays. Delays in drawing down funds are going to lead to delays in states getting payments out the door (something many states struggle ) which are going to lead to child care programs unable to make payroll or pay rent, which are going to lead to programs limiting or even ending operations. This isn’t hypothetical: During the pandemic, many states struggled to get aid out the door to child care providers, and . We also saw what can happen when, in 2023, Illinois :

CHICAGO — Some Illinois childcare providers have been forced to close their doors after they did not receive their paychecks from the state.

Childcare workers across the state are still waiting for their monthly paychecks, which they should have received at the beginning of January.

But 19 days later and many are unable to pay bills and are closing their doors until that money comes in.

“I got a license through the state of Illinois to be a childcare provider and take care of children and help families in need,” Kandanise Ramseur said. “And now I’m in need.”

Similarly, the Minnesota Reformer from Minnesota center director Amanda Schillinger, “who said that her center will shut down if it loses the 75% of children it cares for whose families receive government help for child care.”

I wrote to explain in more detail what we could see:

1) Most child care programs operate on shoestring budgets (child care is a necessarily expensive service to provide because child:adult ratios are kept low, so fixed staff costs are very high despite educators barely making above poverty wages). Any extra delay in payments can easily create a fiscal crisis where programs are unable to make payroll, pay rent, etc., and that can lead to service pauses / closures — we saw this happen during the pandemic when states struggled to get PPP and CARES Act funding out the door.

2) Programs that take kids using child care subsidy don’t *only* serve low-income kids. Many serve families across the income spectrum, so a center may have everyone from grocery store stockers to heart surgeons relying on them — which means disrupting service is going to have negative ripple effects up and down the economy, and across all sorts of jobs we were calling essential just a few years ago.

3) Though this all started with a focus on one community, families throughout the country rely on child care subsidies — in red states and blue, urban and rural and suburban areas, farmers and miners and factory workers alike. Weakening America’s already-neglected child care system will hurt America’s families. 1.4 *million* kids receive subsidies.

4) This isn’t even just about the youngest children — federal child care funds also support hundreds of thousands of school-aged kids in affording after-school and summer care, and therefore also impacts the viability of after-school and summer programs.

Happy New Year to America’s families!

What can be done?

In case this post feels too dispassionate, let me be clear: I’m furious. We’re watching one of the most Administrations in American history use a YouTuber’s crappy excuse for an exposé as part of a larger effort to demonize a particular immigrant group — and now they are going to punish millions of American families across the country who have done nothing wrong but are collateral damage in an attempt to deflect from failed, unpopular policies.

However, I don’t think the way I can best serve you all — and kids and families and child care providers across the country — is by stamping my foot. I am grateful for the foot-stampers out there who are already mounting a . I want you to understand what is happening, why it is happening, and what it means, so that you can spread the word.

Because that’s what we need right now. Swamp the invective with a focus on the real impacts on real families across America. Call your Congresspeople. Talk to your friends and family members. This episode has revealed that there are still about the of how in this country.

Fraud is unacceptable. We should say that, too. In fact, the best way to minimize child care fraud is to have a simple, robustly funded child care system with well-funded state capacity to provide support and oversight to providers, and strong guardrails against profiteering. Instead, we have a byzantine system of welfare and for-profit mechanisms smashed together, combined with hollowed-out state capacity — and then we pretend to be shocked when the broken thing breaks.

But right now, this isn’t really a story about fraud. Right now, this is a story about millions of American households — both those that rely directly on child care aid and those that don’t — that are about to take yet another blow to their well-being. The Administration’s actions here are needless, callous, and destructive: they should be pressured to release all child care funds ASAP.

Milo has been coming to work with Wiseman since he was 8 weeks old. He started in the infant classroom, and now he’s in a classroom for 1-year-olds. Wiseman said having Milo in a nearby classroom with teachers she knows and trusts has been a great relief.

“I knew I wouldn’t stop working after I got pregnant and I couldn’t imagine not working, but I also couldn’t imagine putting him in a different space than where I was,” said Wiseman. “It helps to not have to be paying for it.”

Milo’s child care tuition is covered by (CCAP), which was to employees working in a licensed child care program, like Wiseman, the benefit of free child care. Under the program, anyone who works for or more as a licensed child care provider in the state of Kentucky is automatically eligible for full child care assistance, regardless of their total household income. The program was designed to help recruit and retain child care workers amid facing the industry as temporary child care relief funds from the American Rescue Plan were coming to an end.

“The purpose of this program was to increase staffing in child care programs when wage inflation was causing child care providers to leave for more lucrative positions in retail and hospitality industries,” said Sarah Vanover, policy and research director at Kentucky Youth Advocates. Vanover was previously the director of Kentucky’s Division of Child Care and was the force behind expanding CCAP’s traditional income-based subsidies to include early childhood educators. Vanover points out that in the U.S., child care workers make , and that low wages make recruitment and retention of staff a constant struggle. 

Kathy Donelan, the owner of Aunt Kathy’s Child Care & Preschool, knows all too well that would-be hires can easily go to a nearby Amazon warehouse, or even the gas station across the street, and make more money “doing less work” there than working in child care. “It takes a real special person to come here,” Donelan said. Before CCAP covered the child care tuition for her educators, Donelan had always extended the offer for each of her educators to enroll their own children in the program, but the teachers who utilized this benefit would earn a reduced wage. In 2022, when the CCAP assistance kicked in for her teachers, Donelan was able to change her policy so that her employees could get free child care and get their regular salary.

Stephanie Milleck, the director of Aunt Kathy’s, said she saw her salary go up when the CCAP began covering the cost of her daughter’s child care. Both of her kids are now in elementary school, but she is still able to take advantage of the CCAP benefit during the summer when they participate in a summer camp program at Aunt Kathy’s. Milleck works with Donelan on hiring for new positions and says the free child care makes the job more attractive to candidates with young kids and helps with retention. “If it’s a mom of a new baby, we know we will have them for at least five years,” Milleck said. 

New data provided by Beth Fisher from Kentucky’s Division of Child Care shows that as of 2025, 5,510 families have utilized the program that provides free child care for child care providers, and that has included 9,657 children. Another 4,000 child care providers applied for the program, and were found to be income-eligible for child care subsidies for low-wage workers, and Vanover explained they were routed to that program instead. 

For Megan Senn, a preschool teacher in Louisville, Kentucky, this program has been “life changing.” Senn, who has a master’s degree in early childhood education, said she loved teaching but couldn’t make ends meet on the low wages she received when she was a Head Start teacher a decade ago. At the time, she was making less than $30,000 a year working full time, and had to rely on food stamps. In 2016, she moved into a series of management roles at Head Start and later the YMCA, where she oversaw six child care centers, at a significantly higher salary. She was making over $70,000 a year, but Senn said she missed working directly with kids in the classroom. 

It was CCAP that allowed Senn to go back to teaching. She found an early childhood teaching position that would pay her close to $50,000. She estimated that the cost of child care would be between $20,000 to 25,000 a year for her twins. “If you take that off the table, I could take a pay cut and go back to the classroom,” she said. Senn began working at Virginia Chance, an independent school in the Louisville area. When her twins turned 2 years old, CCAP paid the full cost for them to attend preschool there.

Being a teacher and being able to afford to send her own children to the same school she teaches in, has been game-changing,  said Senn. “They get a beautiful education and I don’t have to think about tuition costs and worry if I am bringing in enough money.”

The program is showing results because the math makes sense. Vanover explains that best practice is to have . “If the state pays the child care expense for one of those ten children in order to attract the child care provider, that still opens spots for nine more children who will have parents and caregivers working in the community and providing income tax,” Vanover said. 

have seen the success of Kentucky’s program in retaining child care providers and shoring up their early childhood workforce and are trying to follow suit. In August, Rhode Island launched a based on Kentucky’s model and Vanover said she’s been invited to speak to the Ohio Legislature about setting up a similar program, and has received interest from Utah as well.

While the program has garnered attention for its impact, there are still some areas for improvement. Although the it’s benefitted a majority of licensed child care centers in the state, not all early educators are eligible. Providers who care for their own children in a family child care program that they own are excluded. Vanover explained that the federal laws governing child care payments through Child Care and Development Block Grants from receiving payment to care for their own child, and Kentucky has modeled their program based on those same rules.

But many home providers go into child care because they want to care for their own kids, in addition to those in the community, said Natalie Renew, director of Home Grown, a national collaborative supporting home-based child care providers. “If [owners of] home-based providers could participate in this policy, it would support supply building and encourage more start up,” Renew said. As it stands, the policy is “prejudiced against home-based providers because staff in centers can work in the same place as their children, but those [who run] home-based care cannot.” 

