Child care is one of the hottest topics in public discourse today, and for good reason. The pandemic magnified many of the system's longstanding challenges, from inadequate funding to inaccessible and inequitable care. The sector is finally (if a bit slowly) getting the attention it deserves, and several universal truths have emerged:

1. 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.
2. 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.
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 will reduce barriers to entry, improve efficiencies, and give policymakers the data they need to make informed decisions.

January 2025 Updates

A Continuing Resolution and $500 Million for Child Care

Four States Investigate Integrating Family Care Centers into Pre-K Systems

We have never been shy about celebrating the unparalleled success of Alabama’s First Class Pre-K program. As one of just four states in the inaugural cohort of the Enriching Public Pre-K Through Inclusion of Family Child Care (EPIC FCC) initiative, they are exploring ways to expand the participation of FCC educators in pre-k for the first time.

EPIC FCC is facilitated by the National Institute of Early Education Research (NIEER) in partnership with Home Grown. The initiative draws on two years of research and policy analysis and includes built-in technical assistance and $25k flexible planning grants for cohort members.

Child Care Matters is a longtime supporter of mixed delivery systems, which give families more choice and lead to more equitable access to quality care and education. North Carolina, Michigan, and Nevada round out the inaugural cohort for EPIC FCC.

Read: New national initiative aims to increase family child care inclusion in State Pre-K systems (Alabama Public Radio)

Alaskan Task Force Recommends Actions to Address Child Care Shortages and Costs

Back in April of 2023, Alaskan Governor Mike Dunleavy deferred action on child care funding, instead electing to form a task force to examine the issue and provide policy recommendations on the subject. Those efforts were concluded at the end of 2024 with the release of the task force’s final report.

Highlights from the 56 recommendations for action include:

• Improved data and technology infrastructure, including digital fingerprinting equipment and an online Child Care Information System
• Geographic subsidy eligibility adjustments to account for cost of living
• Child care subsidies for members of the child care workforce
• Encouragement of home-based care, especially in rural areas, and ways to make center-based models more attractive, including providing care in schools or school district buildings
• Establishment of the Tri-Share system that has been adopted by several states to split costs across government, employers, and families

The state Department of Health has already taken action on several of the task force’s recommendations. We will continue to monitor to see how many make their way into discussion during this legislative session.

Read: Task force report identifies ways to make child care more available and affordable in Alaska (Alaska Beacon)

Indiana Looks to Eliminate Voucher Waitlists

Just last month, we noted the reinstatement of waitlists for Indiana’s CCDF and On My Way Pre-K voucher programs. Governor Mike Braun’s two-year spending proposal, unveiled January 16 at the Indiana Statehouse, includes $362 million earmarked for the specific purpose of eliminating those waitlists. The budget also includes a 2% annual increase in K-12 funding.

The next step in the budget process will be hearings from state agencies. The two-year budget is expected to be finalized in April.

Read: Gov. Mike Braun proposes a modest increase for Indiana schools funding, universal vouchers, and property tax caps (Chalkbeat)

Monitoring the Future of the Child Tax Credit

One of the looming questions surrounding the current legislative session and the new administration is what will become of the Child Tax Credit (CTC) that directly impacts more than 46 million US taxpayers. The Tax Cuts and Jobs Act of 2017 (TCJA) “temporarily increased the maximum credit to $2,000 from $1,000 per child under 17 and widened eligibility with higher-income phaseouts,” (CNBC, 2025), but those increases will revert at the end of this year without congressional action.

In what is perhaps a harbinger of things to come, January saw the introduction of the Family First Act by Congressman Blake Moore (R-UT). The Act would increase the CTC to $4,200 for families with a child between the ages of 0-5 and $3,000 for families with a child between the ages of 6-17. It also includes:

• A new $2,800 tax credit for pregnant mothers
• A phaseout threshold starting at $200,000 for single-filers and $400,000 for joint-filers
• A “simplification” of the Earned Income Tax Credit (EITC) that would eliminate number of dependents from the calculation

The bill’s announcement features a description of how the cost of the bill will be offset by certain eliminations, repeals, and caps, although the American Enterprise Institute points out that this is only true if Congress fails to extend the TCJA.

ICYMI: December 2024 Updates

5 Years of Progress on State Policy

The Prenatal-to-3 Policy Impact Center released the fifth annual update to their State Policy Roadmap in October. They also published a report highlighting the investments states have made since the first Roadmap was released in 2020, and the impact of those investments.

The report offers a strong overview of nationwide progress using 12 proven policies and strategies as benchmarks. Interested audiences can view summaries for all 50 states and the District of Columbia on the easy-to-navigate website.

How does your state stack up in supporting families with young children? View the report here: 5 Years of Progress on the Prenatal-to-3 State Policy Roadmap

Iowa's Childcare Solutions Fund Passes its Pilot Test

If there was any question about the correlation between increased wages for child care providers and child care supply, Iowa’s latest effort to test the hypothesis passed with flying colors in a limited pilot run this year.

The Common Sense Institute Iowa published a lookback report on November 19 analyzing the effectiveness of the Childcare Solutions Fund pilot program, which will be expanding to 21 communities in 2025. The report showed that the program, supported by $2.88 million in ARPA funds and $2.4 million in local investments, enabled the addition or retention of 233 child care workers and opened up 275 new child care slots.

The Childcare Solutions Fund is just one of several parallel efforts underway in Iowa to increase child care supply, strengthen the workforce with an eye toward quality, and make care more accessible and affordable for families. With ARPA funds now in the rearview, there is still an open question as to how sustainable the Fund will be, with only one county (Dubuque) currently having raised enough money to fund the program at the same level next year. Considering the downstream impact to GDP and personal income (estimated at $13 billion and $6.1 billion respectively over the next ten years), the need to keep the program alive feels like a no-brainer.

