Child care is one of the hottest topics in public discourse today, and for good reason. The sector is finally (if a bit slowly) getting the attention it deserves, and several universal truths have emerged:

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

August 2025 Updates

Federal Activity Slows with August Recess

This month, members of Congress enjoyed their annual mini summer break, returning home and putting in face time with constituents. Many focused on hyping legislative wins, raising awareness of issues with laws they did not support, identifying local concerns, and soliciting feedback (some more than others). 

The recess serves as both a burnout mitigator and a bit of a “calm before the storm” period before upcoming fights over spending bills (expect to hear plenty of threats about government shutdown ahead of the October 1 start to the new budget year) and Presidential civilian nominations for government posts.

That’s not to say nothing has happened at the federal level since our last update. The bipartisan Head Start Education and Development Workforce Advancement and Yield (HEADWAY) Act was introduced just before the recess by Senators Shelley Moore Capito (R-W.Va.) and Reverend Raphael Warnock (D-Ga.) on July 24. 

The Act would enable some Early Head Start teachers to work toward their CDA credential while actively employed, with the caveat that at least one teacher in every classroom already be credentialed. This would eliminate a significant barrier to entry for the ECE workforce. We’ve seen this proposal before—most recently with the reintroduction of the House version, sponsored by Representative Juan Ciscomani (R-Az.), earlier this year—but it has never made it out of committee. We’ll see if HEADWAY can make any headway this time around. 

Read: HEADWAY Act One-Pager (congress.gov) 

Sweeping Draft Bill for Native Children Released for Feedback

The Senate Committee on Indian Affairs, chaired by Sen. Lisa Murkowski (R-Ak.), released a discussion draft of The Native Children’s Commission Implementation Act with the goal of collecting feedback by September 12. The Act, based on recommendations in 2024’s The Way Forward report from The Alyce Spotted Bear & Walter Soboleff Commission on Native Children, includes an entire section (Title IX of the bill) dedicated to early care and learning programs. 

Highlights of the proposal include: 

• Strengthening the Indian Employment, Training, and Related Services Act (477 Program) by expanding the list of programs Tribes can include and streamlining both funding and administration.
• Increasing the Tribal set-aside in CCDBG from "not less than 2%" to "not less than 5%."
• Giving Tribes a bigger seat at the table through mandatory formal consultation on ECE policy, including a larger number of named stakeholders.
• Creating an Early Childhood Tribal Advisory Committee within the Office of Early Childhood Development at HHS to "offer ongoing recommendations on culturally grounded care, equitable access, early childhood data collection, and Tribal consultation practices."

Read: A Milestone for Native Children: New Federal Bill Reflects NICCA's Early Childhood Recommendations (National Indian Child Care Association)

Some States Move to Waitlists...

More than a third of New York counties (and New York City) have stopped accepting applications for the state’s child care voucher program, with more likely to follow soon. The NY Child Care Assistance Program serves nearly 100,000 families, but recent increases to funding ($1.5 billion this year) have failed to keep up with growing demand.  

Neighboring New Jersey is facing similar issues, where the NJ Child Care Assistance Program was forced to stop accepting new applications as of August 1. The program’s website now features a pop up that includes the ominous sentence, “Additional funding is not anticipated for the foreseeable future.” The program currently serves about 70,000 children.

While Others Make More Slots Available

Arizona added the necessary funding to move 900 children off their Child Care Assistance Program waitlist and enroll them in the program. This was just one part of a larger investment in early care and education in Governor Katie Hobbs’ Arizona Promise Budget. 

Mississippi reopened its child care voucher program after a pause dating back to March. The program currently serves just under 29,000 and the $15 million it received in this year’s budget will be enough to fund approximately 2,500 vouchers, only about half of the state’s 5,000-strong waitlist. The Department of Human Services had originally asked for $40 million to sustain the program’s previous enrollment levels.

