New Mexico would extend indefinitely no-pay child care for most children up to age 5 with increased payment rates to private and public child care providers under proposed regulations announced Monday.
New Mexico’s current child care subsidies — among the most expansive in the nation — were initiated with federal coronavirus relief money. Education officials are now grappling with financial strategies to sustain efforts to expand the reach and quality of child care services in a state with low rates of workforce participation and high rates of childhood poverty.
New Mexico in April 2022 expanded eligibility and waived co-payments for child care assistance to families earning as much as four times the federal poverty rate — equal to about $120,000 for a family of four. But the provisions are set to expire in August.
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The proposed regulatory change from the Early Childhood Education and Care Department would extend those guidelines and ensure that service taxes on child care assistance are not paid by parents. Future changes to copayments would include a three-month advance notice to parents before changes take effect.
Enrollment in the assistance program has increased over the past year by nearly one-third to roughly 19,340 children under age 6, according to the department. Children ages 6 and over receive financial assistance for before-school and after-school programs.
About 72,000 children in 43,000 families are eligible for child care assistance under current rules.
The proposal still may be amended in response to comments in writing and at a public hearing in June. The changes are part of a push by Gov. Michelle Lujan Grisham to eliminate financial barriers to an array of child care services, from infant care to private day-care for toddlers, preschool in public school settings and after-school programs.
Details of payment rate increases for child care providers have not been finalized. New Mexico has a reimbursement formula that focuses on the local cost of running child care businesses, instead of the market rate of what parents can pay.
Surging state spending on early childhood education is underwritten in part by a roughly $2 billion trust sustained by taxes on oil and natural gas production and investment income.
Additionally, voters in 2022 approved increased annual withdrawals from the state’s land grant permanent fund to pay for early childhood education initiatives.