Low wages. Lack of access. Skyrocketing costs.
All of these contribute to what has become a child care crisis. Not just in Ohio, but nationwide.
Since June, our solutions series, It Takes A Village, has chronicled the stories of parents, child care providers, and educators who are grappling with the realities of child care and the economic toll it takes on communities.
Officials estimate that Knox, Ashland, and Richland counties need between 2,431 and 5,466 additional child care slots.
But increasing the number of child care centers is only part of the solution. Child care also needs to be available at a price families can afford.
Publicly-funded child care comes in the form of subsidies, primarily to low-income families. The subsidies pay part or all of a family’s child care costs.
But not all families qualify. Even with subsidies, the rising cost of child care puts it out of reach for many families.
To meet the challenges of expanding access to affordable child care, many states and municipalities are turning to state initiatives and ballot measures to provide dedicated funds for child care.
According to a September 2025 report from the Children’s Funding Project, 22 states have dedicated funding. Sources include property taxes, endowment funds and taxes on activities like gambling.
A historic milestone in child care
New Mexico made headlines in September when Gov. Michelle Lujan Grisham announced guaranteed universal, no-cost child care for all residents.
Universal no-cost child care means all families, regardless of income, get free child care.
It is the first state to do so.
Previously, families earning up to 400% of the federal poverty level received free care. The new initiative expanded free care to all parents, regardless of income, beginning Nov. 1.
According to a news release from the governor’s office, the initiative will save families an average of $12,000 per child annually.
New Mexico’s Early Childhood Education and Care Fund funds the universal care. Gov. Grisham started the fund in 2020 with $320 million from surplus oil and gas revenues.
The governor signed legislation in April that increases the annual distribution to $500 million or 5% of the three-year average balance, whichever is greater.
The fund currently contains around $10 billion.
New Mexico has implemented additional strategies to address common child care challenges beyond cost, such as:
• Establishing a $12.7 million low-interest loan fund to renovate, expand, and construct child care facilities (an additional $20 million is requested in Fiscal Year 2027)
• Focusing on increasing child care slots for infants, toddlers, special-needs children, and low-income families
• Raising reimbursement rates for state-subsidized programs to reflect the true cost of care
• Expanding child care options for working families by partnering with employers and schools
• Focusing on recruiting licensed and registered home providers
• Rewarding providers who pay entry-level staff at least $18 per hour (New Mexico’s minimum wage is $12/hour) and offer 10 hours of care each day, five days a week
Connecticut creates endowment fund for universal pre-K child care
Connecticut followed New Mexico’s lead by creating an endowment fund to support universal pre-K child care by 2032.
The Connecticut Legislature established the Early Childhood Education Endowment in June. It requires the state to deposit up to $600 million over the next two years.
Currently, child care and pre-K are free for families in state-funded programs with household incomes up to $100,000.
Under the endowment legislation, families making over $100,000 will not pay more than 7% of their income on child care at participating programs.
The bills also call for adding 16,000 new infant, toddler, and pre-K child care slots and creating an online portal to help families find and enroll in programs, compare costs, and search for subsidized child care spaces.
To attract and retain early childhood educators (ECEs), the legislation requires qualified educators be paid on par with public school teachers. It provides funding for health insurance coverage for ECEs.
The bill also authorizes $80 million in bonds to be issued over the next seven years to help early child care centers make capital improvements, renovate centers, and expand the number of day care slots.
Increased access through payroll taxes
Vermont provides child care subsidies to low-income families through the Child Care Financial Assistance Program (CCFAP).
In 2023, the Vermont Legislature passed Act 76, the Vermont Child Care Contribution tax. Under the bill, Vermont will invest around $125 million annually in child care, with $80 million coming from a payroll tax and around $50 million from the state’s general fund.
The bill requires employers to pay a 0.44% payroll tax on taxable wages. However, employers can withhold up to 25% of the tax from employees’ paychecks.
Self-employed individuals must pay a 0.11% tax on their self-employment income.
Vermont Gov. Philip Scott vetoed the bill, saying he believed “with organic revenue growth we can achieve our shared goals.”
Scott’s budget included $390 million in surplus revenue to fund “shared priorities” such as child care and other initiatives without raising taxes or fees.
However, both the House and the Senate overrode Scott’s veto by significant margins. Act 76 took effect July 1, 2024.
The bill raised CCFAP gross income eligibility to 575% of the federal poverty line (FPL). A family contribution of $50 a week kicks in for families at 176% FPL.
As a result, officials expect about 7,000 more families and children to have access to child care.
The bill also removes the requirement for documentation of immigration and citizenship status. It establishes incentive payments for child care providers to attain higher levels in the Quality Rating System, increase and maintain infant and toddler capacity and provide nonstandard hours of child care services.
Act 76 prohibits a provider from charging a waitlist or application fee for CCFAP-qualified children and from increasing tuition rates more than 1.5 times the most recent NAICS index (North American Industry Classification System) for education services.
The bill also improves funding for aides and equipment for special-needs children, increases reimbursement rates for home- and center-based programs, and offers higher compensation for early childhood educators.
Anchorage redirects marijuana tax toward child care
Voters in Anchorage, Alaska, approved a 5% marijuana sales tax in 2016. It generates about $5 million a year for the city’s general fund.
In April 2023, voters redirected that $5 million to child care and early childhood education. The ballot measure, known as Care for Kids, passed 55.92% to 44.08%.
