Child care is one of the hottest topics in public discourse today, and for good reason. The sector is finally (if a bit slowly) getting the attention it deserves, and several universal truths have emerged:

1. The ROI for early childhood investment is staggering. From a purely economic standpoint, few investments pay off as strongly or as consistently as early childhood. The National Forum on Early Childhood Policy and Programs estimates returns between $4 and $9 per every $1 invested in high-quality early childhood programs.
2. Child care is a bipartisan issue. Although specific strategies and priorities may differ from right to left, all of society benefits from well-funded and well-functioning early care and education systems.
3. Child care is ripe for modernization. We’re not going to see sustainable gains by pouring more money into the old way of doing things. Better data and technology infrastructure can reduce barriers to entry, improve efficiencies, and give policymakers the data they need to make informed decisions.

June 2025 Updates

Expansion of Three Child Care-Related Tax Credits Added to Senate Version of Budget Bill

Senator Katie Britt, R-Ala., led the effort to include updates to three vital child care tax credits in the Senate Finance Committee’s draft legislative text for their version of the budget reconciliation legislation. The House version previously passed on May 22 without these updates. The expansion would increase the maximum contribution to the Dependent Care Assistance Plan (D-CAP) to $7,500 from $5,000; increase the maximum credit for the Employer Provided Tax Credit (45F) to $500,000 and $600,000 for large and small businesses, respectively, and increase the Child and Dependent Care Tax Credit for working families.

The bill still has to work its way through additional hurdles and negotiations, but there is optimism that the final package will include these provisions.

Read: FFYF’s Sarah Rittling on proposed expansion of child care tax credits (First Five Years Fund)

Connecticut Governor Signs Milestone ECE Package into Law

Connecticut ended its legislative session with a bang, passing a series of early care and education-focused bills in its last month that have since been signed into law by Governor Ned Lamont. In tandem, House Bill 5003, Senate Bill 1, and House Bill 7288 address everything from child care funding assistance to pay parity, facilities grants, and consolidation of family-facing resources. Highlights include:

• A $300 million Early Childhood Education Endowment funded annually by the state's unappropriated budget surplus
• A centralized, online family portal for resource and referral, payments, openings and enrollment, and assistance programs
• An $80 million Child Care Facilities Grants Program for facility improvement
• Fully subsidized child care and preschool for parents making under $100,000 and a 7% cost cap for those in higher income ranges

Per CT News Junkie, Office of Early Childhood Commissioner Beth Bye said “[This legislation] will make childcare free or affordable for tens of thousands of families and provide a portal where parents can find affordable childcare in their community…As the endowment grows, it will reach more communities and more families.”

The bills combine to represent the most significant state action on ECE we’ve seen this year. SB 1, which started as a universal pre-K endowment (highlighted here in February), but evolved through negotiation to include all ages birth-five, faced criticism from Republican lawmakers for its reliance on potentially unsustainable surplus funds.

Read: Lamont, Educators, Lawmakers Celebrate ‘Transformational’ Childcare Legislation (CT News Junkie)

Crucial Stabilization Funding Set to Expire in Wisconsin

Wisconsin’s Child Care Counts program has been through a whirlwind few months in the state legislature. The supply-centered stabilization fund, which began in March 2020, helped increase access to high-quality care for Wisconsin families while providing workforce recruitment and retention benefits to providers. Per the Wisconsin Department of Children and Families, 83% of the state’s providers use the funds for operating expenses, nearly half used it to offer financial assistance to families, and over 80% paid out staff bonuses or stipends with it.

Unfortunately, Child Care Counts has relied heavily on American Rescue Plan Act of 2021 funds that have since expired. Round 5 of the Stabilization Payment Program ran through the end of June 2025. Governor Tony Evers initially asked for nearly $500 million in his budget proposal to keep the program alive, but that was slashed by the Joint Finance Committee in May. Now, Democratic lawmakers are hoping to find a new path forward by introducing the legislation separately outside of the budget proposal.

As many as 25% of providers have indicated that they are “somewhat” or “more likely” to close if the stabilization funding stops, and more than a third have said they are somewhat likely to close classrooms or reduce capacity or hours. That’s a supply hit that the state, which already ranks near the bottom of the country in early care and education funding and has an estimated 48,000 children waitlisted for care, simply can’t afford.

Read: Wisconsin Democrats unveil $480M child care plan after budget cuts (The Center Square)

Big Tri-Share Updates in Three States

Ohio’s efforts to stand up their version of Tri-Share, called the Child Care Cred Program, did not survive Senate cuts. Per the Ohio Capital Journal, Policy Matters Ohio supported the removal of the model, “citing ‘lackluster results’ from comparable programs in other states.

