With Arrival of Child Care Cliff, Some States Have Stepped in to Save the Sector

At least eleven states and Washington, D.C. have taken action over the past two years to significantly increase public investments to stabilize their child care sectors, investing state funds directly in child care providers and early educators. Legislatures in Alaska, California, the District of Columbia, Illinois, Kentucky, Maine, Massachusetts, Minnesota, New Hampshire, Vermont, and Washington all dedicated state1 funding for grants to child care providers, programs to support their child care workforces, or other solutions that directly support providers. In addition, New Mexico became the first state to create a permanent fund for child care through a ballot initiative passed in November 2022.2These actions followed unprecedented federal investments in child care during the height of the COVID-19 pandemic. The federal funds went directly to states and demonstrated that when public resources support child care programs and the families that rely on them, providers are more stable, families pay lower prices, and children have more reliable care. Federal dollars went directly to the states to distribute to providers through the stabilization grants ($24 billion), to supplement the Child Care Development Block Grant (CCDBG) ($28.5 billion), and to support Head Start ($1 billion). These funding streams either expired, or will expire this year, leaving families and care providers facing a child care cliff absent new funding.