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Child Care Subsidies and Quality

In 2022, 26 states enacted 80 bills to address access and affordability of child care. States continued to spend down federal pandemic relief funds to increase access to child care, reduce the costs for families, and provide financial support as well as retention and training incentives to care providers and educators. In some states, the use of funds is determined by the child care agency. In others, as noted in the examples below, the designated use for funds is established through states’ budgets.

Increasing the supply of child care

While accessing child care is a nearly universal struggle throughout the country, some states targeted their efforts to boost child care for the most underserved populations. Care for infants and toddlers, for instance, is often the least accessible and most expensive type of child care. State lawmakers in California, Michigan and New Jersey passed legislation to increase access to infant and toddler care for low-income families. California (A 185) raised reimbursement rates for infant-toddler care providers, while Michigan (H 5044) soon will contract with providers to reserve space for families using subsidies to help pay for infant-toddler care. The contracts will require higher wages and payments to providers in advance of care, as well as commitments to ongoing quality improvements. New Jersey’s Thriving by Three Act (S 2476/A 4179) appropriated $28 million in grants to child care providers, Head Start and school districts to purchase equipment, recruit and compensate staff, and increase their capacities to care for infants and toddlers.

The Illinois Legislature passed H 1571 to create the Off-Hours Child Care Program Fund. Pending an appropriation, the fund is designed to address the child care needs of firefighters, paramedics, police officers, nurses and other third shift workers who often work non-typical work hours.

In 2022, at least 10 states passed legislation modifying child care licensing requirements to improve quality and/or reduce regulatory burdens for child care providers. Four of those states—Indiana (H 1222), Michigan (H 5041), Missouri (S 683) and Utah (H 15)—expanded the number of children certain providers can care for at once.

Policymakers in at least four states targeted infrastructure and facility use as a means of increasing child care availability. Maryland (H 993/S 919) created the Child Care Capital Support Revolving Loan Fund to provide no-interest loans to child care providers serving families eligible for subsidies. Loans can be used to acquire, expand and renovate child care facilities. The bill also includes a $15 million appropriation for fiscal year 2023. Hawaii (S 3110) established the Child Care Grant Program Special Fund, which will be funded through donations, legislative appropriations, fund earnings and other revenue sources. Proceeds from the fund will pay for grants to expand existing or create new child care facilities. Virginia (S 69) banned landlords from prohibiting licensed child care operations within rental agreements, and Colorado (H 1006) allows property used to operate a qualified child care center for strictly charitable purposes to be exempt from levy and property taxes.

Reducing costs to families

The national average cost of child care is $10,600 or at least 10% of a married couple’s average annual income and 35% of a single parent’s income. To reduce child care costs for families, legislators in Illinois, New York and Maryland approved measures to expand eligibility for child care assistance. Illinois (H 4242) extended eligibility to certain parenting youth regardless of income and waived work and education requirements. New York (S 8000) allowed families earning up to 300% of the federal poverty level to qualify for assistance and capped copayments at 10% of family income. Maryland (H 995/S 920) simplified the application process for parents seeking child care assistance and established “presumptive eligibility” so families can receive financial support while eligibility is being determined. The bill also allows for faster reimbursement payments to child care providers, removes requirements for applicants to comply with child support enforcement and waives copayments for families receiving other forms of public assistance. Maine (H 1316) also approved waiving copayments for recipients of the Temporary Assistance for Needy Families program.

Legislatures also created new incentives for employers to create or expand child care availability for employees. Examples include matching funds, grants and tax credits. Kentucky (H 499) reduced child care costs for some qualifying workers by leveraging matching funds from employers and $15 million in state general funds. Colorado (S 213) incentivized employers to increase the supply of child care by offering grants for the creation of onsite child care facilities. West Virginia (S 656) provided employers with a 50% tax credit during the first year they provide onsite child care for employees and a 20% tax credit for up to five years thereafter.

Early Care and Education Workforce

Increasing the supply of child care depends upon retaining current and recruiting new child care professionals to the field. Eighteen states enacted 24 bills aimed at supporting the early childhood workforce.

Compensation

States are required to spend a portion of federal pandemic relief funds on direct support to child care providers through stabilization grants. Increased discretionary funds through the federal Child Care Development Block Grant allowed states more flexibility to address their child care needs. Many states allocated these federal funds for recruitment and retention bonuses for child care professionals and to raise reimbursement rates for providers serving families eligible for child care assistance. Legislators in Colorado (S 213), Maryland (H 1100) and Utah (H 15) approved bonuses for child care professionals, whereas Massachusetts (H 5050), New York (S 8000) and Louisiana (H 1) are among the states that raised reimbursement rates in their states’ budgets.

