New Mexico gives most US funding to child care of any state

New Mexico is directing the nation’s biggest chunk of federal coronavirus relief money to helping middle-class families pay for child care, a vast expansion aimed at getting parents back to work in one of the poorest states in America.

Gov. Michelle Lujan Grisham announced Thursday that the state will subsidize child care at 350% of the federal poverty line, or about $93,000 for a family of four. That’s up from about $54,000.

“We’re going to double the subsidies for child care,” said the Democratic governor, who was flanked by balloons and overlooked a gaggle of young children wearing party hats. She added that the state could one day go even further: “Why don’t we have universal access for child care?”

New Mexico’s two-year spending commitment will expand eligibility to the highest income levels of any state. It’s the largest and latest example of states using pandemic relief aid to subsidize child care. Others include Georgia and Montana, while California is debating a child care funding package.

Some states, like New Jersey, offer subsidies at 350% of the federal poverty line but only when relatives are providing care.

New Mexico also will be the first state to increase payments to child care providers by using a reimbursement formula that focuses on the local cost of running child care businesses, instead of the market rate of what parents can pay.

State Early Childhood Secretary Elizabeth Groginsky called the announcement an “important landmark on our journey towards creating a true cradle-to-career education system that helps all New Mexicans thrive.”

Groginsky was pivotal for winning federal approval of the new formula in Washington, D.C., where she served as assistant superintendent of early learning for the District of Columbia before taking the job in New Mexico. While the formulas are not identical, the experience there provides an idea of how much child care providers will benefit.

Child care providers in Washington got a 24% to 57% increase in reimbursement during the transition in 2019, according to officials there. No providers saw a decrease.

Early childhood advocates say the new rules will lead to increased pay for child care workers, who often make just above minimum wage. They also expect improvements in worker-to-child ratios, the main benchmark of child care center quality.

“So for your child what that means is that there’s a lower ratio between (staff) and children,” said Katherine Freeman, CEO at Growing Up New Mexico. “Why is that the most significant thing? Because children need individual attention.”

Parents should see immediate benefits, especially those who earned too much to qualify for past subsidies but too little to pay for child care without spending half their paycheck.

The expansion is paid for in part by $300 million in federal awards that expire in 2024.

Democratic state lawmakers already have a plan in motion to increase child care funding long term by tapping into a unique $20 billion state endowment funded by resource extraction royalties and market investments.

A ballot initiative before voters next year could increase the amount of funding from the endowment to the state’s Early Childhood Education and Care Department and possibly replace the federal funding when it expires.

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