“It’s challenging,” said Vanover, in addressing the ways owners of home-based programs are excluded from the program. She said the legislature is considering modifying the program so that more home-based providers may be able to access the benefit in certain instances, for example, if their child attends a licensed after-care program at another location. 

Some providers have also critiqued the enrollment process. Donelan said four out of her 24 employees are enrolled in CCAP, adding that a fifth staff member has been trying to access the benefit for over a year, but has been unable to do so due to bureaucratic hurdles. One challenge is that although the program doesn’t require income eligibility, applicants must provide extensive paperwork requiring up-to-date paystubs and income verification for all adults living in their home — and any delay in processing the applications requires that new paystubs are submitted. Donelan said she’s had to intervene with CCAP on behalf of teachers during delays. 

Another issue is that providers who have the summer off must withdraw from the program at the end of May and reapply in July. Senn’s school closes during the summer, and she said the reapplication  process takes about two weeks and involves multiple follow up phone calls adding that it can take up to two and a half hours to get through to someone.  

But this July could be the last time Senn needs to reapply since her 4-year-old twins will move into kindergarten.“I am truly thankful and it could bring me to tears how this [program] has just helped me. We have quality teachers that want to be in the classroom but choose not to be because it doesn’t bring enough to the table for their family,” she said.  “It’s heartbreaking because we need it so badly. Every state should have something like this.”

Some states and localities have created a source of dedicated funding, meaning a revenue stream that’s designated specifically to be used for child care, creating more stability for providers and families. And according to a recent published by the Children’s Funding Project (CFP), a national nonprofit that helps states and localities secure money for children’s issues, these funds have helped states navigate the turbulence.

Dedicated funding tackles a simple, yet bedeviling problem: year after year, advocates must fight for state general funds, but it’s frequently a losing battle since too many factors are outside of their control. The health of a state’s economy, the priorities of constantly rotating elected officials, and the actions taken by Congress and the president all shape how much available funding a state has during a given budget cycle — and how it will be divvied up. Since states are legally required to maintain a balanced budget, the squeeze is real. And unfortunately, even states that are very friendly toward early care and education issues will cut them when faced with tough math. 

Dedicated funding sidesteps the general fund scrum. The CFP report explained that “state dedicated funds are distinct streams of public revenue that are set aside for specific purposes, typically dedicated through action by a legislative body, approved by voters via ballot measure, or a combination of these approaches.” Because they have their own built-in power source, they are relatively insulated from the vagaries of state governance.

There’s no singular model for advancing a dedicated fund. The funding source and path to enactment vary by state and locality, depending on what taxes can be levied, how existing revenues may be used, and the political feasibility of potential legislative or ballot measures.

According to the CFP report, 22 states have some version of a dedicated fund to support children and youth — and the rate of adoption has increased in recent years, including at the local level. The report notes that jurisdictions have tapped a range of funding sources including taxes on nicotine, marijuana, gambling, payroll, sales, and capital gains, and, in the case of New Mexico, oil and gas revenues. The mechanism for establishing funds is also diverse, as some states have a fairly low bar for citizen-initiated ballot initiatives, while others don’t allow propositions at all and instead require legislative action. Increasingly, states are that hold the revenues , allocating an annual percentage for early childhood services.

The value and viability of dedicated funding sources was borne out in last month’s elections. In Colorado, for instance, — including a consortium of three ski-heavy mountain counties, and one politically mixed county in northern Colorado — voted for dedicated funding measures via lodging or sales taxes. Those revenues will be especially important as Colorado wrestles with statewide funding challenges that are leading to in many counties.

Other states established their dedicated funding practices years ago. California, for example, has one of the longest-standing dedicated funding sources due to the 1998 a campaign famously spearheaded by filmmaker Rob Reiner. Proposition 10 levied a 50-cent tax on tobacco and the revenues built a network of early childhood programs operating under hub organizations known as the First 5 Initiative.   

Of course, simply establishing a dedicated fund is no panacea. To create a successful solution, the funds have to be adequate. Kentucky, for example, established a fund sourced from its Tobacco Master Settlement agreement, which draws down around $26 million a year. This amount isn’t insignificant, but it’s not enough funding to majorly transform its early care and education system. Where and how the funding flows, and who has a say in deciding that, is also key. 

Additionally, precedent shows there can be a risk of uneven results if the funding source itself is variable, such as tapping so-called “sin taxes.” This has been proven most dramatically in states like California that rely on tobacco taxes. As fewer individuals smoke (which, most would agree is broadly a positive development), the revenues from tobacco taxes have steadily declined, provided through First 5 programs across the state.

As a majority of states face down what is likely to be years of budget pain, dedicated funding sources for early care and education should be a top-tier strategy. State experiences to date suggest that champions would do well to identify funding sources that are both relatively stable and can generate substantial revenues, such as payroll taxes or income taxes for high-earning households. Whatever specific tactics are chosen, the more that child care funding can be taken out of the Hunger Games arena that is state budgeting, the better.

Keeping to this ambitious timeline has depended on more than picking a location and making sure the facility meets regulatory standards. The initiative’s success depends on building a strong, sustainable workforce. It’s not just finding talented, certified early educators and getting them to show up on opening day, but creating a plan to retain them year over year. 

In light of an uncertain economy and a number of systemic factors, achieving this goal may be easier said than done. “We recognize many organizations have experienced challenges in attracting educators. Fewer people are entering the field, which makes it even more important to invest in developing and supporting those who choose this career,” said Beth Kroutch, human resources director for Catherine Hershey Schools for Early Learning. 

With three centers already open and three set to open by fall 2027, Kroutch stressed the importance of planning ahead and forging partnerships. One approach her team has taken, she said, “is to reach out proactively to local colleges and universities in advance to talk about our organization, engage in a partnership and make a connection that hopefully shows benefits to both parties.” In addition to developing partnerships with local higher education institutions, the Catherine Hershey Schools have an internship program for high school students that offers a pathway to employment. She also described other recruitment strategies such as social media and career fairs. 

Kroutch is right. Other early learning leaders are feeling the pain, too. “I spend most of my waking hours contemplating this topic,” said Rhian Allvin, founder of , a network of three centers — two in northern Virginia and one in Washington, D.C. It was never easy to attract talent to a profession with low wages, poor or nonexistent benefits and minimal opportunities for career advancement. And it’s a challenge to keep early educators in the field. Physical demands, long hours and emotional stress of the work all contribute to a in early childhood education.

A dramatic intensification of immigration enforcement has exacerbated these challenges. A considerable segment of the early care and education workforce are immigrants — at least 21% nationwide, according to published by the Center for the Study of Child Care Employment (CSCCE) at the University of California, Berkeley. With the of protections limiting federal immigration arrests around sensitive sites, about immigration raids on schools and child care programs have escalated and many providers are faced with difficult decisions like .

Felicia Jones Taylor, co-founder of , a consultancy that provides technical assistance to child care centers, underscored the impact of immigration policies on early educators. “Immigrants came from their countries with transferable skills. They have experience working with children, but there are barriers preventing them from participating in this workforce,” she said. 

More than other workplaces, child care centers are protective communities that support kids and families, said Lauren Hogan, managing director of policy and professional advancement at the National Association for the Education of Young Children (NAEYC). When educators are afraid, it affects the whole community.

Amid major workforce challenges, developing creative approaches to recruiting and retaining qualified child care staff has become increasingly important, early learning leaders said. Wages came up again and again as the most powerful recruitment tool. The child care , which is predominantly female and often women of color, has long endured . Unless and until things change, compensation will remain a leading reason why it’s hard to attract new talent, and why some experienced providers for higher-paying jobs. Caitlin McLean, a senior research specialist at CSCCE, summarized the problem: “You’ve invested that money in training people to work with kids and who probably would like to work with kids, but they end up leaving.” While the profession is rewarding, she noted, it is also demanding, and the supports that might keep them on the job aren’t always readily available.

of child care providers are considering leaving the workforce. that increasing pay reduces turnover and some programs have raised wages. The , a child care program that arose in Austin, Texas, in 2018, with a drop-in care model to offer flexibility for families, pays its educators $28 per hour, according to the center’s founder Choquette Hamilton. That’s nearly twice , according to the U.S. Bureau of Labor Statistics. To make this level of compensation possible, Hamilton said the center uses a braided funding model including support from the city of Austin’s . 

The choice to prioritize compensation was intentional. “That rate was a decision from the beginning,” said Hamilton. “The educators do feel respected and valued. All of our recruitment has come from word of mouth, so they definitely tell their friends, but sadly, it still isn’t enough, because the work is not full-time at that rate.” She explained that many of their educators work part time and are gig workers who piece together their livelihoods working multiple jobs. 