Read: Child care programs take hits in Ohio Senate budget, even a Republican-supported one (Ohio Capital Journal)

Michigan, Ohio's neighbor to the north, continues to lean into their flagship Tri-Share program, with the Michigan Department of Lifelong Education, Advancement, and Potential (MiLEAP) announcing income eligibility expansion up to 400% of the federal poverty level, up from 325%. The move will make Tri-Share accessible for employees who previously made too much to qualify, but still struggled with the high cost of child care. It’s also likely to draw additional interest from higher paying employers who may not have seen as much value in the program with the lower caps.

Read: MiLEAP Expands MI Tri-Share Child Care Program to Support More Working Families (michigan.gov)

In Indiana, the recently rebranded Northeast Indiana Early Childhood Coalition launched Tri-Share Plus, funded by grants from the Northeast Indiana Strategic Development Commission. Perhaps not coincidentally, the program will be available in the region of the state that shares a border with Michigan. Tri-Share Plus is launching with eight participating employers.

Read: Local early childhood coalition unveils new branding, cost-sharing program (21 Alive News)

Two New Reports to Know About

RAND published a report in May titled Pre-K Teacher Well-Being, Pay, and Intentions to Leave in 2024. The report features findings from “the first American Pre-K Teacher Survey” issued in March and April 2024. It’s an eye-opening, often grim overview of the overworked, underpaid, and tenuous nature of the pre-K profession. Importantly, the survey did not include pre-K teachers in non-public settings, the vast majority of whom are facing those same issues on an even larger, more exasperating scale.

Child Care Aware of America released the results of national polling conducted by the bipartisan research team of New Bridge Strategy and Hart Research showing that parents are struggling to make child care work. The report, Families Demand Child Care Investment: What Parents Need Policymakers to Know highlights three key findings:

1. The child care landscape is a complex patchwork, with many families using multiple arrangements to meet their needs
2. Finding quality, affordable child care is a problem for most parents, a fact that was especially true for mothers, stay-at-home parents, rural families, and those with lower incomes
3. There is broad, bipartisan support for child care investment; 81% of parents say that expanding access to affordable, quality child care should be a top or high priority for both federal and state policymakers

We urge our readers to familiarize themselves with both reports and use the updated data in support of any ongoing advocacy efforts.

Other Developments Throughout the Country

ICYMI: May 2025 Updates

All Eyes on Appropriations and Budget Reconciliation

The release of the administration’s “skinny budget” on May 2 set the tone for a national conversation that has dominated the news cycle in the weeks since. While many ECE professionals and advocates celebrated the exclusion of feared cuts to Head Start or CCDBG in the proposed budget, that collective sigh of relief was tempered by looming cuts to other key early learning programs against the backdrop of threats to the country’s most significant social safety nets.

These new recommendations, paired with the previously issued instructions to House committees to find over $2 trillion in cuts that will largely have to come from Medicaid, Medicare, and SNAP, would have a more devastating impact on early care and education than anything we’ve seen since the pandemic.

Some of the key budget exclusions that will affect the ECE sector if codified include:

• The end of the Preschool Development Grant Birth through Five (PDG B-5), which has been leveraged by 47 states and territories since 2018 to support early care and education workforces, integrate governance structures, maximize family engagement, and more. Read: A Selection of State Accomplishments During the First 3 Years of PDG B-5 (First Five Years Fund, 2024)
• The end of Child Care Access Means Parents in School (CCAMPIS) grants, a 2+ decade-old program that funded campus-based child care services for low-income students at higher education institutions.
• $6 billion in cuts to K-12 education, with flat funding for the Individuals with Disabilities in Education Act (IDEA) despite rising demand for services, including early intervention.

Those things will, unfortunately, end up looking like a drop in the bucket compared to the looming, deep cuts to both Medicaid and SNAP. Not only will these make child care even less affordable for many low-income families, they will also drive a large percentage of the early care and education workforce, 43% of whom rely on government assistance programs, even further into poverty and/or directly out of the profession. It’s worth noting that Medicaid also covers critical prenatal care, and is associated with lower infant and maternal mortality rates. It’s also a crucial lifeline for many rural hospitals and medical centers. The list of both direct and indirect impacts on every family with young children is significant enough that we can’t even begin to cover it here.

Additionally, the proposed addition of work requirements to Medicaid would put 36 million more people at risk of losing their health coverage, not because they aren’t already working (an overwhelming number of enrollees are either working or unable to work), but because of the additional administrative red tape such a requirement would add. For fellow fans of evidence-based policy, yes, we have tried this before. Every attempt at the state level has been a spectacular failure. And no, work requirements haven’t led to employment gains, only a loss of insurance for tens of thousands at a cost of millions.

Fiscal responsibility is important. But, when you realize that we could save even more money ($2.4 trillion over ten years) by simply allowing unnecessary tax cuts for households making over $400,000/year to expire, the whole thing feels punitive. Not to mention the fact that the One Big Beautiful Bill Act would add $2.3 trillion to the deficit over 10 years. The math just isn’t mathing for the average American family.

