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 for 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.

October 2026 Update

2027 PDG B-5 SMART Grants Carry the Promise of Modernization

We’ve spent a lot of time in this space talking about red tape, redundant data entry, and the importance of systems modernization in early care and education. On September 21, the federal government put real money behind that conversation with ACF’s published notice of funding opportunity for the Preschool Development Grant Birth through Five (PDG B-5) SMART (Strategic Measurement, Analytics, and Results using Technology) Grant. The agency expects to make about 25 one-year awards to states and territories, ranging from $500,000 to $15 million, for an expected $222 million in total funding. States will have to put up a 30 percent match, and applications are due November 20.

States can apply under one of two options. The first supports building or strengthening statewide operational systems, data systems, dashboards, reporting tools, and interoperability improvements. The second is for states that already have that infrastructure in place and want to use it to test a specific strategy. Either way, ACF wants each project tied to one clearly defined state goal and a measurable result by the end of the year. Investments will need to advance a specific state goal “rather than general information technology modernization,” and they are earmarked for states that have moved beyond the planning stage and are ready to execute. In keeping with the administration’s 2026 priorities, we can expect at least a few projects that support program integrity and fraud prevention, but the scope is otherwise fairly flexible.

The real winners of the projects this grant will fund are families and providers, both of whom are feeling the pains of legacy technology, as evidenced by multiple recent reports: 

Providers are doing the same paperwork over and over. In NAEYC’s new national survey of 3,891 early educators, 60% said they must submit the same information to multiple agencies or entities. 56% said administrative and regulatory paperwork takes up more time than they expected when they entered the field, and half said they do licensing and compliance work on unpaid time. They are frustrated with the disparate systems (licensing, quality rating, accreditation, the food program, local governments, etc…) that don’t coordinate with one another. 

Families can’t see what care is actually available. When a parent goes looking for child care, she needs to know whether a program near home or work has an opening for each of her children, at a price she can afford. As Opportunities Exchange (OppEx) has pointed out, “Websites abound, but almost none of them include the timely or comprehensive information parents need.” Policymakers are working without that information, too. Most supply estimates are built from licensed capacity, counts of publicly funded slots, or provider surveys, none of which track open seats by age, and the best of that data is often a few years old. OppEx’s description is blunt: “our child care supply data is an educated guess.”

Attendance and payment systems are under strain. With program integrity under a brighter federal spotlight, states are under pressure to tighten attendance verification. In Washington, a state audit estimated $37 million in questioned child care subsidy costs and found missing attendance records. Auditors pointed to weak oversight and said they did not conclude that fraud occurred, and the agency has said it needs more resources to update its prepayment verification systems.

Old state systems are hard to change. In a December, 2024 brief, Opportunities Exchange described Child Care and Development Fund (CCDF) administrators “constrained by antiquated technology,” with outdated and incompatible systems, missing documentation, and a shrinking number of staff who still know how those systems work. When a new federal rule or state law comes down, those are the systems that have to absorb it.

A one-year grant program will not be able to fully fix the tangle of our most challenging legacy systems, and the states that are furthest behind may have the hardest time showing the readiness ACF is asking for. But this is the first time in a while that federal dollars have been set aside specifically for this work, and we’d encourage every state early childhood team to take a hard look at it before November 20.

Read: OPEN NOW: PDG B-5 SMART Grant Notice of Funding Opportunity (Administration for Children and Families)

Head Start Waits - What Happens Now?

The public comment period for the administration’s proposed Head Start overhaul closed in early October, and the response was loud. The official docket is showing approximately 40,000 submitted comments. That kind of activity is a reflection of how polarizing the proposed rule changes were. Unless you are an administrative procedure superfan, you may be wondering, “What now?” 

The Supreme Court itself has interpreted the Administrative Procedure Act to mean that HHS is required to “consider and respond to significant comments,” with those responses appearing in the preamble of the final rule. HHS can change the proposal based on comments received, with major changes likely requiring a supplemental proposal that would also be open for comment. There is no clock on the comment review and rule revision period. When HHS does make it through that process, the rule will need to go back to the White House Office of Information and Regulatory Affairs (OIRA) for review, after which it will head to Congress and the Government Accountability Office (GAO). If the rule is deemed “major,” it can’t take effect until at least 60 days after it’s published or received by Congress, whichever comes later. 