While compensation is key, leaders said a thoughtful recruitment and retention strategy goes beyond the paycheck. “There are lots of ways that directors demonstrate, in partnership with the families, just how much they really appreciate the work that the early childhood educators are doing,” explained NAEYC’s Hogan. She cited Children’s Village, a nonprofit preschool in Philadelphia, as an example of a program illustrating that appreciation by for employees including health care, vacation, sick leave and a retirement plan. “Most of our educators do not have access to that,” she said. “That demonstrates caring for them in a real way, thinking about their long-term well-being.” Hogan also pointed to the for child care workers to access child care for their own children, and said, “It has definitely had an impact on recruitment and retention, helping staff come in and stay and feel supported.” 

In addition to improving working conditions and pulling levers that make the field more hospitable, building a robust pipeline of candidates is also crucial. Keeping a full staff in place often means recruiting more people than you think you might need, but even in the rare instances when a child care program is able to offer and sustain higher pay and good benefits for employees, there are other factors that make it hard to hire and keep employees. Candidates are juggling personal and professional stressors that often shape their decisions. 

Allvin described frequent instances in which an educator will get through the screening part of the hiring process at Brynmor, but fail to show up for the interview. “We don’t ever hear from them again,” she says. “It happens all the time.” 

One point all leaders were sure to make is that community is key to retention, but building it takes time. The first year is critical, leaders said. Once staff see the investment, culture and support, they’re more likely to stay long term.

“You lose people mostly within the first six months,” said Allvin. Keeping the turnover rate under 20% per year has been a steady challenge. She expressed relief that after two years at her flagship site in Lorton, Virginia, the center finally has no openings to fill.

Kroutch said that because there are a number of Catherine Hershey Schools for Early Learning, her team has been able to show potential staff members for new locations what the culture is like by inviting them to open house events at existing sites. Meeting candidates in person is important, Kroutch said. It’s a first step in building community. 

In the face of staffing challenges, many child care professionals who are responsible for hiring and maintaining staff, have adopted an all-of-the-above approach, and have maintained optimism in spite of the odds. “Just because the system is broken,” Hogan mused, “does not mean that it is beyond fixing.” 

In December, Indiana’s Family and Social Services Administration that, due to the end of pandemic-era federal relief funding, it would stop enrolling new children in its main child care subsidy program, the Child Care and Development Fund (CCDF), and institute a waiting list. The number of child care vouchers available per month dropped by from last December to September, according to the state agency. The waitlist now has over 30,400 children and the state has it won’t issue any new vouchers until 2027. 

Miller’s program is one of many that’s feeling the strain. All of the families with infants at Room to Bloom rely on subsidies to afford care, but those infants have aged out and moved into toddler classrooms. Because families can’t enroll new babies, she’s had to completely shutter her infant classroom. That took a big toll on her financially. “Your highest rates of pay comes from your infants,” she said. “We no longer have that stream of income coming in.”

Then, on Sept. 4, Miller received an from Indiana’s Family and Social Services Administration’s Office of Early Childhood and Out-of-School Learning (OECOSL) with even worse news. The department was drastically cutting CCDF voucher reimbursement rates. “These adjustments address a $225 million funding gap through 2026 created by the prior administration’s unsustainable use of temporary COVID relief funds and ensure continued compliance with federal requirements,” the email stated.  

According to the email, providers would see a 10% decrease in the vouchers that pay for infants and toddlers from birth through 3 years old, 15% less for children ages 3 to 5, and a 35% drop for school-aged children cared for after school and during the summer. To arrive at these cuts, OECOSL said it had surveyed 25% of licensed providers and calculated reimbursement levels “that reflect current operating realities.”

“We did not have any warning whatsoever” that the reductions were coming, Miller said. “We were blindsided.” Since Miller’s program serves children from birth through age 5 during the day and provides after-school care for older children, she knew she’d be impacted by cuts across all the age bands, so she reworked her budget to be able to absorb the cuts without having to ask her families to pay any extra. She eliminated field trips and programming like baby sign language and STEM.

But about three weeks later when she went into the system to view her reimbursements, she discovered that the state had cut deeper than the email suggested. She found that her original rate of $155 a week for a school-aged child was not in fact being reduced to $100.75, which would have been a 35% cut. Instead, she received $49 per school-aged child, which is about a 68% drop. At first she thought it was a mistake, but then she made some calls and eventually was told that the percentage cuts were taken from a new, lower base rate. 

That $49 a week is supposed to cover everything Room to Bloom offers school-aged children: transportation from school, a teacher who offers homework help, an established curriculum. She said her reimbursement rate for children ages 3 through 5, meanwhile, has also been reduced by $68 dollars a week, while the rate for the youngest kids decreased by $14. Miller can’t afford to absorb that kind of cost on her own. She’s reduced staff hours, dropping some to part-time status, which may make it harder to retain quality employees. 

Even that is not enough. “Unfortunately now we have to ask our families to pay a CCDF shortage just so we can stay afloat,” she said. She’s not asking any parents to pay the full amount that she’s losing, but she’s asked most to kick in something. Those with school-aged children have been asked to pay $51 a week. “I will tell you, that’s hard,” she said, adding that before the cuts, parents didn’t pay at all. Some families simply don’t have that kind of money. For them, she’s just eating the cost. “We have to take care of them,” she said. “I cannot allow these students to be left hanging. I cannot do it.” 

Miller is far from alone in her experience. The cuts Indiana has implemented in its child care program since the end of last year are wreaking havoc on providers across the state. The state did not respond to a request for comment on the number of child care programs that have closed this year. According to Hanan Osman — executive director of the Indiana Association for the Education of Young Children (AEYC), which is gathering data on closures — more than 100 child care programs closed in September and October following the steep reimbursement rate cuts. Of those closures, 49 were due to economic hardship, while 16 were because of low enrollment. “Those programs are done forever,” Osman said. 

The decrease in vouchers means that collectively, providers are losing an estimated $1.9 million a week in revenue, while the reduced reimbursement rates have led to an estimated $1.8 million weekly loss, according to Early Learning Indiana, a state-level nonprofit that’s on the impact of the CCDF cuts on revenue.

More child care closures are expected to come. In an of 443 providers conducted by Early Learning Indiana, nearly 80% said they were receiving decreased funding from CCDF vouchers. Just 16% said they were fully enrolled, about 19% had closed at least one classroom, and 11% said they believe they will have to close entirely over the next year.

Indiana is not expected to be the only state to experience this crisis. All states have been grappling with a severe decline in federal funding. In 2022, the American Rescue Plan sent states $39 billion to prop up the struggling child care sector, but the grants stopped flowing at the end of 2023. The Biden administration’s “Build Back Better” legislative package, which included $100 billion for child care, was meant to ensure continued funding, but when it failed to pass it left an enormous, unfilled hole. “All of that is coming down,” said Jennifer Wells, director of care at Community Change, which organizes child care providers to advocate for policy change. 

The events unfolding in Indiana illustrate “an example of what happens when this funding gets cut,” Wells said. “But it’s not going to be isolated to Indiana. We know it’s going to spread.” Already Arkansas has followed suit; on Sept. 19, the state that it was cutting reimbursement rates for providers and instituting new copays for parents, although after the reimbursement change was paused for 30 days. Its voucher waiting list is . “We know it’s going to snowball across the country,” Wells said.

“Indiana is in crisis,” said Martha Rae, a former Indiana child care provider and current advocate. “Dumpster fire in a flood zone — that’s how we feel right now.”

Indiana has now potentially poured gasoline on the fire. On Oct. 10, OECOSL sent an email, shared with 91ɬ��, to families who receive vouchers that said, “We understand that some families may be noticing higher out-of-pocket costs since the recent provider subsidy rate adjustments.” After noting that providers set their own rates, in bold it told parents that they “have the right to choose a provider that best fits their family’s needs and budget.” It added, “Your child care voucher belongs to you, and you may use it at any eligible CCDF provider.” Advocates and providers fear this message will prompt parents to move to programs that are charging less or aren’t charging any extra at all. It will “create competition amongst providers,” Rae said. 

Alyssia Thompson, who runs the Agape Learning Academy, a child care center in Merrillville, Indiana, is already watching this happen. It’s become “survival of the fittest — shark tank,” she said. Thompson said she knows of providers who are charging “the bare minimum” to try to siphon children from other programs. “Parents are going wherever they can afford,” she said, even places that “might not even have a license.” The only reason she hasn’t lost families, she said, is because so many of them have been with her for so long. 

