New Mexico announces wide expansion of child care aid program

Jul. 2—Gov. Michelle Lujan Grisham and Early Childhood Education Secretary Elizabeth Groginsky had good news Thursday for parents of New Mexico's youngest children and the workers who care for them.

The state is setting aside about $320 million from the American Rescue Plan to widely expand eligibility for child care assistance and to overhaul the way it reimburses day care and preschool providers.

"This is the single largest eligibility expansion in the history of our child care assistance program," Lujan Grisham said in a statement. "And this change establishes virtually universal free or reduced-cost child care in New Mexico for at least the next two years as our economy recovers and New Mexicans get back to work."

Families who earn up to 350 percent of the federal poverty level — about $93,000 for a family of four — are now eligible for the aid. Parents can continue to receive the aid for their children even if their income rises to 400 percent of poverty — or more than $100,000 a year for a family of four.

Earlier this year, the state settled a 2018 lawsuit alleging the administration of former Gov. Susana Martinez restricted child care assistance without following a public process. The settlement set the income cap at 200 percent of the poverty level.

While the pandemic aid will offer only a temporary means of including New Mexico's higher-income families in the aid program, the governor expressed confidence during a news conference Thursday that voters will approve a measure in the November 2022 general election boosting funds for early childhood services — and the expanded eligibility program will continue.

The constitutional amendment on the ballot next year would allow the state to increase its withdrawals from the $22 billionLand Grant Permanent Fund. Much of the new revenue stream would be for early childhood services, while the rest would go toward K-12 public schools.

The allocation of the federal pandemic aid funds — the largest in the nation for child care, according to the Associated Press, and over 18 percent of the state's $1.75 billion share — came as the state celebrated the first anniversary of the New Mexico Early Childhood Education and Care Department.

The new agency, which provides a range of services for children prenatal to age 5, began operating last year amid the COVID-19 pandemic.

New Mexico is also the first state to shift fully away from market rate-based child care reimbursements for providers that accept families receiving assistance. Instead, the state will use a cost-estimation model that Groginsky helped pioneer in Washington, D.C., before launching the New Mexico agency.

"This is historic," Groginsky said at the news conference. "These new child care rates are going to be across the board for our providers, and they're going to make a significant difference in how our early childhood professionals and providers can operate, can build on their infrastructure and expand access."

New Mexico received approval from the federal government to base subsidies on the likely costs of providing child care rather than the amount families typically pay for care.

According to the Washington-based Bipartisan Policy Center, market rate-based subsidies are popular among states but rarely cover the true cost of providing care.

Market rate surveys conducted to estimate subsidies also often overlook the nontraditional and informal types of child care often relied on by lower-income and rural families — such as home day care and relative caregivers, according to the organization.

Helen McDonald, director of La Casita Preschool in Santa Fe, said the state's announcement left her feeling relieved and excited.

La Casita, off Alamo Drive, serves kids ages 2 1/2 to 5 years, with privately paid tuition rates ranging from $295 to $1,070 a month, depending on the number of days a child attends.

The preschool, a parent cooperative, reserves 30 percent of its spots for families enrolled in the state's child care assistance program. McDonald said she is sometimes dismayed to see families in need of aid narrowly missing the eligibility mark.

'It will just be simpler for families," she said of the newly expanded eligibility rules.

In addition to increasing educator and child care provider pay, she added, she hopes the new subsidy model will entice more providers to serve families receiving state assistance.

Often, McDonald said, private preschools have hesitated to accept lower-income families in the aid program because reimbursements from the state have failed to adequately cover operating costs.

"This is going to mean — I think, I hope — that more schools will be willing to offer that to kids. Which means that kids and families will have more options," McDonald said. "Because not every child is the same."

Groginsky called the new model for determining subsidy rates "transformational."

Full-day preschool enrollment has doubled under Lujan Grisham's administration. She said Thursday she looks forward to a future of universal child care in New Mexico.

"We're building this system at lightning speed to make sure that every 4-year-old and early, early childhood education for 3-year-olds is being stood up all across the state," she said.

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