Congress does have the option to overturn a rule with a joint resolution of disapproval, but that resolution would require the President’s signature or a veto override. Unfortunately, transparency from this point on will be limited. Comments are posted publicly, but HHS’ internal deliberation won’t be. Our first real look at how the agency weighed the comments and what impact those comments had will be in the final rule’s preamble.

The two significant rules we’ve been monitoring from ACF since earlier this year (Ensuring Program Integrity for Head Start Programs and Reducing Bureaucracy and Burden in the Child Care and Development Fund) are currently sitting at the White House review stage right now.

Bipartisan Bills of Note

The Child Care Tax Benefit Outreach and Assistance Act, led by Sens. Maggie Hassan (D-New Hampshire) and Dan Sullivan (R-Alaska), recently passed the Senate and now heads to the House. The bill, first highlighted here in our March update, would create a Business Child Care Liaison at the IRS to help employers take advantage of existing federal child care tax incentives that too often go unused. A June report from the Joint Economic Committee Minority calculated that a sample business could save $820,000 over five years using those credits, and a parent working there could save nearly $10,000 on child care. Read: S. 4071 - Child Care Tax Benefit Outreach and Assistance Act (Congress.gov)

The Bright Beginnings Act (H.R. 10815), introduced by Reps. Lou Correa (D-California) and Chris Smith (R-New Jersey) on October 15, would establish a federal tax credit of up to $10,000 per year for child care providers to purchase equipment needed to serve children with developmental disabilities. Per the sponsors, 27 percent of parents of children with disabilities report difficulty finding adequate child care. Read: H.R. 10815 - Bright Beginnings Act (Congress.gov)

The Best Practices for Military Child Care Homes Act (S. 5683), introduced by Sens. Jacky Rosen (D-Nevada) and James Lankford (R-Oklahoma), would direct the Department of Defense to develop a best practices guide for military families looking to open certified family child care (FCC) homes on base. It’s the second bipartisan military child care bill we’ve covered since August, and a welcome sign that home-based care is getting more attention as a supply-building strategy. Read: S.5683 - Best Practices for Military Family Child Care Homes Act (Congress.gov)

Child Care Funding Heads to the Local Ballot Box

With federal action largely stalled and states struggling to backfill other social welfare programs, a growing number of communities are taking child care funding directly to voters. This November, early childhood funding is on the ballot in six states (Arizona, California, Colorado, Maryland, Missouri, and Texas), according to an analysis from the Children’s Funding Project, including local measures in Baltimore, Tempe, Boulder County, San Diego County, Marin County, San Antonio, and St. Louis.

The details vary. Some communities are looking to fund child care subsidies directly, others to invest in their early care and education workforce. Supply and access are the two common themes, with quality underpinning both. 

There is something to be said for funding that can’t be wiped out by the next budget shortfall or change in leadership. As the Children’s Funding Project’s Olivia Allen put it, “It gets locked in by the people.” Every early childhood ballot measure that has passed and later come up for reauthorization has been renewed, often by a wider margin than the original vote. The catch is that local measures can only reach so far, and not every community has the tax base to support one.

Read: Early Childhood Funding Is Increasingly in Voters’ Hands (zero2eight)

Updates From the States

Connecticut announced a new $10 million Early Childhood Educator Insurance Subsidy Program, funded by the state’s Early Childhood Education Endowment, that will help early educators purchase health insurance through Access Health CT in 2027. Eligible educators can receive subsidies of $1,000 to $1,200, and the program is expected to help 7,200 to 8,000 people in its first year. Per the endowment’s advisory board, between 18% and 20% of early childhood educators in the state are uninsured. Read: New Healthcare Subsidy Arriving In 2027 For Early Childhood Educators (CT News Junkie)

Indiana’s top early childhood official told lawmakers that the administration plans to request $200 million in ongoing Child Care Development Fund (CCDF) voucher funding in the 2027 session, along with simplified regulations for child care “microfacilities” serving 30 or fewer children. That would be welcome news for the more than 29,000 children currently waiting for vouchers, but the administration declined to take a position on restoring income eligibility from 135% back to 150% of the federal poverty level. At the same time, the state is considering a draft rule that would eliminate the Child Development Associate (CDA) or college coursework requirement for lead teachers in licensed programs, a move that would have a negative impact on quality while likely not moving the needle in any meaningful way on availability. Read: Braun calls child care 2027 priority (WRTV)