Other legislative efforts to address low pay include Colorado’s (H 1010) early childhood educator tax credit, the District of Columbia’s (B 632) pay parity grant program and Maine’s (H 1482) continued wage supplements. Colorado’s tax credit will provide between $750-$1,500 in financial relief to qualifying early childhood educators. D.C.’s legislation, the first of its kind in the country, will use revenue generated from a new tax on high-income earners to provide pay parity between early childhood educators caring for children ages birth to 3 and those working in the district’s publicly funded prekindergarten classrooms. Maine will use state dollars to continue $200 monthly wage supplements to child care providers in licensed settings that were previously supported with federal funds.

Connecticut (S 408) requires its commissioner of economic and community development to identify the economic barriers for people seeking to open child care centers, group child care homes or family child care homes and to create a plan to address those barriers.

Home-based child care

More than 7 million children under the age of 5 are cared for in home-based settings. Child care providers operating in a home may be licensed or unlicensed, paid or unpaid and can include care by a family member, friend or neighbor. These care providers face unique challenges and may not qualify for the supports or incentives aimed at center-based providers. Lawmakers in Colorado and Michigan passed legislation this year to offer support to home-based providers.

Colorado (S 213) created an advisory group to recommend revisions to regulations, policies, procedures and funding for family, friend and neighbor child care. The bill appropriates $7.5 million to create a training and support program to provide culturally competent and research- and community-informed materials, training and resources for providers. The program also will offer technical assistance to help providers navigate the state licensing system, access state funding and services, connect to after-school programs and navigate career-advancement opportunities. Michigan (H 5043) established family child care networks throughout the state. The legislation directs the state's Department of Education to convene stakeholders to develop a framework for family child care networks based on the needs of providers. Family child care networks must offer or connect home providers to services, including business and operational supports, connection to peers and training, professional development or individual coaching.

Preparation for early childhood educators

State policymakers in at least four states enacted changes to early childhood educator qualifications and professional development requirements.

North Carolina (H 159) expanded its list of approved opportunities for obtaining a state early childhood credential. The credential can now be earned through college-level coursework, credentialling from approved professional organizations or by demonstrating competency through an exam or other means determined by the state's Department of Health and Human Services. The bill also removed the requirement that an educator working toward an associate degree must complete a minimum number of hours per semester to work as a teacher assistant. The bill further requires the use of certain funds for professional development and support to public school teachers who work with students with disabilities ages 3 through 5.

Utah (H 290) requires lead teachers in a high-quality school readiness program hold at least a child development associate certification or an associate or bachelor's degree in a field related to early childhood education by their second year of teaching. The bill also requires ongoing professional development and coaching for early childhood educators.

Legislatures in two additional states modified professional requirements for early childhood educators. Arizona (S 1159) requires early childhood educators to complete a minimum of 45 classroom hours, three college-level credit hours or the equivalent in research-based science and reading instruction within three years of earning an early childhood education certificate. Virginia (H 319/S 616) mandates that preschool educators receive high-quality professional development and training in science-based reading research and evidence-based literacy instruction.

Prekindergarten and School Readiness

Along with child care, legislators continued to support the academic, social and emotional development of young children to ensure successful entry to kindergarten and beyond. Fifteen states enacted 25 bills, most of which expanded prekindergarten or authorized studies of prekindergarten expansion.

At least three states expanded prekindergarten programs and services. Colorado (H 1295) created the Colorado Universal Preschool Program, a high-quality statewide mixed-delivery system of preschool providers offering voluntary programming to all children and additional services for children from low-income families. Louisiana (S 47) requires each city, parish or other local public school board to develop a mixed-provider delivery model to offer full-day, year-round, high-quality prekindergarten instruction to each eligible child within the boundaries of the school district. Tennessee (H 2709/S 2595) allows a local education agency to establish a voluntary prekindergarten program to comprehensively address the cognitive, physical, social and emotional needs of at-risk children. The bill defines eligible children as those up to age 4 whose family income meets eligibility requirements for free or reduced-price lunch or whose parent died, is a prisoner of war or went missing while serving honorably as a member of the United States armed forces.

At least two states enacted legislation to explore an expansion of their prekindergarten programming. California (A 185) established a workgroup to recommend best practices for increasing access to high-quality universal preschool programs and providing equitable learning experiences through a mixed-delivery model. Hawaii (SR 7/SCR 13) requested a feasibility study to establish a universal, no-cost prekindergarten program for children and families.

Early Childhood Governance

State early childhood programs often involve more than one state agency, resulting in fragmented governance and service delivery models. In 2022, 18 states and Washington, D.C. enacted 31 bills to establish advisory councils, boards and study committees, often aimed at streamlining service delivery and accountability.

