A 2024 study by CNBC ranked Indiana as the worst state for access to child care in the country, with just 772 licensed facilities for nearly seven million people. (Photo/Pexels.com)
This story was originally published by TheStatehouseFile.com
By The Statehouse Reporting Project
May 8, 2025
On May 12, Janna Rodriguez will close the home daycare she runs three hours early to hold a rally. She’s invited elected officials across Long Island to learn about the struggles she and other child care providers face.
Rodriguez is one of more than 1,400 people who signed a pledge to close their child care center or call out of work for the fourth annual “Day Without Child Care.”
“This is an act of protest,” said Dominique Countee of Community Change Action, the group organizing the event. “The goal is to really hold back our economic power and to let the world know that there won’t be business as usual without child care.”
Rodriguez’s company, the Innovative Daycare Corp., serves 16 children. All rely on state subsidies to pay tuition. Even with that help, paying $9,000 per month to her staff of six—three employees and three interns—is a stretch.
“I’m currently at a deficit,” Rodriguez said. “Because I don’t have children of my own, I’m able to sacrifice my personal salary to be able to ensure that my staff are compensated and have paid time off.”
As social services funding questions loom in Congress, state lawmakers are getting creative about how to address a market failure. Market forces have long fueled a child care crisis, driving up prices for parents while keeping wages low for workers.
Families in the U.S. need to make more than $180,000 annually to reasonably afford infant care, according to an analysis released this year by the National Women’s Law Center. The high cost of care doesn’t translate to living wages for child care workers.
Child care centers are expensive to run. Adult-child ratios must remain low. The federal government recommends one adult care for no more than three children, but states make up their own rules.
Centers operate on thin margins to cover high overhead and competitive salaries. Child care centers that raise prices risk losing customers.
This year, states have pledged money, tax credits and relaxed regulations to alleviate the crisis.
Deregulating child care
Over half of Indiana parents missed work or class at least once in a three-month period because they could not find child care, per a 2024 Indiana Chamber of Commerce study. Those absences cost employers in the state an estimated $3.05 billion annually.
This legislative session, state lawmakers passed a measure allowing multisite child care centers like YMCAs and the United Way to operate multiple locations under one license.
The most important Senate amendment, according to bill sponsor Rep. Dave Heine, R-Fort Wayne, was language allowing in-home child care centers licensed before July 1 to continue operating “notwithstanding the building, fire safety, or equipment laws and regulations.”
“We have 43 child-care facilities providing child care to approximately 800 children that could be at risk of closing down if we did not add this language,” Heine said in a House meeting.
A CNBC study ranked Indiana almost at the bottom for quality of life, with the worst access to child care in the country. Child care deserts like Indiana deter potential workers from coming to the state, said Vanessa Green Sinders, president and CEO of the Indiana Chamber.
“We are such a great state to do business in,” Sinders said. “But that enthusiasm and that economic development is going to take more workforce.”
As in most states, the Indiana General Assembly did not allot enough money in the state budget to give Hoosiers universal, affordable child care. Instead, individual bills addressed small parts of the larger problem.
Last month, Idaho Gov. Brad Little signed a bill loosening the child-to-staff ratio. The original bill removed child-to-staff ratio requirements entirely.
The Kansas legislature consolidated 20 state child care programs under a newly created Office of Early Childhood. The new law also lowers staff training requirements and lets parents opt out of vaccine requirements for their children.
Anyone who provides care for up to four children, including two infants, for less than 35 hours does not need a license. This was met with concerns that children could be placed in unregulated environments.
Kansas Action for Children, a nonprofit, pulled its support of the bill because of amendments loosening vaccine requirements for children and allowing future administrations to further deregulate the system.
Kansas Alliance of Boys & Girls Clubs remains in support of the new law.
“Ideally, it will result in more child- care slots,” Joyce Glasscock, executive director at Kansas Alliance of Boys & Girls Clubs, said in an email.
Tax credits for businesses
Lawmakers in Indiana and Missouri want to give tax credits to businesses that pay for their employees’ child care expenses.
For the third consecutive year, Missouri Rep. Brenda Shields proposed a package of three tax credits.