New Mexico’s chief legislative finance economist warned lawmakers that, without adjustments, the $11 billion Early Childhood Education and Care Fund will be unable to support the state’s universal child care program by 2048. Lawmakers diverted $1.9 billion in deposits meant for the fund in 2025, and the universal child care law signed this year draws up to $700 million from it, pushing payouts above returns. The program itself is popular (93% of participating families report a positive impact on their well-being), but it will need a more durable revenue stream to stay on track. Some families are also facing new co-pays after an inflation trigger in the new law was met. Read: Course correction needed for New Mexico universal childcare fund, legislative economist says (Source New Mexico)

Tennessee opened a new workforce pipeline with Public Chapter 873, which allows high school students ages 16 to 18 to work in child care centers outside of school hours or through an approved work-based learning program, as long as they’ve completed at least two courses in an education and training career cluster. Read: New Tennessee Law Opens Childcare Career Pathways for High School Students (3B Media News)

Texas is still feeling the effects of the subsidy cuts we covered last month, and new reporting points to one of the less obvious drivers. A 2021 law (House Bill 2607) required programs accepting subsidies to participate in Texas Rising Star, the state’s quality rating system, which pays providers more per child. Participation jumped from a little less than 30% of providers to nearly 75%, and the average monthly cost per child is projected to grow from $581 in 2022 to $904 in 2027. The state raised the bar on quality but didn’t add any money to cover the higher rates. The cuts are expected to add 14,000 names to a waitlist that already tops 100,000 children. Read: Texas’ child care quality control measures played a role in enrollment cuts this fall (The Texas Tribune)

Virginia’s Department of Education estimates that closing the state’s child care affordability gap would cost up to $4.5 billion a year over the next decade. A new report from the Department lays out three options, ranging from a $1.6 billion “Sustaining Historic Growth” plan to the $4.5 billion “Affordability for All” plan that would serve an additional 240,000 children. The state currently lacks at least 140,000 child care slots, and state reimbursements cover just 51% of the cost of quality. Governor Abigail Spanberger will present her proposed budget amendments in December. Read: Closing Virginia’s child care affordability gap could cost up to $4.5B a year (Virginia Mercury)

Trending Original Research and Reports

Top pick of the month: The National Association for the Education of Young Children (NAEYC) released Coherence, Not Cuts, a survey of nearly 4,000 early educators. In a wide ranging survey of regulations, administrative burden rang out as a common theme. The majority of those surveyed also said loosening ratio and qualification requirements would make it harder to meet children’s needs, and 51 percent said lowering qualification requirements would make them more likely to leave the field. NAEYC also found that nearly 20 percent of respondents are considering leaving the field in the next year, and 8 percent of program leaders are considering closing their programs. Read: Coherence, Not Cuts: Educator Perspectives on How to Improve ECE Regulation (NAEYC)

Opportunities Exchange published Krystal Robinson’s issue brief on attendance verification for child care subsidies. Along with a critique of trendy photo requirements, it includes a practical checklist for state administrators and a detailed table of digital check-in risks and the controls that address them. Given how much attention CCDF program integrity is getting right now, every lead agency should give it a read. Read: Beyond the Photo: A Practical Approach to Attendance Verification (Opportunities Exchange)

The Public Policy Institute of California (PPIC) looked at who is using subsidized child care in California. The number of young children served in the state’s subsidized programs more than doubled, from about 60,000 in 2015 to 150,000 in 2025, but public funding still doesn’t reach all low- and moderate-income families. Read: Understanding the Evolution of Subsidized Child Care in California (PPIC)

The First Five Years Fund and the Louisiana Policy Institute for Children released new statewide polling showing that 76% of Louisiana voters see the cost of child care as part of the nation’s affordability crisis, including 71% of Republicans. 72% said expanding access to affordable, quality child care should be an important state priority over the next year, up from 65% in 2025. Read: 2026 Louisiana Poll: Voters Say Child Care Costs Add to Affordability Crisis, Want Action (First Five Years Fund)

The Niskanen Center made the case for states to revive At-Home Infant Care programs, which give eligible parents time-limited support to stay home with a new baby, and laid out how states could pay for them with federal TANF block grant funds. The brief notes that center-based infant care costs roughly $14,000 a year on average. Read: Bridging the Infant Care Gap: Reviving America’s At-Home Infant Care Programs (Niskanen Center)

September 2026 Updates

CCDBG For Stay-At-Home Moms?

