May 2026 · Child Care
In the United States, child care is a textbook market failure: unaffordable and inaccessible. Costs remain high, yet workers remain consistently underpaid. In Fair Care Marketplace, the Center for the American Family reenvisioned the care economy at the state level, combining the need for not only child care, but elder and disability care in one fair market exchange. While the president has said the federal government “can’t take care of day care,” more state and local governments are finding their own solutions to this critical problem. This article outlines the landscape of child care in the US, distinguishes the most ambitious programs, and asks critical unresolved questions to determine whether these advances will hold.
New Mexico leads with fully universal, income-blind child care, the nation’s first, implemented November 1, 2025. The program, funded by the Land Grant Permanent Fund, a century-old endowment seeded by oil and gas revenues, was amended by a 70% voter supermajority in 2022 to direct over $300 million annually toward early childhood. Still, just because a state has committed to universal child care does not mean every child in need has a spot. When New Mexico launched its universal program, the state had only 32 licensed slots for every 100 children under the age of two. In Santa Fe County, that ratio dropped to 18 per 100. In some rural counties, licensed infant care remains essentially nonexistent. The state has responded by launching its Infant and Toddler Contracted Slots Pilot Program, targeting 1,400 new spots for children aged 0–2, along with a $12 million low-interest loan fund for construction and renovation, and higher reimbursement rates for providers serving infants. New Mexico’s case illustrates a broader pattern: demand-side reform consistently runs ahead of supply-side reform, and infant care is where that gap is widest.
Connecticut and Vermont have near-universal programs with broad income thresholds and dedicated funding mechanisms. Connecticut’s SB1 in 2025 used budget surpluses to establish a $300 million Early Childhood Education Endowment with the intent to grow its funding annually. Vermont’s program, initiated by its 2023 Child Care Bill (Act 76), is funded by a 0.44% payroll tax, shared by employers and employees, generating stable revenue.
A second tier of states (New York, Massachusetts, Minnesota, Colorado, Maryland, Michigan, Maine, and Virginia) have made strides expanding subsidies but have yet to achieve universal coverage. At the municipal level, New Orleans, San Francisco, New York City, and Washington, DC are creating their own solutions shy of state reform.
The State of Child Care in the US
States and cities enacting universal or expanded free child care · Click any highlighted state or city dot for details · Data as of May 2026
Whether or not these investments will endure depends on the sustainability of their funding. Programs with protected revenue streams are more likely to remain, regardless of elections, economic cycles, and annual budget negotiations. For example, Maryland’s $20 million investment in Child Care Scholarship funding for 2026 is significant, but it is also reversible. New Mexico, Connecticut, and Vermont’s protected funding streams ensure their programs are built to last.
On the city level, voters in New Orleans approved a property tax increase in 2022 that raised the child care program budget from $3 million to $21 million per year for twenty years. Louisiana matched this local revenue, giving the city $42 million annually. The program added more than 1,000 child care slots for low-income families in its first operational year, with an explicit focus on infants and toddlers.
What is notable in New Orleans is not just the scale of the investment, but also its structure. The 20-year voter-approved levy is more durable than most state budget line items, and the local-state funding match doubles the city’s investment — incentivizing states and local governments to work together. For those considering municipal strategy, particularly in states where legislative action is blocked, New Orleans demonstrates that ballot measure campaigns targeting voters directly can achieve enduring results that legislative lobbying may not.
The child care workforce crisis impacts every effort to expand child care coverage. As of late 2023, the child care sector had 40,000 fewer workers than before the pandemic. Based on pre-pandemic growth projections, more than 150,000 people are effectively missing from the field. A primary factor in sluggish workforce growth is low wages. Wages for early childhood educators grew just 4.6% over the past several years, trailing the 4.9% national average and far behind the 5.2–6.8% wage growth in retail and fast food, sectors with comparable starting wages.
Programs like New Mexico’s prioritized workforce investment as infrastructure. New Mexico’s child care workforce grew 64% between 2019 and 2024 (compared to national declines) and wages grew 65%: the steepest rate in the country. This didn’t happen accidentally; it was the result of a $3 per hour wage increase sustained with ARPA funds and then made permanent with state dollars, combined with an enhanced reimbursement rate for providers who pay staff at least $18 per hour.