As with Miller, Thompson has experienced a far larger reduction in her reimbursement rates than the OECOSL email indicated. Typically, she would be reimbursed $160 a week for a school-aged child, but that’s dropped to $48, a 70% reduction. The rate for her preschool-aged children was reduced by 24%. “We were given false information,” she said.

Thompson had to make cuts to try to make the math work, such as getting rid of her cleaning service. “Anything I was paying to outsource to do, we have now just picked it up,” she said. “Now we have to do everything.” She’s asked parents to bring in snacks to reduce the cost of food. Even so, she’s had to ask each family to pay an extra $25 a week. 

Even with those changes, she may not be able to keep the doors open. The possibility of having to close her program “has definitely been a discussion,” she said. She’s confident she has enough money to operate for the next six months. But, she said that over the next four months, if she doesn’t see any signs that the state is changing course and she hasn’t been able to make up enrollment with parents who don’t use vouchers, she will notify her parents about closure. 

Early educators and advocates are mobilizing to push back on the cuts. “As soon as these providers got word of these cuts happening, they were immediately set on fire,” Wells said. The Indiana AEYC organized “INAEYC Calling Day” on Nov. 5 and the association asked providers and families to call state legislators  to make the case for investing in child care. With a budget surplus of this year, they hope to convince lawmakers to dedicate money to the sector. 

If they don’t, Miller is consumed with fear about what will happen to the school-aged children in her program. “Those are the most vulnerable students,” she said. She worries that if they can’t afford what she now has to charge them parents will decide to leave children home with an older sibling or even by themselves. That, she frets, will put them in danger; they’re not old enough to be cared for by anyone but an adult, she said.

To the state, Miller has a message: “Fix this crisis that you have put families and child care providers in.” She added, “Some way, somehow, it needs to be fixed.”

For some programs, the promise of incoming funding will be enough to restart operations. But many won’t be able to open their doors until they receive their federal dollars, which could take up to two weeks, said Tommy Sheridan, deputy director at the NHSA. 

Sheridan said the Trump administration understands the urgency and is “moving as fast as they possibly can.”

That said, this interruption had an opportunity cost, and it’s led to instability for families and providers, he said, adding that the shutdown caused staff to focus on issues they “should not be worried about,” such as fundraising and contingency planning.

Some providers fear greater delays since the Trump administration shuttered half of the Head Start regional offices earlier this year. 

“They’re going to be working as hard as they can, but they’re going to be doing it with half the capacity,” said Katie Hamm, former deputy assistant secretary for early childhood development under President Joe Biden.

And even once the funding comes through, closed centers will need to go through a series of logistical hurdles, including reaching out to families who may have found alternative child care arrangements and calling back furloughed staff, some of whom have found employment elsewhere. 

“Head Start is not a light switch,” Hamm said. “You can’t just turn it back on.”

This interruption has also further eroded trust between grantees and the federal government that was already shaky, she added.

The Administration for Children and Families did not respond to a request for comment on when programs can anticipate communication from the office or their funding.

Since Nov. 1, approximately 65,000 kids and their families — close to 10% of all of those served by Head Start — have been at risk of losing their seats because their programs had not received their awarded funding during the longest government shutdown in history. The early care and education program delivers a range of resources to low-income families including medical screenings, parenting courses and connections to community resources for job, food and housing assistance. 

At the peak of the Head Start closures, roughly 10,000 kids across 22 programs lost access to services, according to Sheridan. A number of the remaining programs were able to stay open through private donations, loans, alternative funding streams and staff’s willingness to go without pay.

Valerie Williams, who runs a Head Start program with two facilities in Appalachian Ohio, was excited to tell parents that classrooms would be reopening soon. Her centers have been closed since Nov. 3, impacting 177 kids and 45 staff, many of whom already live paycheck to paycheck, she said.

A number of families were doubly impacted, losing access to Head Start’s resources as well as the Supplemental Nutrition Assistance Program, also known as SNAP, simultaneously. In the days leading up to the closure, Williams and her staff prepared families as best they could, sharing information about resources for food, assistance for utilities and heating and guidance on child care options. 

On Thursday, Williams wrote to parents via an online portal that she hopes to restart the normal school schedule sometime next week. The post was quickly flooded with comments. 

“This is super exciting!!” wrote one parent. “Best news in a long time. Carter has been asking every day. Hope to see u guys very soon.”

“Yayyy,” wrote another. “The kids miss you guys so much!”

Still, Williams knows reopening won’t be seamless. Along with program leaders across the country, she’ll need to call back furloughed staff, place food orders and handle a number of other operational challenges.

And despite the excitement, the transition back may also prove tricky for some kids.

“I do think that it will feel like starting school again for a lot of our classrooms,” Williams said. “They’ve been out for two weeks … You’re going to work on separation anxiety issues, you’re going to have to get into that routine again and the structure of a classroom environment. So I think that will be a big issue for a lot of our teachers.” 

As of Friday afternoon, Williams was still awaiting communication from the federal Office of Head Start with information about the anticipated timeline for next steps. 

“As soon as we get that notice of award, [I want to] start our staff and kids back immediately,” she said. “The very next day.”

Now that the shutdown has ended, what’s next for Head Start?

Funding for Head Start is complex. Some 80% comes from federal grants that are released to local providers on a staggered schedule throughout the year. This year, grant recipients with funding deadlines on the first of October and November were left scrambling, as the federal shutdown dragged on.

The government began to resume operations late Wednesday night after President Donald Trump signed a bill, funding through Jan. 30 and allowing programs that didn’t receive their funding on time, including Head Start, to use forthcoming dollars to backpay expenses incurred over the past month and a half.

Here’s what Hamm predicts will happen next: The Office of Head Start will recall all staff to resume, including those who were furloughed during the shutdown. The employees will review grant applications, a process which requires them to flag any language that might be reflective of diversity, equity and inclusion practices. Next, money will be sent along to the remaining regional offices, and eventually dispersed to individual grantees. The NHSA is hopeful that this process will be completed by Thanksgiving for all grantees.

There are two things the federal government can do to help centers open faster, according to Hamm. First, they could waive a typical protocol that leads to a period of seven days between when a member of Congress is notified that their state will be receiving funding and when the funding actually goes out, Hamm explained. 

Officials could also notify grantees, in writing, about how much money they’ll get and when it’s expected to come through, so they can begin planning. 

Unlike SNAP, which received guaranteed funding through the budget year, money for Head Start remains uncertain beyond Jan. 30. While the fear of another shutdown has caused “quite a bit of worry” among the Head Start community, Sheridan said it would likely lead to fewer program disruptions, since it wouldn’t fall at the start of the fiscal year.

To prevent similar chaos moving forward, Democratic Sen. Tammy Baldwin of Wisconsin introduced in the final days of the shutdown that would guarantee uninterrupted service for fiscal year 2026. 

“The 750,000 children and their families who use Head Start shouldn’t pay the price for Washington dysfunction,” Baldwin, the ranking member of the Senate Appropriations Subcommittee for Labor, Health and Human Services, Education, and Related Agencies, wrote in a statement to 91ɬ��.

Multiple funding threats and deep staffing cuts by the Trump administration over the past year have plunged programs across the country into uncertainty. In the wake of that recent upheaval, a leadership change is also underway. The acting director of the Office of Head Start, Tala Hooban, accepted a new role within the Office of Administration for Children and Families and will be replaced by political appointee Laurie Todd-Smith, according to an email statement from ACF. Todd-Smith currently leads the Office of Early Childhood Development, which oversees the Office of Head Start. 

Sheridan described this move as anticipated and not particularly concerning, though others were less sure. Joel Ryan, the executive director of the Washington State Association of Head Start, noted that Hooban was a longtime civil servant and strong supporter of the Head Start program. Without her, he fears “there’s nobody internally with any kind of power that will push back,” on future threats to the program.

Another worry plaguing providers: current funding for Head Start has remained stagnant since the end of 2024, meaning that through at least Jan. 30, programs will be operating under the same budget amid rising costs across the board.

In previous years, the program’s grant recipients typically got a cost-of-living adjustment, such as the bump ($275 million) for fiscal year 2024. In May, a group of almost 200 members of Congress signed to a House Appropriations subcommittee, requesting an adjustment of 3.2% for 2026. A recent statement from NHSA suggested that instead, the proposed Senate bill for next year includes a jump of just , or $77 million.

“If we don’t see a funding increase in line with inflation, that means that Head Start will be facing a cut of that degree,” said Sheridan. “It’s just kind of a quiet cut, or a silent cut.”