The New York Times reported early in September on the White House’s plan to propose an expansion of Child Care and Development Block Grant (CCDBG) subsidies to families with a stay-at-home parent. You could almost hear the sigh of exhaustion from ECE advocates and professionals across the country, many of whom have been fighting tirelessly against the recent Head Start NPRM.   

We should call this out for what it is: bait. For one thing, the administration has no authority to do this. That should be enough, but given the recent climate of executive overreach, we have learned better than to just hand-wave these things away based on such novel concepts like “precedent” or “legality.” As has been largely true with the efforts to undermine Head Start, there is no evidence that congressional Republicans support this proposal, and a lot of evidence that they would rather talk about strengthening and reauthorizing CCDBG through bipartisan efforts like the Child Care Modernization Act. 

For those who maybe don’t have the context and are walking into this conversation wondering why stay-at-home parents shouldn’t receive financial support in the way working families do, it’s important to stress that most people in this space agree that they should. The problem lies in the math. CCDBG is a chronically underfunded program that has always been intended to help low-income families access child care specifically so parents can remain in the workforce, pursue education, or participate in job training activities. Per a 2024 report from the Office of Human Services Policy, only 15 percent of eligible children under federal rules (and 22 percent under state rules) received child care subsidies, and two-thirds of the funding for those subsidies comes from CCDBG. 

In short, the funding is not going to the wrong people. There just isn’t enough of it. The Mommy Wars serve only to further divide an already divided society, which might be the goal of this action in the first place with midterms looming. Parenthood should be an economically feasible pursuit in the world’s largest economy, full stop. But it’s not. Instead of fighting each other over which parenting model is best (which is a straw man anyway because many families don’t even have the option to stay home with their children), we need to come together to figure out how to make raising a child in America more affordable for everyone. 

Read: A Child Care Proposal That Pits Struggling Families Against One Another (Forbes)

Read: First Five Years Fund’s Sarah Rittling in Opposition to Reported Expansion of Eligibility for Federal Child Care Subsidy (FFYF)

Child Care Solutions Celebrated On the House Floor 

Speaking of Congressional support for CCDBG reauthorization, the House Education and Workforce Subcommittee on Early Childhood, Elementary, and Secondary Education welcomed leaders from Iowa, Kentucky, and Tennessee on September 1st to share their innovative approaches to building stronger child care solutions through tax credits, employer partnerships, workforce compensation and incentives, common-sense regulation reform, and strategic approaches to subsidy programs. 

One thing that stood out from the hearing was the recurring theme of the economic argument for investment in child care accessibility and affordability. Witnesses repeatedly pointed to the flexibility in CCDBG and Head Start that enables them to customize their systems to meet the unique needs of their communities. 

Subcommittee Chairman Kevin Kiley (I-California) set the stage for the productive conversation in his opening remarks: 

“The states represented here today are demonstrating what long-term commitment can look like, not because government funding is guaranteed forever, but because supporting child care strengthens the workforce, improves productivity, and fuels local economic growth. Their examples show what is possible when innovation and responsibility meet, and we hope they will inspire other states to follow their path. Because when child care works, parents can work, businesses can grow, and communities can thrive.”

Read: Hearing Recap: “Supporting Working Families: State-Led Child Care Solutions” (Committee on Education & Workforce Blog)

Bipartisan Bills of Note

We typically use this space to highlight bipartisan proposals as they’re introduced in Congress, but this month we want to celebrate one of the rare ECE bills that was actually passed into law with the President’s signature on September 18. The Supporting Early-Childhood Educators’ Deductions (SEED) Act, first mentioned here in April, will allow early childhood educators to claim tax deductions for out-of-pocket classroom expenses, bringing them in alignment with their K-12 counterparts. It’s a small win (worth $300-$350 per teacher), but a welcome one. 