On the heels of establishing the Missouri Office of Childhood within its Department of Elementary and Secondary Education in 2021, this year Missouri (EO 22-01) established the state’s Early Childhood State Advisory Council. The council will conduct periodic statewide needs assessments related to the quality and availability of early childhood programs for children birth through school entry and address opportunities and barriers to better coordinate federal and state funded early childhood programs. The council will also develop recommendations to address increasing overall participation in programs, establish a unified data collection system and increase professional development for early childhood educators.

To elevate the importance of early learning and care programs, Indiana (H 1093) expanded and restructured its Early Learning Advisory Committee. The committee now includes additional early childhood education stakeholders and is tasked with creating developmental and educational goals for children in the state’s early learning system. Additionally, the committee must design and maintain progress metrics, determine if state licensure requirements create an equitable standard for health and safety across all early education program types, support the sustainability of the early learning system and tackle early educator labor shortages by designing early education workforce strategies.

Early childhood system structures, administration and oversight are also top of mind for many state policymakers. A common first step to consider potential changes is creating a study or working group. Rhode Island’s (H 7123) appropriation bill created an early childhood governance working group to make recommendations about the coordination, administration and organizational structure of early childhood programs and services. The working group will be convened by the chair of the children’s cabinet, and the state’s existing early learning council will serve as the advisory body. Items to be explored include whether, and under what circumstances, the state should consider unifying early childhood programs under one state agency, the fiscal structure of proposed recommendations and the implementation of an integrated early childhood data system for strategic planning and program execution and evaluation.

Other Notable Trends (Paid Family Leave, Home Visiting and Early Childhood Mental Health)

The well-being of children is inextricably linked to their parents’ or caregivers’ well-being. States across the country continue to explore and enact legislation that enhances parents’ abilities to support children’s healthy development. Policy and program solutions including home visiting, paid parental leave and other two-generation strategies help support the health, welfare and future success of children and families.

Paid Family and Medical Leave

This is the second year NCSL tracked and monitored paid leave legislation with an eye toward parental leave. In 2022, approximately half of the states introduced bills. At least five states codified paid leave policies this year, which was an increase from the previous year. Consistent with NCSL’s previous research of paid family leave laws, states exercised a great deal of latitude in how they designed their programs.

Delaware (S 1) and Maryland (S 275) created statewide paid family and medical leave insurance programs, which, among other things, include parental leave to bond with a new child. Paid leave benefits begin in Maryland in 2025 and the following year in Delaware. Both will be funded by employee and employer contributions.

In Maryland, to qualify for 12 weeks of paid parental leave after the birth, adoption, foster placement or kinship care to bond with the new child, employees must work at least 680 hours over the 12 months immediately preceding the leave. The wage supplement in Maryland will be on a sliding sale of up to 90% of workers’ incomes.

Delawareans who have been employed for at least 12 months and have worked for at least 1,250 hours are eligible to receive 12 weeks in one year to care for a new child. If both parents work for the same employer, then they can only take up to 12 weeks combined. The maximum weekly benefit in Delaware is 80% of the employee’s average weekly wage rounded to the nearest dollar, and during the first two years of the benefit program (2026 and 2027) the maximum weekly benefit is capped at $900.

Other bills, such as South Carolina’s (S 11) and Utah’s (S 100), have a narrower focus limiting who qualifies, how long paid leave can be taken and what life events make an employee eligible to receive the benefit.

Under South Carolina’s new paid parental leave policy for state employees, which took effect Oct. 1, parents who welcome a new child via birth or adoption are eligible for six weeks of paid leave for primary caregivers and two weeks for secondary caregivers. In addition, state employees who foster a child will receive two weeks of paid leave. Eligible state employees do not have to use their paid vacation or sick days before taking paid parental leave.

State policymakers in Utah enacted a paid parental and postpartum recovery leave program for state workers after the birth, adoption or being named a legal guardian of a minor child. To qualify, employees must work part-time or more than a 40-hour work week or its equivalent. Paid postpartum recovery leave runs consecutively with parental leave and both provide three paid weeks that must be used in a continuous period only once in 12 months.

Virginia took a different approach than all previously mentioned states by enacting bipartisan legislation (H 1156/S 15) authorizing insurance companies to offer policies employers can purchase to provide paid leave benefits for their workers. The new law, which went into effect in July, includes neither an employer mandate nor a payroll tax.