“I think what will end up happening,” said Ryan, “is you’ll end up seeing a massive reduction in the number of kids being served.”

England’s new initiative, which launched Sept. 1, is called “.” It’s a government-funded effort designed to provide 30 hours of free child care a week, 38 weeks out of the year, for working families with children between 9 months and 4 years of age. Unlike the vision of universal systems put forth in Canada and New Mexico, England’s goal is targeted towards low- and middle-income families. To qualify, each working parent in a family must make less than 100,000 pounds a year, which as of the current exchange rate is a little more than $130,000. There is also a minimum income requirement that each parent must meet, which is equivalent to working at least 16 hours a week at .

This isn’t a brand new system, but rather one that builds upon existing policies. For example, as it stands, English families that have a 2-year-old can get if they get “extra support” — in American terms, public assistance or welfare — which they can receive for a number of reasons including their income level or if they’re raising a child with a disability. Additionally, all 3- and 4-year-olds in England get 15 hours of free care as a matter of entitlement, with no eligibility check. In theory, the recent expansion increases access so more families can get more hours of free child care. But in practice, it is proving to be a complicated program that’s leading to unintended consequences related to child care capacity and equitable access for families. 

When it comes to child care supply, the initiative has raised a number of problems. Like the U.S., England is also plagued by , which few experts seem to think this new policy change addresses. In fact, some warn that it may actually be worsening the issue because the free child care promise but the rate the government is funding is lower than the true cost of care. In short, England is running smack into the same wall as many child care reforms in other countries, including America: they aren’t paying enough. For years, child care providers and advocacy groups have that the per-hour reimbursement rate is too low to run sustainable operations, and in many cases providers have been balancing the books by raising the cost of non-subsidized hours. The expansion of free hours may therefore, perversely, damage child care supply by turning program budgets upside-down, and — which will fall at the feet not just of affluent families, but low-income households too. 

The Guardian reported that the initiative has already , including Roo, a civil servant whose family is ineligible for the new program because her partner’s annual income is too high. “Our fees went up by 30% in April,” Roo said in the article, adding that it was an increase of about 330 pounds a month, or about $430. The Guardian goes on to note that some parents may now be incentivized to cut back their hours or otherwise shift their earnings around to get under the 100,000 pound threshold for eligibility. On the other end of the income spectrum, an by New Economics Foundation, a left-leaning British think tank, concluded that just 11% of English families in the lowest income quintile will qualify for the full 30 hours because they’re not meeting the income requirements, meaning they too may have to rely more on the unsubsidized hours that could be getting more expensive.

To add to the cost issues, the up front that families may be asked by their child care providers to pay additional fees for “extras” like meals, diapers and activities — and that they can opt to pay or discuss alternatives. There have been reports of child care programs as a way to try and adapt. Neil Leitch, CEO of the Early Years Alliance, England’s largest early educator membership organization, The Independent that if the funding for the free child care initiative is continually inadequate, “the infrastructure will collapse over a period of time.” He warned: “I can’t say it will be one year or five years, but you can bet your bottom dollar if you don’t give somebody enough money to deliver a service, at some point they stop.”

Many of these challenges track back to the first-order choice to expand child care by having the government cover the cost for a given number of hours per week. That option stands in stark contrast to government-subsidized models in Canada and the Nordic nations, which lean heavily on covering programs’ monthly operational costs in exchange for low fees. It also differs from the approach taken in some American states, including Vermont and New Mexico which rely on a high concentration of voucher-like subsidies. The hours-based model has meager evidence of being effective, and places that have tried it, like New Zealand, similarly .

As the United States grapples with how to evolve its child care policies, there are lessons to be learned from England’s implementation. Political communications expert Anat Shenker-Osorio often her clients to “sell the brownie, not the recipe,” signaling that it’s more effective to hype the outcome, rather than how it will operate, but the recipe also really matters. Without thoughtful policy design to back it up, even a strong idea with the right messaging could end up having limited real-world impact and bad press. 

Moreover, the negative downstream effects of England’s inadequate per-hour funding demonstrates, yet again, that child care cannot be fixed on the cheap, while the convoluted nature of the new system illustrates that layering a new program on top of an existing one can be less effective than coming up with a single comprehensive policy.

That said, it’s important to recognize that multiple things can be true at once. The desire of England’s Labour Party leaders to expand provision of free child care is laudable, and some families are already benefiting mightily. The popularity shows just how much parents are looking for support around care, and leaders shouldn’t be knocked for their policy ambition. At the same time, a poorly developed child care system can end up harming families and providers, and could even turn the public against a good underlying idea. 

It’s early days for England’s new child care initiative, and there’s still time to accept the weaknesses of the underlying policy design and adjust course. In fact, that would be a lesson in and of itself.

Over the years, she’s lobbied her state legislature to secure funding to support children with disabilities and worked with local officials to . When COVID-19 hit, she co-founded the Wisconsin Early Childhood Action Network (WECAN), an advocacy organization focused on increasing public investment in early childhood that grew to include 2,000 child care providers, educators and parents in Wisconsin. 

During COVID, she relied on to keep her doors open, but when those dollars finally dried up for good this past summer, the economics of running a family child care center in rural Wisconsin no longer worked. After 18 years in business, she on Aug. 29, 2025. 

Four days later, she filed to . 

She’s not alone. A number of child care providers have become involved with advocacy efforts, whether working with statehouses to add money for child care to state budgets or collaborating with local governments to coordinate distribution of funds — and some of them have gained the skills, confidence and passion to run for office.

Buoyed by her work organizing providers to take action on child care, Hendrickson said she feels prepared to explain how and why allocations from the state budget affect providers’ livelihood, and why child care plays a critical role in her state’s rural economy. When she goes out into the community to talk with people, from firefighters to farmers, they consistently bring up child care as one of the barriers they face. “It’s coming up organically,” said Hendrickson. “Which is telling me it’s really an issue.”

For BriTanya Brown, owner of a family child care program in Texas, it was organizing two successful ballot measures on child care in her state that motivated her to seek office. The first was a statewide property tax measure designed to offer child care providers a break by waiving property taxes and the second was a in Travis County, Texas to leverage property taxes to make child care more affordable for residents. 

Brown, who began working in child care when she was 13 years old alongside both of her grandmothers who cared for neighborhood children, opened her own program in 2019 after her twins were born. That same year, she began organizing family child care providers to send in stakeholder comments and lobby state legislators on reimbursement rates. “We do the same work as centers and abide by the same rules. We wanted pay parity,” she explained. 

Then, in 2021, Brown created and organized a , an event which has since become the largest one-day work stoppage in child care organizing history. 

Over the past few years, Brown said she hit a number of roadblocks including licensing obstacles and financial challenges with subsidies. She ultimately had to close down her family child care in July of 2025.

“It was devastating,” Brown said, “but that loss became the catalyst for my advocacy. I had seen, up close, how fragile our care infrastructure truly is.”

In August, when Rep. Stan Lambert announced after serving four terms in the Texas Statehouse, Brown jumped at the chance to . “I’m a new face, but I’m a trusted face in my community so I think I really have a chance,” she said. 

***

Child care issues gained political momentum during the COVID-19 pandemic, when the U.S. got a crash course on the importance of child care to its economy, and the sector continued to garner public interest through the 2024 presidential race. by New America found that by 2025, mentions of child care in the media are twice as high, on average, than they were before COVID, with a spike during the 2024 election. As the child care crisis continues to be part of the news cycle and political discourse, “it’s not surprising that the groups would recruit and support people who have a distinct expertise in this area, and would bring a unique and important perspective to the table,” said Kelly Dittmar, the director of research and a scholar at the Center for American Women and Politics at the Eagleton Institute of Politics.

Erin Vilardi, CEO of Vote Run Lead, a nonprofit that recruits and trains women on the campaign trail, said issues surrounding child care are often an impetus for candidates to run. “Half of the women who come through our program are parents,” she said. “The child care debate is one of the top three things we are talking about.” 

Brown and Hendrickson aren’t alone in leveraging their child care backgrounds to run for office. Shaolin Brown operates a registered family child care program from her home and is running this November against a longtime incumbent for Mercer County Clerk in New Jersey, hoping to address child care capacity limits and licensing requirements, which she said can help families know which providers are meeting state safety guidelines. 

And a number of existing public servants have paved the way for these candidates by successfully drawing from their experiences working in early care and education to become legislators. Sen. Patty Murray, for seven years before becoming a state senator and then a U.S. senator. Alabama Sen. Kirk Hatcher is the ; Aletheia McCaskill, a member of the Maryland House of Delegates runs a and has been a licensed family child care provider since 1998; and Rebecca Dow, a member of the New Mexico House of Representatives, founded a child care center, where she worked for ten years before retiring in 2019.