Read: STATEMENT: SEED Act Passes Into Law (FFYF) 

Updates From the States

Illinois turned tragedy into action with the passage of House Bill 2190, which requires child care providers with more than 12 children to have two on-duty staff members with first aid, CPR, and Heimlich training at any given time. The law, three years in the making, was inspired by the 2023 death of 23-month-old Calum Wells atop a toy bin in his Island Lake child care center. Read: Illinois bill signed into law setting new emergency training requirements after toddler’s death at Island Lake daycare center (Lake & McHenry County Scanner)

Massachusetts is pulling $31.2 million from their Fair Share Supplemental Budget (funded by the state’s “millionaire’s tax”) to reopen applications for its Child Care Financial Assistance (CCFA) programs for the first time since 2024. With more than 31,000 children currently on the waitlist, the influx of funding won’t be enough to serve every family that needs the support, but it is a step in the right direction. Read: Mass. expands child care financial assistance to income-eligible families (GBH News)

Michigan took a step toward regulatory improvements that would “eliminate unnecessary double licensing requirements for preschool programs operating within Michigan schools.” House Bill 5803 passed the House and is on its way to the Senate. The bill would eliminate the need for preschool classrooms operating in public and nonpublic K-12 school buildings to comply with both school and child care licensing standards, an issue that has caused redundant paperwork and operational red tape. Read: Rep. Bierlein plan to end double licensing for school-based preschool programs passes House (EIN Presswire) 

North Dakota legislators passed on the opportunity to discuss a bill addressing child care needs across the state, with the House and Senate voting not to take it up at all in their respective September special sessions. “At this point, we just don’t have the time to dig into it,” said Rep. Matthew Ruby (R-Minot), “And simply throwing money at it might not be the best way to go about it.” Approximately 1,900 North Dakota families are currently on the waitlist for the state’s childcare assistance program. Read: Legislature rejects Dem-led attempts to add childcare, data center moratorium for special session (North Dakota Monitor)

Texas was forced to cut nearly 10% of their child care scholarships (~14,000 seats) just one year after tapping into TANF for $100 million in to expand the program. The funds that were supposed to last through 2027 instead dried up ahead of schedule due to inflation. Now, several regions will need to begin making cuts before the year even ends. The state has relied heavily on federal funding, and is now dealing with the fallout of social safety nets being cut and no new money on the way from D.C. Read: Texas cuts child care subsidy program. Here’s what that means. (The Texas Tribune)

In other Lone Star State news, Dallas County’s highly touted $1 million Tri-Share pilot has experienced the same implementation challenge we’ve seen with every local attempt at Tri-Share—namely, employers aren’t lining up to participate. The county has seen only two businesses sign on, with two more waiting to enroll, for a total of just under $140,000 in distributed funding. Tri-Share has received a lot of attention and support from communities throughout the country, but we will need to see a successful local rollout at some point to justify the opportunity cost. Read: Dallas County’s childcare cost-share program struggles to attract employers (KERA News)

Trending Original Research and Reports

Top pick of the month: A Child Care Trust report ranked all 50 states and the District of Columbia on their child care workforce systems. The report looked at 10 domains from defining the workforce through determining compensation supports, assigning points to each state based on publicly available data and supplemental information from lead agencies. It offers a clear and actionable path for those states that are currently struggling the most with workforce shortages and diminished quality to do better. Read: Toward a Competent, Stable Child Care Workforce

The Prenatal-to-3 Policy Impact Center released their always anticipated annual State Policy Roadmap, which measures state adoption and implementation of designated policies and strategies for families spanning the (you guessed it) prenatal-to-3 years. The highlights of this year’s report include 23 states raising the minimum wage, three new states implementing paid family and medical leave, and strong progress on child care access and affordability in at least five named states. Explore: The 2026 Prenatal-to-3 State Policy Roadmap

zero2eight published an insightful interview with economist Sarah Jane Glynn, author of the report Who’s Minding the Kids These Days?: An Analysis of Children’s Care Arrangements. The conversation centered on the many ways in which families—especially mothers—are making compromises, finding workarounds, and organizing their lives around making sure their children are adequately supervised in some way, shape, or form while doing what they need to do to keep their families afloat. Read: Many Families Rely on a Patchwork of Childcare

The ACF Office of Child Care published a brief case study on Texas’ approach to CCDF program integrity. The article focused on three best practices: layered oversight and clear role separation; operational rigor through quality assurance, data, and analytics; and strong, collaborative culture that supports compliance and integrity. Read: How Texas Achieves Strong Program Integrity in CCDF