Read the report here: Iowa’s Childcare Solutions Fund: A Model for Closing the Childcare Gap

Indiana Reinstitutes a Voucher Waitlist for CCDF and Pre-K

In a move that is frustrating at the moment, but ultimately a testament to the work the state has done to improve access, affordability, and quality of care, Indiana has had to reinstitute waitlists for both its Child Care Development Fund and its On My Way Pre-K voucher programs.

The vouchers support low-income families under 150% of the federal poverty level (about $45,000 for a family of four), in which parents are employed, seeking employment, or enrolled in an education or training program. The waitlist hasn’t needed to exist since 2018, but CCDF voucher recipients totaled more than 70,000 children in 2024 (up 43% since 2019) and On My Way Pre-K enrolled nearly 8,000 children (up 167% since its 2019 launch).

Read: Indiana FSSA re-implements child care voucher waitlist

Oklahoma's Licensing Requirements Under the Microscope

Oklahoma became the most recent subject of child care licensing research commissioned by United WE, following similar studies in Kansas and Missouri. With a state average of 3.5 children per available licensed child care slot, including some rural counties as high as 19.67, the need for increased supply is clear. The report, published in collaboration with Oklahoma State University, utilized both qualitative and quantitative measures to understand some of the barriers to entry faced by childcare providers.

The results of the analysis were not dissimilar from what’s been identified elsewhere in the country. Providers overwhelmingly pointed to three key themes as barriers to their licensing and quality efforts:

• Staff shortages and high turnover rates within the licensing body (in this case, the OK Department of Human Services) are a consistent cause of delays, confusion, enforcement ambiguity/inconsistency. Providers also mentioned that this leads to a frustrating lack of ownership over the licensing process.
• Providers want clearer, more accessible, and more proactive communications and processes from their licensing body. While OK does issue a comprehensive guidebook, many providers found it hard to navigate and lacking in supporting resources. Rigid licensing workflows and communication bottlenecks were another source of frustration.
• Continued incentives and improved efficiencies rounded out the list. There is some concern that a lack of economic incentive could be resulting in more “unregulated/underground” care, and inefficient processes such as slow and costly background checks are not aligned with the needs of the workforce.

The balance between safety, quality, and availability is a tenuous and sometimes conflicting one in many state ECE systems. Child Care Matters will continue to monitor and explore that discussion from every angle in the months to come.

View the report here: Understanding Access and Barriers to Childcare in Oklahoma

New York Families Get a Holiday Package of Sorts

On December 11, Governor Kathy Hochul signed a package of family-focused laws, including one that specifically expands access to child care for working parents. Child Care Matters was especially interested in two of the four laws:

1. Legislation S.4667A/A.4099A removes barriers to child care block grant funding utilization by eliminating waiting periods associated with determining eligibility. Under the new law, families who have met a presumptive eligibility standard can receive child care subsidies while their paperwork is being processed.
2. Legislation S.5992A/A.6168A guarantees access to doulas for patients admitted to a maternal health care facility. This is especially relevant in light of the aforementioned Prenatal-to-3 State Policy Roadmap, which calls out access to doulas as one of 12 policies and strategies with a proven positive impact.

Read the governor’s announcement here: Governor Hochul Signs Key Legislation to Make Raising a Family More Affordable in New York

Child Care Reform Looms in the 2025 Legislative Session

The momentum for child care investments and modernization feels stronger this year than most. Whether that’s due to the expiration of the last vestiges of pandemic relief funding or the confluence of multiple economic variables, including stagnant workforces, rapid cost increases, and a mismatch between need and funding remains to be seen. The good news is that it looks like we are poised for a rare bipartisan push for this critical and nuanced issue. Here are just a few top-of-mind examples:

Legislators in Florida and D.C. have expressed interest in increasing child care supply by “streamlining” licensing requirements, exemptions, and processes.

Georgia has already gotten the ball moving on tax credits and other plans to reduce child care costs, including the unanimous passage by a Senate study committee of a list of recommendations that are primed for legislation.

Michigan appears poised to sign both licensing and subsidy adjustments into law sooner than later, especially as the state eyes its ultimate goal of PreK for All during Governor Gretchen Whitmer’s second term.

Missouri looks ripe for investment as well, with several key opponents of child care-focused tax credits no longer in the Senate, and a Governer-elect in Mike Kehoe who has vowed to make child care a priority. Challenges remain, but progress could be on the horizon in this state where 50% of children under five are in a child care desert.

Ohio’s Thriving Families Tax Credit (HB 290) would institute a refundable income tax credit of $1000/year for each child 0-5 and $500/year for ages 6-17, with income-based restrictions. The bill is currently under review by the House Ways and Means Committee.

Texas advocacy groups are feeling relatively optimistic, especially in light of the state’s nearly $33 billion budget surplus. As covered last month, the state is seeing strong bipartisan momentum for bolstering its workforce and expanding existing grants and scholarship opportunities, among other initiatives. This is a state we’ll be keeping a close eye on in the year to come.

Utah legislators will be able to refer to the recently released Utah Childcare Solutions and Workforce Productivity Plan, which includes more than 30 recommendations to solve its child care crisis. The Plan was commissioned by the Women in the Economy Subcommittee in 2023.

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Child Care Matters is sponsored by BridgeCare, the leading data and technology infrastructure provider for government agencies and organizations working to build an ECE system that works for everyone.

Connect with one of our specialists to learn how BridgeCare can support your modernization efforts in Pre-K, subsidy management, child care resource & referral, licensing and supply, and more.