Trevor Storrs, president and CEO of the nonprofit Alaska Children’s Trust, noted that redirecting an existing funding source to child care rather than enacting a new tax made it easier to pass the measure.
Anchorage Mayor Suzanne LaFrance’s 2026 budget anticipates $8.2 million available for child care.
The city uses that funding in a variety of ways, including subsidy grants to early education providers for pre-K in Title 1 schools, which typically have a high rate of student poverty.
Other uses include small grants for in-home child care providers and a pilot subsidy program to support the cost of child care for childhood educators. Direct payments will also go to existing child care providers to support operational costs.
Soda tax pays for free pre-K care in Philadelphia
Philadelphia pays for free pre-kindergarten for children ages 3 and 4 through a soda tax.
Formally called the Philadelphia Beverage Tax, the tax adds 1.5 cents per ounce of soda sold in the city. Since 2017, city officials have used the tax revenue to fund the PHLPreK program.
The PHLPreK program partners with early childhood education providers who offer a play-based curriculum focused on getting children ready for kindergarten, not just day care.
Providers can be early learning centers, school-affiliated sites, and neighborhood daycare facilities. They must provide a meal and a snack and are reimbursed based on enrollment.
In addition to free pre-K during the school year (5.5 hours a day), the program offers affordable extended-day and summer care options.
However, providers might charge additional fees for families needing care past 5.5 hours.
Since 2017, PHLPreK has served more than 17,000 children.
For the 2024-25 school year, it offered free enrollment to 5,250 children through 220 early education providers.
Property taxes are another way communities fund child care
In 2023, Texans approved a constitutional amendment that provides tax relief for qualifying child care providers.
Cities and counties can choose to exempt a child care center from paying all or part of its property taxes.
The City of Dallas and Dallas County were the first city/county combination to do so.
Whatcom County, Washington, took a different approach. Voters passed a property tax increase in 2022 that added $10 million to the county’s annual budget for child care and children’s mental health.
New Orleans
New Orleans voters approved a 20-year, 5-mill property tax in April 2022 that created 1,000 early-childhood slots for low-income children ages 6 weeks to 3 years.
The nonprofit group Agenda for Children administers the program, which is called City Seats. Families earning up to 200% of the federal poverty level qualify.
The tax generates $21 million annually, up from $3 million that the city previously had available. Seventy percent of revenue goes toward free child care slots at early learning centers. The remaining 30 percent goes toward wraparound support, such as building new centers.
The city gets another $21 million in matching funds through Louisiana’s Early Childhood Education Fund.
The 1,000 seats are merely a drop in the bucket, however, as there are 8,300 youth who are eligible for funding. Recipients are selected through a lottery.
The initiative requires providers to pay workers at least $15 an hour, up from the $9.77 average hourly rate in 2020. They must also undergo professional development training and abide by class size and teacher-to-child ratios.
Before voters enacted City Seats, families’ child care costs ranged from $6,951 to $10,284 annually.
Parents’ responses were positive in a 2024-25 program assessment. They noted the free child care helped them afford essential household needs, stabilize housing, and improve their ability to seek or maintain employment.
But parents also said there’s still room for improvement and noted the need for expanded hours.
What’s happening in Ohio?
Ohio’s Publicly Funded Child Care program (PFCC) offers subsidies to families earning up to 145% of the federal poverty level (FPL) at the time they enroll. Those subsidies taper off as a family’s income increases.
However, approximately 40,000 children do not qualify for PFCC.
In April 2024, the legislature created the Child Care Choice Voucher Program to help families who earn too much to qualify for PFCC.
The budget bill passed in September added $50 million to the voucher program, using TANF (Temporary Assistance for Needy Families) money from the federal government.
Families can earn up to 200% of the FPL ($62,000 for a family of four) and qualify for a voucher.
Ohio took a step toward more accessible child care when legislators introduced House Bill 484. HB 484 would establish a pilot program offering free child care to child care workers who work at least 20 hours a week, regardless of income.
The bill was referred to the House of Representatives’ Children and Human Services Committee in October.
Universal child care in the United States
Universal child care is not unknown in the history of the United States.
When the U.S. entered World War II after the bombing of Pearl Harbor, more and more women were recruited to work in the munitions and aviation industries.
With fathers fighting abroad, the women were left to juggle child care and the workforce. Help came through the Defense Housing and Community Facilities and Services Act of 1940, also known as the Lanham Act.
The act authorized the Federal Works Agency to fund schools, houses, and other infrastructure that aided workers in the defense industry.
Although not initially intended for child care, the government used it to fund day care centers for mothers working wartime jobs in factories or government offices.
Once communities established the child care centers, they operated them with little government involvement. The centers provided care at odd hours so that mothers of all income levels could work early in the morning or late at night.
Centers also provided up to three meals to the children.
When Congress authorized the funding, it tied it to wartime needs. Congress discontinued the funding in October 1945.
However, because of the public response urging Congress to continue the funding — primarily because mothers were still the sole supporters while waiting for their husbands to return from overseas — Congress extended the funding until February 1946.
From August 1943 through February 1946, the federal government spent $52 million on child care. Communities contributed another $26 million.
At the war’s peak in July 1944, 3,102 day care centers in Washington, D.C., and 49 states served 130,000 children.
Officials estimate that by the end of the war, the centers served between 550,000 and 600,000 children.