• Read: What a Better Tax Bill Would Look Like (Center on Budget and Policy Priorities)
• Read: Proposed SNAP Cuts: The Health and Economic Impact on Families With Young Children (Food Research & Action Center)

The Clock is Ticking on $14M Child Care Investment in Alaska

Alaska’s child care system is hanging by a thread (all puns aside, we are big fans of thread, an organization that has done so much for AK’s ECE ecosystem). The state has lost one quarter of its child care providers in the past three years, and current estimates put the number of children who lack access to care at over 23,000.

Prospects for some level of stabilization were looking strong when the House passed its version of the budget with nearly $14 million split between grants for providers and subsidies for families, but that money is nowhere to be found in the Senate’s working draft budget. With fewer than three weeks left in the regular legislative session, there is some sense of urgency to at least maintain, if not expand, ECE funding levels. This is a situation we will be monitoring right down to the finish line.

Read: Alaska child care advocates urge the Legislature to keep $14M in budget for sector in crisis (Anchorage Daily News)

Mississippi Eyes Unused TANF Funds for Voucher Program

In a scene that has been playing out throughout the country as the last vestiges of pandemic relief funds dry up, Mississippi finds itself in a bit of a bind. The state’s child care certificate program has become unsustainable with no replacement funding source lined up. As a result, the Department of Human Services (DHS) stopped accepting new applications, redetermination applications, and “add a child” applications indefinitely back in March.

Now, child care providers, advocates, and families are urging DHS to tap into more than $150 million in unspent TANF grant money to fully fund the child care subsidy program. At a late-April press conference, representatives from ECE organizations across the state implored DHS and political leaders to take action or risk thousands of Mississippi children losing access to care.

We’re only a year removed from the incredible "Mississippi (don’t call it a) Miracle” gains on the 2024 National Assessment of Education Progress (NAEP). This is a state that understands the value of investment in early care and education. The focus now shifts to whether they can enact a strong long-term solution to keep the child care certificate program funded.

Read: Parents and providers urge state to use unspent TANF grants for child care (Mississippi Today)

Reintroduction of Two Bicameral Bills Strengthening CACFP

The Child and Adult Care Food Program (CACFP) has been a financial and nutritional lifeline for both center-based and family child care programs dating back to 1968, serving more than 4.4 million children each day. Although that number looks impressive, it still reflects massive underutilization. A 2024 nationwide study of the program found that just 36.5% of licensed child care centers participate, with numbers as low as 15.2% in some states. Providers cited a lack of awareness and administrative burdens as the primary reasons for non-participation.

The Child Care Nutrition Enhancement Act of 2025 (H.R.2859 and S.1420) calls for a 10% increase for all eligible meals and snacks at CACFP-participating programs, a streamlined reimbursement system that provides equal rates to all types of providers, and an allowance for FCC providers to be reimbursed for their own children, regardless of income level.

The Early Childhood Nutrition Improvement Act of 2025 (H.R.2818 and S.1447) goes even further, adding another reimbursable meal for providers who are open more than eight hours, streamlining payment policies, simplifying reporting requirements, and creating accountability for modernization and paperwork reduction.

Read: Reintroduction of Bills Offering Needed Updates to Child Care Food Assistance Program (First Five Years Fund)

Other Developments Throughout the Country

Iowa failed to get Governor Kim Reynolds’ child care infrastructure bill, Senate File 445, across the line before adjourning their 2025 legislative session. The bill, which received criticism for shifting money from existing sources rather than providing any net new funding, will have to wait another year.

The Missouri Senate took up a bill that would have infused $70 million per year in tax credits into the child care system via three separate programs, including direct credits to families, an employer-provided child care assistance tax credit, and a supply-focused credit for providers’ capital expenditures. The bill was blocked by Republican filibuster and set aside after three hours of debate.

Nevada Governor Joe Lombardo called for up to $12 million in tax credits to build child care facilities in his economic development bill. The stated goal of the transferable credit is to support working families and enhance workforce stability.

North Carolina is considering loosening regulations and decoupling subsidy payments from quality ratings in an effort to keep supply levels sustainable as stabilization grants come to an end.

North Dakota Governor Kelly Armstrong signed a bill that allows employers to claim a tax credit of 50% for child care stipends offered as part of a benefits package. The credit incentivizes employers to do more to alleviate the growing cost of care in support of both recruitment and retention.

A West Virginia nonprofit is leading a grassroots approach to build a child care cooperative model throughout the state after its legislature failed to pass meaningful child care legislation in the 2025 Session. Task forces are being set up in multiple counties to bring business and community leaders into the fold in an effort to create a sustainable system for child care providers.