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Programs serving lower-income families commonly struggle to maintain stable operations, often relying on meager public subsidies available in each state through the federal Child Care and Development Block Grant (CCDBG). Even though these subsidies are inadequate – and nationally, only one in seven eligible families receive them due to underfunding – they can be a financial lifeline. During the Covid-19 pandemic, the federal government surged money to the states, and that money was used to stabilize program operations and provide financial relief to families.
Colorado, for instance, gave out more than $250m of such grants from 2021 to 2023, nearly double its current annual CCDBG allocation. Researchers from the Colorado Evaluation and Action Lab at the University of Denver found that the stabilization grants helped to keep programs open while allowing them to raise staff wages and reduce fees for parents. That was also the case nationally in states from Alabama to Alaska.
When the pandemic funding began to dry up in September 2023, the impacts predictably fell on lower-income families and communities of color with less wealth or ability to navigate the renewed scarcity. However, the funds’ expiration did not occur all at once; many states distributed remaining money for months if not years after, and about a dozen have used their own dollars to extend the stabilization funding.
Now, as the country wrestles with rising costs of living and economic uncertainty, pressures are again beginning to spike. No significant increase in CCDBG appears to be on the horizon, as budget bills moving through Congress hold federal funding largely flat.
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Still, there is a seeming paradox: despite the childcare sector’s myriad struggles, the total number of childcare programs has been modestly increasing in recent years. While there is no comprehensive data for 2025, the non-profit Child Care Aware of America reports from surveys of 40 states that the number of licensed centers nationally increased by more than 4,000 from 2022 to 2024. The increase is likely driven by growth among childcare programs that serve more affluent clienteles. For instance, Heather Tritten, president and CEO of the Colorado Children’s Campaign, a statewide non-profit, says that Colorado has also seen a small increase in licensed slots in the past year. Yet, Tritten questioned, with regards to equitable access: “Are they the right slots?” She added: “I think there’s sort of a dual economy when it comes to childcare: there’s the childcare that’s available for people who can afford childcare. And then there’s the childcare that is probably not available to people who are less able to afford it.”
Many of the experts interviewed for this story offered that the solution to equitable childcare access is not merely better funding for subsidy programs, but a transformed system that eliminates the two-tier distinctions altogether. Ideally, Garcia said, “our childcare system wouldn’t be a private business model. It would be a public good, and we would take lessons from K-12 so that we’re not overpromising and underfunding”, and “we would design the system on a needs-based model and not a profit-based model”.
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