Trending Original Research and Reports

We’ve decided to make this a new recurring section in this blog, with the goal of raising awareness of strong reporting, polling, and original research from the organizations and outlets we trust. Here’s what caught our attention this month: 

• States Create Trust Funds to Bolster Child Care and Early Childhood Education (zero2eight) - A strong overview of efforts in New Mexico, Connecticut, and Montana to create and fund child care trust funds that can serve as a sustainable source of permanent funding for critical programs and services. The need for these funds has become abundantly clear as states try to reconcile the loss of temporary American Rescue Plan funds that were used to increase supply and make child care more affordable for families. 
• Why So Many Childcare Centers are Closing (Time) - Speaking of supply, this article effectively captures many of the reasons behind the “childcare is a textbook example of a broken market” quote it cites early on from Janet Yellen. Specific examples from child care providers in Wisconsin, North Carolina, and Maine provide a more human lens through which to view the funding challenges. 
• Research Finds Preschool Enrollment Can Increase Parent Income (First Five Years Fund)  - A brief, digestible summary of a paper published by the National Bureau of Economic Research late last year indicating that universal pre-kindergarten enrollment in New Haven, Connecticut led to increased parent incomes both during and in the years following their children’s participation. Perhaps more importantly, the cost of offering the program was nearly offset by the increased tax revenue from participating parents.
• State Session Round Up: Summer 2025 (Child Care Aware of America) - CCAoA gives us an in-depth look at the progress made on early care and learning in the 2025 state legislative sessions. 

Other Developments Throughout the Country

Nebraska’s highly influential Buffett Early Childhood Institute released the results of a survey conducted in partnership with the Bipartisan Policy Center indicating that child care affordability is a serious challenge throughout the state. State Sen. Brian Hardin acknowledged the results of the poll, but pushed back on the idea that government subsidies were the answer, instead calling on employers to play a larger role. 

North Carolina’s new Child Care Task Force has been looking into innovative ways to tackle that state’s access and affordability issues, hinting at the possibility of a philanthropy-backed child care endowment fund that could potentially be announced as early as this fall.  

In South Carolina, the state Chamber of Commerce published the results of a poll of 500 parents of children under the age of six, estimating an economic hit of nearly $1 billion annually as a result of child care access and affordability problems. 

Pennsylvania House Republicans hosted a public hearing on the topic of child care in the last week of July. The lawmakers in attendance emphasized deregulation and workforce development programs aimed at making it easier to start, sustain, and work for child care businesses. 

ICYMI: July 2025 Updates

Federal Highlights in a Nutshell

The One Big Beautiful Bill Act was signed into law on July 4. We’ve covered it extensively the past few months; no need to beat a dead horse, but suffice to say the positive impact of the modest child care-related tax credit expansions added by the senate will pale in comparison to the damage done to the ECE sector by the Medicaid and SNAP cuts. While work requirements for both will go into effect over the next two years, the cuts aren’t happening until 2028, giving states at least a little time to brace for impact.

Health and Human Services Secretary Robert F. Kennedy Jr. announced on July 10 that Head Start will be considered a “federal public benefit” going forward, which means undocumented immigrants will no longer be eligible to participate in the vital early education lifeline that makes up such a big part of ECE systems throughout the country. The fight against the directive is now being added to court battles that have been underway since April. No enforcement guidance has been provided by HHS to date. See the statement from the National Head Start Association here.

The bipartisan Expanding Child Care for Military Families Act was reintroduced at the end of June by Sens. Jeanne Shaheen (D-NH) and Joni Ernst (R-IA), both of whom are senior members of the U.S. Senate Armed Services Committee. The bill would open the door for a “first-of-its-kind Department of Defense-led pilot program to support workforce development opportunities for child care providers and to add capacity to the child care sector by increasing recruitment, retention, and training of child care staff.”

In mid-July, Sens. Tim Kaine, Bobby Scott, and Patty Murray reintroduced the Child Care for Working Families Act, which has been introduced in every Congress since 2017. The bill would address affordability issues by capping child care costs at 7% of family income, increasing wages for early childhood educators, and expanding access to child care options. 
 