Both Hendrickson and BriTanya Brown said the unique insights they’ve gained into families with young children have helped shape their platforms, and the communities they’ve developed through their child care work have been crucial as they run for office.

“I now have a huge group of people to support me. Most can’t donate, but they can make calls,” Hendrickson said. “This helps me be more inclined to do it. It’s not as scary when you know the people who have your back.”

Hendrickson said the power of her personal story of hardship resonates with voters, regardless of political affiliation. She speaks openly of a time when she had young children at home and her husband lost his job. “We had to rely on food stamps and BadgerCare,” she said, referring to Wisconsin’s state health insurance for low-income families. It was her family child care program that kept her family afloat, and it was also what brought her to advocating for change. 

“People feel ashamed because of the way the system is set up — they feel like failures. But the system has been created so that it doesn’t work for us and it exploits women and young children,” Hendrickson said. 

Running for office, she added, is “part of my journey of being a family child care professional.” 

As leaders in early childhood education whose organizations represent those working across the broad spectrum of care environments, we are united in our support of New Mexico’s approach to addressing the that long has vexed policymakers, providers and parents alike. By designing and funding a system that is “both/and” rather than “either/or,” the state is addressing the needs of families and providers across center-based, home-based, school-based and friend, family, and neighbor (FFN) care settings.

We are also energized by what other states can — and should — learn from New Mexico’s progress. 

The state has taken a series of policy and funding actions over the past six years that have led it to create a for early childhood, approve a constitutional amendment guaranteeing a right to early education and eventually announce plans to make universal child care a reality. Others can learn lessons from these actions about how to strengthen their own child care systems, whether by making them more robust or even building a path to universal child care, so they can see the benefits in their own backyard.

The reality is that families in the U.S. rely on a fragile child care ecosystem, one that is often cobbled together to reflect each family’s unique needs, schedules and goals. But one thing all families share is a desire for their young children to be safe, happy, healthy and learning — no matter where they are. So a universal child care plan offering true choice is a win for everyone, as New Mexicans soon will experience.

Over the years, a key priority for the state’s policymakers has been increasing the supply of quality child care by supporting educators and caregivers. New Mexico has made advancements including raising wages for early educators and increasing reimbursements rates for those who take subsidies. The universal child care system’s foundation will be built on growing the number of well-compensated, well-prepared, well-supported providers across all settings.

that it needs another 5,000 early learning professionals, and the state pledges to grow the field by, among other things, building on years of investment in the education, preparation and compensation of early childhood educators. The state is committed to meeting parents and providers where they are, including by providing resources and support in multiple languages. The state will also offer low-interest loans for facility expansion; partner with school districts and employers to expand options for working families; launch a campaign to recruit licensed and registered home-based child care providers; make it easier for relative caregivers to participate in state programs; and increase reimbursement rates to programs to reflect the true cost of care, including incentivizing programs that offer a wage scale beginning at $18 per hour.

The bottom line is that there will be multiple entry points and advancement opportunities for early childhood educators along with strong support for caregivers under New Mexico’s new system — and each of those will create more supply of quality care options for babies and young children. 

We believe that this is how universal child care can and should work. Families, regardless of income, have the option to choose the setting that works for them while states strengthen and fund the entire continuum of care and education by prioritizing the people who provide it.

Success in New Mexico will require continued investment from the state legislature, ongoing collaboration between provider and caregiver communities, and efforts to expand access to high-quality child care environments. And it will require a continuation of the kind of advocacy, bold leadership and grassroots activism the state’s early childhood educators, caregivers and families led for years, which helped lead the state to this groundbreaking step.

For too long, families and policymakers have been faced with impossible decisions about whether to prioritize affordable care or quality child care, and how to support providers across a variety of places where early care and education happen. New Mexico’s step aims to put that to an end.

We have every confidence that New Mexico will make it work and demonstrate that there is a path forward in advancing toward universal child care. Every state with a child care crisis — and that’s all of them — can embrace the successes that come from New Mexico’s effort to support early educators and caregivers, which illustrates what’s possible when we come together for children and families.

But recently, the state’s legislature has taken steps aimed at rolling back some of the Beaver State’s early care and education progress — and now it’s on a path toward becoming the canary in the coal mine for child care retrenchment. 

Child care advocates have had their eyes on Oregon for some time as the state has developed and implemented its vision for a comprehensive statewide early childhood system focused on access and equity. In 2016, the state launched Preschool Promise, a statewide publicly funded pre-K system for children from low- and moderate-income families. In 2020, voters in Multnomah county in Portland approved the Preschool for All measure, which is designed to build a universal pre-K system while protecting infant and toddler slots, all funded by a tax on high-earning households in the county.

But Oregon’s notable progress in early childhood is now on rocky ground as the state pulls back on its funding for these systems. 

In June, the Democratic-controlled Oregon Legislature $20 million from Preschool Promise, a 10% decrease that, per Oregon Public Broadcasting, could necessitate cutting slots for up to 640 students. Other early childhood programs unrelated to preschool, such as those focused on early health and parenting education, will also see substantial cuts.

Separately, in June, there was a last-minute attempt by Oregon legislators to slip an amendment on the interaction between state and local tax systems that would have sunset Multnomah County’s universal pre-K system by 2027 by forbidding Multnomah from further collecting the tax. The effort was supported by Oregon’s Democratic governor, Tina Kotek, who that “If Portland does not rebound in the way we think it can, the downstream impacts on our economy will end up costing our most vulnerable and lowest income Oregonians the most.” Specifically, Kotek and others have expressed . In the face of vociferous opposition by Multnomah politicians and advocates, as well as research suggesting those fears were largely unfounded, the effort .

The driving force behind the Preschool Promise cuts and the proposed wind-down of Multnomah’s universal pre-K program is a poor economic forecast that has led to declining projections of corporate taxes, which is the primary way Oregon funds its statewide early childhood programs. As one of the top exporting states in the nation, Oregon’s economy — and corporate tax base — is particularly exposed to effects from the Trump administration’s tariff policies. The legislature was clearly, of Democratic Sen. Lisa Reynolds, “reluctant” to take these actions. 

The big question is whether Oregon is an outlier or a trendsetter. So far, the evidence points toward trendsetter. While few states with specialized funding sources or especially healthy economies, such as New Mexico and Connecticut, have been making major progress in early care and education, many states have begun taking worrying steps to walk back funding in 2025. That’s not surprising. As states begin to of the Republican reconciliation package, which will require more state backfilling of Medicaid and SNAP funding if they want to avoid benefit cuts, they’re looking for ways to cut costs.

For instance, as of January, many major counties in Colorado, including Denver, have instituted for their state’s child care subsidy program due to underfunding and compliance with Biden-era policy changes, which required increased per-child reimbursement rates and lower parent copays. In May and August, respectively, and also enacted subsidy enrollment freezes. In early September, Indiana announced it was by 10% to 35% — based on the age group of children served — to help close a state budget gap, a move which will likely cause many programs to stop accepting children from families that use subsidies. And Arkansas announced that it was going to a regardless of program quality, which would result in an average rate cut of nearly 20% — and the move after widespread protestation.

In each of these cases, there are state eccentricities at play. Colorado, for example, sets subsidy reimbursement rates and parent copays by county, not at the state level, meaning the new federal regulations have caused uneven consequences. In Indiana, critics point to the state’s new school voucher system as a big reason for their budget shortfall. 

The common theme, however, is that child care keeps finding itself on the chopping block despite all the political champions that have been cultivated across the years.

This retreat, even among states that have been leaders in early learning, sends a major warning signal to advocates, philanthropists and policymakers. The reality is that it’s easier to cut an issue area like child care, which while popular with voters, isn’t particularly powerful politically, than to slash services protected constitutionally, like schools, or those with huge constituencies, like health care or business. State legislators may be reluctant to drop the knife on child care, but we can already see that they will.

Ultimately, a federally-funded solution for child care is needed to smooth out state differences, but so long as states are holding the bag, it is important that as they envision, develop and implement solutions, leaders are seeking out ways to protect the progress they make. That might include creative alliances with family policy advocates working on school-aged or elder care, building sustainable child care funding streams like dedicated trust funds and to early care and education. 

Efforts like these can help insulate child care from the vagaries of state budgeting and the chaos of the current administration’s policies. If reliably liberal Oregon, a state that’s prioritized early childhood for years, is starting to make child care cuts, then every state should be preparing to stand firm in the face of the approaching storm. 