One proposal, similar to one already passed in Indiana this year, applies to businesses that fund or offer child care for their employees’ children. Last year, Florida put $5 million behind a similar business-centered tax credit program.
The approach hasn’t always yielded results.
“It’s often not enough incentive for a business to offer it,” said Karen Schulman, senior director of state child care policies at the National Women’s Law Center.
Missouri lawmakers are considering a credit worth 75% of any donation made to a child care center. The donor cannot personally benefit from the contribution; for example, a parent cannot make a donation and expect lower tuition.
Another allows child care providers to claim a tax credit worth up to 30% of expenses related to construction projects. The credit also grants tax relief equal to the qualifying child care provider’s employer withholding tax.
“The aim is to raise salaries for those that work in the child care industry,” Shields said.
The median hourly wage for preschool teachers was $17.85 in 2024, according to the most recent available data from the Bureau of Labor Statistics. The median wage for child care workers—including nannies and home daycare workers—was $15.41, according to the bureau.
Grants for child care providers
Some states want to give funds directly to child care providers. In Massachusetts, licensed child care centers can use state grants for overhead and staff.
The Commonwealth Cares for Children grants became permanent in the state’s 2025 fiscal year budget. Last year, lawmakers allocated $475 million for these grants.
The funding also is tied to a need-based formula for families, which means that some private child care centers will not qualify for as much money, depending on the populations they serve.
The grants have provided stability to more than 7,000 child care providers across Massachusetts since their inception in July 2021; 93% of licensed providers receive monthly stipends from the state, according to Mass.gov.
The grants were initially meant to be stabilization funds through the American Rescue Plan Act to help support providers, but as the federal funds expired in September 2023, Massachusetts found a way to continue funding the program.
Arizona Democratic Gov. Katie Hobbs is continuing her push for extended access to child care programs with her proposed budget. Her Bright Futures AZ plan creates a partnership to divide child care costs among the state, families and businesses.
The proposal would offer $3 million from the state general fund, reducing the cost of early child care by up to two-thirds for families, plus a grant program for ages 5 through 12 who need care during summer and after school.
“It’s certainly a starting point,” Hobbs said in an April 15 interview with ABC15. “We’re projecting into the future what we need to build now to meet those needs.”
Despite her history of uphill battles against Republicans, Hobbs will have to rely on the Republican majority in both the state House and Senate to pass the upcoming budget with her child care plans intact.
“It is all hands on deck to get this over the finish line in the budget conversation,” Hobbs told ABC15.
South Dakota Gov. Larry Rhoden vetoed a bill that would have raised the income threshold for workers in the industry to qualify for state assistance covering the cost of care for their own children. The legislature failed to override the veto.
“The state’s role in promoting our child care workforce should be supporting economic development and encouraging private sector solutions—not broadening government safety nets into permanent workforce subsidies,” Rhoden said in a statement.
Many states offer money to help low-income parents pay for daycare. Montana’s Best Beginnings scholarship covers tuition costs for eligible families.
A bill that recently passed the House with bipartisan support would expand eligibility to child care workers—those who meet minimum hour requirements at licensed or registered providers, or who earn less than twice the state’s median income. Estimates suggest up to 400 children of currently ineligible workers would gain coverage if the bill passes, according to reporting by The Daily Inter Lake.
Ohio’s House approved $213 million for child care in its budget, $200 million of which The Ohio Capital Journal reports would go toward child care vouchers, while Texas’s House passed $100 million in spending towards child care scholarships in their budget. Both now await passage in their state Senates.
“We’re thrilled that Texas leaders are taking this historic step to empower parents with more child care options,” David Feigen of the nonprofit Texans Care for Children said in a press release. “More parents will be able to go to work, and more children will be in safe, high-quality child care during the critical early years of brain development.”
TheStatehouseFile.com is publishing this article as part of the Statehouse Reporting Project, a collaborative effort by collegiate journalism programs operating in statehouses across the country. This story was written by Anna Cecil, Natanya Friedheim, Chloe Gough, Alysa Horton, Aidan Pittman and Sydney Topf.