Not to be outdone, nine states that already had paid leave laws—CaliforniaColoradoConnecticutMassachusettsNew JerseyNew YorkOregonRhode Island and Washington—and the District of Columbia enacted legislation refining or studying their program. For example, New York (A 10224), currently on the desk of the governor, directs the state's commissioner of labor to study the current use of paid family leave and offer recommendations on how to increase access and visibility of the program. Oregon (S 1515) and Washington (S 5649) made minor adjustments to their existing policies. Oregon clarified its benefit year, and Washington added time away from work during the seven days following the death of a family member as a qualifying event. In addition, Washington now requires its Office of Actuarial Services to report annually to an advisory committee on the experience and financial condition of the family and medical leave insurance account, and report quarterly on premium collections, benefits payments and any other program expenditures.

Home Visiting and Supports for New Parents

In recent legislative sessions, state policymakers have been looking into offering universal, voluntary and cost-free postpartum home visits by nurses to all new parents. In 2022, New Jersey (S 2023) allocated over $10 million to their universal home visiting program enacted the year prior. Oregon (S 1555) clarified rules addressing provider reimbursement for the universal home visiting program it enacted in 2019. In the same budget bill, New Jersey also allocated another $10 million to its existing home visiting programs already operating in the state.

Beyond home visiting, states took other actions to support new parents. For example, Vermont’s (S 91) Parent Child Center Network provides children, youth and families with strength-based, holistic and collaborative services with a focus on early childhood education and prevention services. The bill will provide funding to authorized parent child centers, help develop accountability measures and create an advisory committee to meet regularly. Understanding how inextricably linked parent well-being is to child well-being, Louisiana (H 784) and other states now provide pregnant women and their family members with information about perinatal mood and anxiety disorders, including how to recognize symptoms, treatment options and other available resources. Hawaii (S 3111) established and funded a pilot program within its Department of Humans Services to develop and implement school- and community-based family resource centers. Such resource centers offer a suite of services for children and their families, including programs to enhance children's development, improve parenting skills and provide community referrals.

Early Childhood Mental Health

With families, young children and the early childhood education workforce facing increased stressors born out of the COVID-19 pandemic, legislatures responded with support for mental health needs. With this newer and growing trend, five states enacted eight bills specific to infant and early childhood mental health that establish or investigate consultation programs or financial support to an existing program.

Addressing the needs of both children and caregivers, Maryland enacted multiple bills related to early childhood mental health. H 513 established an infant and early childhood mental health support services program to train early childhood educators and caregivers to address children’s challenging behaviors and promote positive mental and behavioral health practices for young children experiencing developmental, social, emotional or behavioral issues. Additionally, H 725 and S 506 established grant programs to support providers of specialized child care and early education to children under age 6 with developmental delays; physical disabilities; or delays in social, emotional or behavioral functioning.

Maine (S 220) expanded its statewide voluntary early childhood consultation program and also allocated nearly $1.5 million in funding for the program for the 2022-2023 fiscal year. The program provides support, guidance and training to early childhood educators, families and foster parents of infants and young children exhibiting challenging behaviors that put them at risk for learning difficulties and removal from early learning and education settings.

Rhode Island (S 2614/H 7801) required the executive office of health and human services to establish a task force to develop a plan benefiting children ages birth through 5, their families and the workforce. To strengthen families, the plan will identify parenting support programs that promote social and emotional well-being and will address intergenerational effects of racism, economic insecurity and toxic stress that influence mental and physical health. To support the workforce, the plan will establish a registry of trained infant and early childhood mental health professionals and strengthen their skills, knowledge and practices across the health care, mental health care, early childhood and child welfare service fields.

Legislatures also considered opportunities to reduce adverse childhood experiencesIdaho (HCR 29) encouraged state employees who interact with vulnerable children and adults to gain a deeper understanding of ACEs and implement evidence-based interventions to cultivate resiliency. New Hampshire (S 444) established a pilot program with a statewide network of mental health professionals to provide evidence-based prevention, assessment, diagnosis and treatment services for families with children ages birth to 6 who have experienced ACEs or who are considered at risk. 

You can find bills related to early childhood mental health by searching for legislation under the ‘Prenatal, infants and toddlers’ category in NCSL’s Early Childhood Legislation Database.

A Look Ahead

As federal COVID-19 relief funding nears an end and workforce shortages continue, child care (availability, affordability and workforce) will likely remain on legislators’ minds in 2023. In response to the strain of the COVID-19 pandemic on children and their families, NCSL anticipates policymakers will continue discussing strategies to address bipartisan concerns about declining behavioral health, early childhood mental health and family financial security. These complex and interrelated early childhood issues provide legislatures with opportunities to improve child and family well-being.

Related Resources

Child Tax Credit Overview

The federal government and twelve states offer child tax credits to enhance the economic security of families with children, particularly those in lower- to middle-income brackets.
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