Connecticut’s SB1 also includes health insurance subsidies for child care workers, making its benefits package the most comprehensive of any 2025 legislation. States investing solely in family-side subsidies without addressing provider economics risk addressing only part of the equation of a durable child care economy.
Immigration enforcement has put additional strain on the child care workforce. One in five child care workers in the United States identifies as an immigrant. A study published in late 2025 found that the escalation in ICE arrests since January 2025 led to 39,000 fewer foreign-born child care workers nationally. With these exacerbating economic and political forces, investment in the child care workforce is essential to meet demand.
Infant and toddler care is the most difficult child care to fund and supply. Mandatory staff-to-child ratios of 1:3 or 1:4 for infants (versus 1:10 for preschoolers) mean significantly higher labor costs per child. Infant care is financially unviable without substantial subsidy, yet most universal and expanded programs prioritized children aged 3–5, where costs are lower and political wins are more visible. Expanding public elementary schools to add a Pre-K classroom, for example, is less resource-intensive and leverages existing staff and infrastructure. Without viable solutions for infant and toddler care, however, families may have subsidies they cannot use when there are no available slots. Parents — usually mothers — will continue to face impossible decisions about whether to work just to afford child care or to leave the workforce entirely.
Research on child care shows that positive developmental outcomes depend on the quality of care. Low-quality care can produce neutral or even negative outcomes compared to stable, high-quality home environments. This is not an argument against universal child care, rather an argument for embedding quality controls and accountability measures in program design to ensure efficacy.
New Mexico’s higher provider reimbursement rates and wage investments have broadened access to higher-quality programming. The share of children receiving child care assistance attending high-quality, five-star programs has increased from 53% in FY2023 to 62% in FY2025, with the number of five-star providers growing 14% between September 2024 and September 2025 alone.
Geographic coverage is not the same as functional access. A state can expand subsidy eligibility dramatically while families in rural counties still can’t find a licensed slot. As of 2025, more than 70% of children in remote rural areas live in a child care desert (up from two-thirds in 2018) meaning the rural penalty has actually worsened over seven years despite record state investment nationally. Nationally, rural children under five make up 24% of children eligible for child care, yet 55% of them live in a child care desert, compared to roughly 33% of urban and suburban children.
Home-based and family child care facilities are the most common providers in rural areas and they are disappearing with rising insurance costs, administrative burdens, and thin margins. Vermont’s decision to equalize reimbursement rates across all provider types, regardless of quality rating, was partly a recognition of this dynamic: rural and home-based providers need the financial floor before they can climb the quality ladder. Until states pair subsidy expansion with targeted rural supply investment (home-based provider support, transportation subsidies, and flexible licensing pathways) the families furthest from urban centers will continue to hold a voucher for care they cannot use.
New Mexico’s Legislative Finance Committee found that between 2019 and 2023, as the state expanded eligibility to higher-income families, enrollment among families below 100% of the federal poverty line actually declined, with additional capacity disproportionately serving higher-income households. Enrollment for children under 2 also declined. For every program moving toward universality, without active enrollment management and income-targeted outreach, subsidy expansion can inadvertently leave the neediest families behind.
46% of children in the US live in a child care desert where there is no or inadequate licensed child care. That figure, while staggering, is also a national average. States that are not making investments in child care are falling further behind as the gap between investing and non-investing states accelerates.
The United States is shifting how child care is understood and funded: from a private responsibility to public infrastructure. States and cities leading this shift are demonstrating that universal or near-universal child care is achievable and economically sustainable when designed with durable funding, workforce investment, supply-side planning, and quality assurances.
The gap between the leading states and others is widening and the headwinds are intensifying. Considering a weakened federal funding environment, an immigrant workforce under pressure of deportation or detainment, a persistent infant care supply crisis, and quality accountability systems that are still maturing, the hardest problems remain unsolved.
Now that we know universal child care is achievable, we have to see if commitment to it is sustainable. States that have committed to universal child care must build and protect the infrastructure needed to make affordable, quality care accessible truly to all.