Gov. Michelle Lujan Grisham (D) announced Thursday that New Mexico will cover the costs of child care for most residents through June 2023. The benefit, which covers families earning up to 400 percent of the federal poverty level, makes New Mexico the first state to offer no-cost care over such a broad range of incomes, officials said.
“It’s free, no more co-pays, no more waiting,” Lujan Grisham said to a crowd of preschoolers at East Gate Kids Learning Center in Albuquerque. “This is the road to a universal child-care system.”
The median household income in New Mexico is $51,243. Under the new program, which begins May 1, a family of four earning up to about $111,000 would be eligible for free child care. The state recently expanded a federal child-care subsidy to middle-class families. On Thursday, Lujan Grisham said it would eliminate co-pays for them, too. Officials estimate both changes will make child care free for a total of 30,000 families.
Advocates welcomed the initiative at a time when families are still recovering from the economic fallout of the pandemic and are grappling with rising prices. “It is hard to overstate the impacts of ensuring that all families can afford great child care,” said Amber Wallin, executive director of New Mexico Voices for Children, an advocacy group. “It helps our families. It helps our workforce. It helps our businesses. It’s such an important step forward for New Mexico, and it comes at a time when families are in real need of any economic relief.”
Mario Cardona, the chief of policy and practice for Child Care Aware of America, a nonprofit that advocates for affordable child care, called the announcement “the type of thing that we should be seeing across the country.”
Though other states, including Georgia, Virginia and Kansas, have expanded eligibility and made child care more affordable during the pandemic, none have gone as far as New Mexico, which has committed a historic and unusual amount of resources to the sector, Cardona said. Other states have largely relied on federal relief from the Cares Act and the American Rescue Plan Act to pay for child-care improvements, but the last of those dollars expires in 2024 and lawmakers may be hesitant, Cardona said, to roll out new programs using temporary money.
New Mexico, by contrast, has created permanent pots of money. In early 2020, the state spent $300 million to create its Early Childhood Education and Care Fund. The endowment, which draws on taxes from oil and natural gas production, is projected to be worth $4.3 billion by 2025.
That dedicated fund “has allowed us to think big now with the federal dollars,” said Elizabeth Groginsky, the Cabinet secretary for early-childhood education. “The reason this was so important right now is we’ve seen for all families the rising cost of gas, food, all the things, and so we said we’ve got to use these federal relief dollars to help families right now because they want to go back to work. We need them to go back to work. And we have to remove barriers that are prohibiting people, especially women, coming back into the workforce.”
Melissa Martinez, a single mother of a 3-year-old son and a 4-year-old daughter, said the news came as a great relief after the pandemic. Martinez said she has experienced tremendous financial setbacks over the past two years and has found herself unable to afford child care at times. The co-pay waiver will save her $120 a month.
“Unfortunately, $120 does go really far in a single-income household,” Martinez said. “That goes to pretty much all of our necessities, basic necessities like shampoo. You would be surprised how many bottles of soap I’ve been through because my little guys love to play in the bath.”
Martinez volunteers with OLÉ, a nonprofit coalition of families and early-childhood educators, and she said she has met dozens of low-income families who have long been afraid to earn more money because they worried they would no longer qualify for the federal child-care subsidies states give low-income parents. By expanding the eligibility for the program, Martinez said, she and other parents will feel empowered to look for better-paying jobs.
Still, Martinez said, even with the waiver, she worries she won’t be able to find child care. She lives in Albuquerque but works in Santa Fe, and the providers she has called all have waiting lists.
Lujan Grisham also said Thursday that the state will spend $10 million in discretionary funds from the American Rescue Plan to expand the state’s supply of day cares. The state will offer grants to business owners who either want to expand existing child-care centers or create new ones.
Parents, providers and activists have been pushing policymakers for nearly a decade to improve the state’s early-childhood programs. New Mexico often falls at the bottom in rankings for child well-being, and in 2018, when Lujan Grisham was running for governor, the Annie E. Casey Foundation deemed the state the worst in the nation for child well-being.
“For so many years, we were just told we can’t do that, we can’t do that,” Wallin said.
In 2018, OLÉ and the legal group New Mexico Center on Law and Poverty filed suit against the state’s Children Youth and Families Department, alleging that the state arbitrarily and illegally denied families access to child-care assistance. Lujan Grisham settled with the plaintiffs last year.
As a candidate for governor in 2019, Lujan Grisham promised to make child care affordable for more New Mexicans. In July 2020, she established the New Mexico Early Childhood Education and Care Department as a Cabinet-level position. Since then, the department has expanded its subsidy program to bring in more families and waived co-pays for families who earn up to 200 percent of the federal poverty level. It also increased the subsidy rates that it pays providers by basing them on how much it costs to provide care, as opposed to the more commonly used method of basing them on a percentage of market rates. This year, it also became one of a handful of states to roll out its own state child tax credit.
Lujan Grisham said that while the announcement is significant, it’s not enough. New Mexico still ranks near the bottom for child well-being, a reality she ascribed to the state’s high poverty levels and a lack of action on behalf of past governors. The only way to improve the state’s rankings, Lujan Grisham said, is to give families financial support. She hopes to pay for universal no-cost child care using roughly $127 million a year from the state’s multibillion-dollar Land Grant Permanent Fund, but voters must first approve a constitutional amendment this fall to allow the state to use the endowment on early-childhood education.
At the news conference, she said she wished the state was able to provide free child care to many more families. “But what you should hear and feel is that this is the path to that reality. And we are the only state in the nation that is leaning in to make that happen,” she said. “We can and will be first in the country to achieve this incredible goal.”