Part of the way he sold it to her, he explained, was by focusing on the time-limited nature of Let’s Grow Kids and the plan to sunset the group in 2025. 

Davis, a longtime philanthropist focused on supporting children and families, believed that investing in early interventions geared toward children ages 0 to 5 would make the biggest impact on creating opportunities for kids in his state. Let’s Grow Kids homed in on an ambitious goal to provide quality child care for every child in Vermont, and Davis created an aggressive timeline to get the job done. 

Richards wasn’t convinced right away, she explained, but after persuasive calls from former Vermont Govs. Peter Shumlin and  Howard Dean, she came aboard and built a team that would drive the state to become the first in the nation to have a near-universal child care system. 

Over the last decade, Let’s Grow Kids raised over $70 million in private philanthropy and grew to a team of 40 staffers. Their efforts built momentum around child care issues and drove progress that supported Act 76, the bill that created Vermont’s near-universal child care program, which was signed into law in 2023 after a . In the two years since Act 76 passed, more than 100 new child care programs have opened, creating over 1,000 spaces for children and 230 new early childhood educator jobs — and an additional 4,000 children in Vermont now qualify for tuition assistance. Let’s Grow Kids was heavily involved with implementing these changes.

On Oct. 3, the organization officially sunset its operations, just as Davis and Richards had planned. 

The time-limited nature of the organization has been critical to its success supporting and implementing legislation, both leaders said, and the wind-down process signals that the state is ready to sustain the changes. 

The Behind-the-Scenes Process of Sunsetting the Organization

In September, Richards addressed a room filled with more than 200 child care advocates in Burlington Vermont to highlight the progress made by Let’s Grow Kids, surface the gaps that remain and to discuss the roll out of the next phase of work, which will be carried out by a group of permanent organizations focused on child care financing, workforce, data and advocacy. 

But the organization began planning for this transition years before it was fully dismantled, building partnerships with the organizations that would move implementation forward, and creating a phase-out plan for the staff. 

“Nothing works without a deadline, it’s human nature,” said Richards. “It sharpens focus and adds accountability. We would always ask, are we on track to win? There wasn’t enough time to pat ourselves on the back.” 

Because Let’s Grow Kids was never intended to be permanent, the team was able to operate at a “faster pace, raise money more effectively, and attract top tier talent” explained Erin Roche, who worked at Let’s Grow Kids for six years before heading up First Children’s Finance, a nonprofit focused on the business development needs of child care centers and providers in Vermont, and one of the organizations picking up the baton from Let’s Grow Kids now. “[Let’s Grow Kids] was inclined to build more infrastructure because they knew they were leaving. They knew they would need support in place for child care businesses they were supporting once they were gone,” said Roche. 

The organization’s expiration date also spurred more philanthropic investment. “We never could have sustained the level of philanthropy [as a permanent group],” said Richards. “Part of the reason we were successful is we could ask for a one year capital gift.” And during the COVID-19 pandemic, the timeline helped the team stay focused on their mission, even as they pivoted to working with child care organizations to receive personal protective equipment supplies and American Rescue Plan Act funds, she said. When the state’s legislative session resumed in 2021, Richards explained that they’d gained a stronger network and the trust of elected officials and child care providers alike.  

Staff, too, have been part of the sunset strategy. By having a declared end date, the staff, including Roche, were inclined to find new roles at various organizations throughout the state. Some former staffers from Let’s Grow Kids now lead Vermont’s National Association of the Education of Young Children. Others work with Roche at First Children’s Finance. One former staff member, Janet McLaughlin, is now the Deputy Commissioner for Vermont’s Department of Children and Families, leading the Child Development Division, which oversees child care policy and implementation in Vermont. 

The final remaining staffers are transitioning to the Let’s Grow Kids Action Network, a 501(c)(4) group tasked with doing the political work necessary to protect the funding provisions in Act 76. 

“Right now we don’t really know the lobbying needs,” said Jerusa Contee, managing director at the Let’s Grow Kids Action Network. “Implementation is still new, so we know we are going to need some help, but we could find out that in a couple of years people have accepted that child care is a core part of the budget.”

While Act 76 brought major changes to the state’s child care infrastructure and increased access to subsidies for many families, the state still doesn’t have what would be considered “universal” child care. Between 80% to 90% of Vermont families with children in child care programs are eligible for subsidies, according to an internal analysis conducted by First Children’s Finance using 2024 Census data, said Roche. “The families it doesn’t capture are spending a lot on child care, and that’s a hardship,” said Roche, who is working on figuring out who is left out of the subsidies and why. At a certain point, she said, it takes more effort to run a program that leaves only a handful of people out than it would to make it fully universal and eliminate the paperwork required to prove eligibility — a step New Mexico recently took. 

Could This Happen Elsewhere? 

Child care remains a among voters across party lines. Polling indicates that younger generations are prioritizing child care that many consider child care a leading workplace benefit. While efforts to improve child care infrastructure at the national level have stalled, advocates are closely watching states that have developed policy and funding solutions, and many are asking what aspects of Vermont’s child care program could be replicated elsewhere. 

Richards said she’s been contacted by people who work on child care policy in other states, including Colorado, Nebraska, Massachusetts, Connecticut and Arkansas, looking to hear about what helped the state pass the landmark bill. In these conversations, Richards holds fast to the idea that the sunset provision is key to running an effective campaign and setting up the necessary infrastructure to carry on implementation and protect the bill. She also points to the Vermont has gathered about how increasing access to child care has impacted the state’s workforce participation and increased tax revenue, and how quality child care has contributed to education factors like kindergarten preparedness. 

After the September event in Burlington, the alumni and remaining Let’s Grow Kids staff gathered outside for a group photo, noting the symbolic pun of the sun setting behind them over Lake Champlain. No one is brazen enough to say “mission accomplished” out loud, Richards said, but both she and Davis acknowledge a deep satisfaction with what they have built. 

As for the immediate future, Richards is taking a month off, then will stay on as the chair of the board for the Let’s Grow Kids Action Network. “I’m tired,” she said, while smiling. “I’ve been running nonstop for the past ten years.”

But recently, the Bugaj family’s circumstances changed overnight. 

In August, her husband’s union , and the unexpected disruption in income suddenly made it tough to pay tuition for their toddler and infant to attend . Bugaj said the weekly cost for their 4-year-old Cecilia is $295 and for their 7-month-old Josie is $370.

The child care center’s scholarship program made it possible for Cecilia and Josie to continue to attend the program as their father’s strike went on. There was no form to fill out. The director, Julia Myers, didn’t request Bugaj’s tax returns. The family didn’t even have to ask.

Founded in 1871, Toledo Day Nursery is the oldest child care center in Ohio and has of serving working-class families in the industrial city. While some states, like Minnesota, have early education scholarships, this approach is distinct in that it is supported by philanthropic funding and there’s no cumbersome application process. 

Toledo Day Nursery’s scholarship program, which launched last summer, is designed to meet the needs of families experiencing sudden or unexpected financial stress. Job loss, a new baby, a death in the family and even the perennial of the holiday season have led families to receive these short-term scholarships. 

The scholarships are available to families who don’t qualify for subsidies through or its — which are determined on the basis of gross income — but are still struggling to afford care.

The funds the program as part of its , which is an effort to strengthen the U.S. child care system. Marica Cox Mitchell, Bainum’s chief program officer, praises Toledo Day Nursery for aggressively tapping into any and all public funding for families of young children. “They had the vision to make tuition free,” she said. “There are families who need child care support but don’t meet the rigid income eligibility requirements, and it’s interesting to discover how many families say: ‘You can’t tell from looking at us, with both parents working, but you can’t imagine what this financial relief means to us.’ ” 

Bugaj said she’s benefited from this program once before. “I was doing drop-off with Cecilia,” she recalled, “and I was getting closer to my due date. Julia said, ‘I wanted to let you know you won’t incur tuition for Cecilia when the baby comes.’” 

“Any family who goes on maternity leave while enrolled in our program doesn’t have to pay for 12 weeks,” Myers said. Families don’t have to bring diapers or formula for their children either. Toledo Day Nursery’s scholarships cover these costs as well. 

Before the scholarship program began, Myers said, she remembers “having a mom in my office, crying because she didn’t want to leave our community but could not afford it anymore.” That mom wasn’t alone. The cost of child care creates stress for many American families. Research shows that such financial anxiety might cause parents to withdraw their children from child care in order to save money; revealed that 27% of parents in America have quit a job or dropped out of education to avoid the soaring cost of child care. 