The National Governors Association Publishes Roundtable Takeaways

In October 2024, the National Governors Association Center for Best Practices partnered with the First Five Years Fund to host a roundtable discussion featuring state and territorial child care leaders. The group, composed of 12 advisors from 11 states, looked ahead to post-pandemic relief funding challenges and opportunities and discussed the next priorities for states and Governors.

Participants called out challenges related to governance, data, workforce recruitment and retention, and the CCDF final rule updates. They also shared the innovations they’re pursuing to address these challenges, including some of our favorite topics like public-private partnerships, Tri-Share, subsidies and scholarships for the ECE workforce, and others. It’s interesting to compare the ideas discussed among the 11 states represented at the roundtable with the bills that came out of the current legislative session in the months since it took place.

Read: Governors’ Perspectives on Addressing Child Care Needs: Supply and Demand Trends to Watch (National Governors Association)

Wisconsin Gets its Budget and Child Care Funding Done in a Photo Finish

In an unusually thrilling race between a state and national legislature, Wisconsin lawmakers were able to save the state more than $1 billion in federal health care funding by getting the state budget—signed by Governor Tony Evers at 1:30 am on July 3—across the finish line just one day before the national one became law.

Of the $111 billion spoken for in the bi-annual budget, $361 million of it is earmarked for child care, including $110 million in stabilization funding for providers, an expansion of the Wisconsin Shares child care subsidy program, and a new Early School Readiness program for four-year-olds that will provide more options for families looking to enroll in 4K. Critics of the budget have said that it doesn’t do enough to address rising costs, and will simply allow the status quo to continue for two more years.

Read: In wee hours, Legislature passes and Evers signs 2-year, $111-billion state budget (Wisconsin Public Radio)

Seattle Set for $1.3 Billion Levy Renewal Vote this November

Voters in the Washington city of Seattle will have a chance to vote on a sweeping, 6 year, $1.3 billion investment in childcare, preschool, mental health, student safety, college tuition, and career pathways. The Families, Education, Preschool, and Promise (FEPP) levy was first approved in 2018, but can trace its roots back to 1990, when 56% of voters supported the seven-year, $69.2 million Families and Education Levy. FEPP now finds itself up for renewal after unanimous passage by the City Council.

The updated funding would support:

• A 130%+ increase in affordable child care slots, from 600-1400
• 600 more slots for the Seattle Preschool Program
• Five additional School Based Health Centers for K-12
• Universal access to a free two-year degree from local colleges
• Expanded trade pathways through Seattle Promise

The levy’s renewal comes on the heels of voters approving more than $2.5 billion in Seattle Public Schools levies earlier this year.

Read: 2026 Families, Education, Preschool, and Promise Levy Renewal (Seattle City Council)

Other Developments Throughout the Country

The 74 published an article highlighting the successful efforts of child care advocates in Idaho, Maryland, and Minnesota to halt potentially harmful increases in child-to-staff ratios this year. As the need for increased supply continues to grow, the short-term appeal of deregulation remains a key topic of conversation.

Last month, Ohio’s proposed Child Care Cred Program looked like it wouldn’t survive the budget process. This month, it was signed into law with $10 million in seed funding. This Tri-Share-adjacent model features a 40/40/20 split between employees, employers, and the state. Now, the Ohio Department of Children and Youth must take on the challenge of recruiting employers into the program.

Neighborhood Villages released a comprehensive Massachusetts Budget Debrief with the funding breakdown for key early care and education programs, which were allocated $1.7 billion of the $61 billion budget. This includes a record-high $1.06 billion for the commonwealth’s Child Care Financial Assistance program, but disappointingly level funding for many other programs.

New Jersey continues to take steps toward universal preschool and free, full-day kindergarten, with Governor Phil Murphy signing three more early childhood education bills into law this month. Together, the bills codify preschool funding formulas, reduce red tape, align appropriations language, and establish reporting and consumer education requirements for state agencies.