Between enrollment issues, staffing shortages and closures, the early childhood education system in Ohio is struggling. According to a published in 2024 by the National Association for the Education of Young Children, 54% of early educator respondents in Ohio said at least one child care program in their community had closed in the previous year, and 62% of respondents reported that their program was under-enrolled, a factor that exacerbates financial challenges.

A scholarship program like the one at Toledo Day Nursery doesn’t solve all of these systemic issues, but for some families, it makes child care affordable so they can keep their kids enrolled.

For the Bugaj family, the scholarship program is only part of the draw to the center. In 2021, when Bugaj first discovered the program via a Google search, she found it “welcoming right off the bat. I could tell when I took a site tour that it’s a calmer environment for kids. It’s a loving environment for kids.” 

Myers, who has a daughter currently attending Toledo Day Nursery and a son who recently graduated, said the pedagogy draws upon Montessori and Reggio Emilia approaches, but it’s the “school family,” as she calls this community, that explains the culture. “There’s no way for me to separate my personal life and my work life,” she said, “because my personal life is living and breathing this school.” 

As a local mother of kids in the program who has personally experienced the financial stress of raising young children, Myers proposed the idea of these short-term scholarships to aid families through unexpected financial challenges. Myers said the Bainum Family Foundation trusted her when she told them how it could help. 

In an effort to expand impact beyond her own program Myers and her colleague Chelsea Davis, who leads the program’s second location, applied to a local run by Groundwork Ohio. 

The fellowship intends to help early educators and leaders build solutions and advocate for the children and families they serve. “Myers and Davis exemplify the kind of strong, visionary leadership Ohio needs for its youngest children and families,” said Lynanne Gutierrez, the organization’s president and CEO. “We are proud to support them through the fellowship as they continue to grow their leadership, elevate the voices of families and shape a brighter, more equitable future for children in their community and across the state.”

“We don’t have to look at other countries for examples,” proclaims Mitchell. “We can make it happen here, in places like Toledo.”

Child Care Providers United — the union that represents about 60,000 family child care providers in California — has reached a tentative deal with the state after its contract expired July 1.

Under the , childcare providers in the union will get $90 million in one-time stabilization payments and $37 million a year for cost-of-living adjustments. They’ll also continue getting retirement and healthcare benefits, and be paid by enrollment rather than attendance.

Max Arias, chair of Child Care Providers United, said many home-based educators have had to  in recent years.

“ The rates are so low right now that providers are literally receiving $7 to $10 an hour after all the expenses are paid based on the amount of hours they work, and that is the crisis that we’re seeing so having some support right now was very important,” Arias said.

The fight for higher pay

In 2019, home-based childcare providers in California who get subsidies from the state to care for lower-income families  to collectively bargain with the state.

Child care providers are some of the  in the country — a recent report found that the .

Arias said the new one-time stabilization payments would amount to roughly $300-$400 a child, and that the union will continue working for a new rate system to boost the amount providers get reimbursed — which they had originally expected this year. He said the union has a commitment by the state to reach an agreement on a new rate structure by the next budget cycle. 

Historically, the reimbursement rates have been paid on “market rates,” which  because they’re based on what families pay. Experts call the child care industry a “broken market” — where the costs are too high for families to pay, but workers themselves are making too little to get by.

Arias said a new rate structure would allow for providers to get paid the  real cost to provide care.

“Then there will be true stabilization in the sense that people can actually then afford to be able to stay open,” he said.

This was originally published on .

Undeterred by the rain, a few kids play at an outdoor playground and soccer field, but most are exploring the indoor playroom, which has games, toys, art supplies and a staff that oversees these kids activities. At noon, free lunch will be served to any child who brings their own cup and spoon. Today it’s vegetarian pea soup. The city of Helsinki is footing the bill so kids and families have a reliable place to eat and play. 

Finland, like other Nordic countries, boasts generous benefits for families with children: access to free, high-quality prenatal care; an option to take up to three years of paid parental leave; heavily subsidized child care programs, which can be free for families up to a certain income threshold; and spaces like that provide play areas and free meals for families. This is in sharp contrast to the United States, which lacks a national child care infrastructure and has no federal paid leave policy. America leaves individual families responsible for arranging maternal health care, navigating parental leave benefits and sorting out child care decisions — and most of child care subsidies and meal programs are means tested and subject to political whims.

The collective-minded Finland and the individualistic United States have taken wildly different approaches to supporting families, but both leave a key population of caregivers struggling: stay-at-home parents. As seek solutions to address a declining birth rate, they may need to consider developing more support for parents who choose to stay home and care for their children.

Limited Benefits for Stay-at-Home Parents

Six months after giving birth, Virtanen went back to work as a lab technician. The decision was purely financial. She wanted to stay at home and care for her daughter, but she was the breadwinner, so her husband, Roope Jokinen took a year off from university, where he studies violin, to be their daughter’s primary caregiver. Shortly after returning to work, Virtanen cut back to part time hours so she could spend a day at home with her daughter each week, but the pay cut has been difficult for their family, especially with Jokinen still in school. Their arrangement allowed the couple to wait until their daughter was 18 months old to enroll her in a child care program, but even then, Virtanen said, it felt too soon. “It might have been easier if she was older,” she said. “She may have understood why we were taking her there.”

In Finland, stay-at-home parent benefits are primarily connected to paid family leave, meaning the time a parent can take from work to care for the birth or adoption of a child. Finland provides via Kela, a government agency that administers benefits under national social security programs. Eligible working parents who decide to care for their own children can apply to receive an income-related parental allowance based on their annual earnings. It has a sliding scale based on income and it decreases significantly after the first year. After a child turns 2 years old, this allowance ends but parents who choose to forgo paid work and care for their child at home can receive a fixed monthly child home care allowance until the child turns 3. And at any point from birth through age 3, a parent can opt for their child to attend a child care program and the cost is generously subsidized by the Finnish government. 

But even with the robust ecosystem of family policies in Finland, the economics of caregiving can create stress, especially for parents who want to stay at home to care for their children. For high earners, like Virtanen, the allowance would have been too significant a pay cut, which is why she opted to return to work. And while Jokinen qualified for the minimum allowance because he’s a student, it barely made a dent in the cost of raising a family. 

Many American families face similar pressures. While some American workers are eligible to take unpaid family leave through the (FMLA), and some states and private employers do offer a paid family leave benefit, many parents find themselves calculating the cost of care against their leave benefits and making decisions they may not view as ideal for child care. 

In the U.S., non-working parents who care for their children at home are ineligible for benefits, largely because the handful of child care policies the U.S. has implemented have had an explicit goal of boosting workforce participation. , for example, was a federally supported program that subsidized child care for working mothers during World War II. The tax policies designed to offset the costs of child care, such as the Child and Dependent Care Tax Credit, are only available to families in which both parents work. And even states like Vermont and New Mexico, which have generous and innovative child care policies, don’t provide benefits for parents who wish to care for their children.

An Evolving Policy, With Steps Toward Supporting Family Preferences for Child Care

In 2022, Finland took a step toward supporting family preferences. The , allowing them to to take up to six months of paid leave. Before that, the policy only applied to mothers. This change has challenged societal norms around gender and work, explained Miina Pakarinen. Pakarinen is currently on maternity leave with her second son, who won’t get his name until a non-religious naming ceremony in August. He goes by one of his many nicknames, including Paavo, which means pope, since he was born the day Pope Leo the XIV was elected. With her older son, who was born in 2021, Pakarinen spent 10 months at home, and had her mother care for him until he started a child care program at age 1. But with Paavo, Pakarinen is planning to return to work at an employment agency when he turns 6 months old, and then her husband will stay home for six months. 

“It’s making our society more equal,” she said of the paid leave split. “Both at home and at work, with who gets to take the time off.” Pakarinen is not interested in being a stay-at-home parent, but acknowledges that creating more choices for families is beneficial, and she’s looking forward to her husband being the caregiver when she returns to work. 

This step has helped Finland better support family choice, but the reality remains that even in a country with generous family policies and a strong child care infrastructure, the economics of child care is fraught. Heavily subsidized, high-quality child care may be a solution that works for most families, but there’s not a one-size-fits-all policy for families. And like the handful of child care policies in the U.S., most of the support requires outsourcing the care provided, with little support for families who opt to do it on their own. 

Addressing declining birth rates — a challenge Finland and the U.S. share — requires building a more robust, supportive child care system that takes into account family preferences for care. Both countries may need to consider developing family policies, tax credits and incentives that extend to parents who opt to stay home to bond and care for their babies and young children.

For Virtanen, staying at home isn’t in the cards for now. But she said she’d reconsider if she has another child, even if it comes with a financial cost. “I want to be the one caring for her,” she said.