To Strengthen the Early Care and Education System, Funding Reform Is Needed

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This roundup features a curated collection of stories on an important early care and education topic.

It’s a truism in early care and education that there simply isn’t enough money in the system to make the economics work. That is at the core of the sector’s failed market: without reasonable funding, supply remains scarce, educator wages remain low, quality remains questionable, and all the while parent fees remain high. Little can change without a fundamental shift in how the field is funded.  

Some states in the U.S., and some countries abroad, are starting to test various funding reforms. The stories collected below spotlight different funding models, which collectively point toward the idea that if the status quo isn’t tenable and marginal improvements prove inadequate, there are alternative paths to a stronger, more sustainable system.

Massachusetts is building up a robust and comprehensive early learning system piece by piece, perhaps most notably marked by a $475 million annual fund that sends monthly operational grants to most child care providers in the state. These advances were started during the pandemic and have now been made permanent, heavily fueled by a portion of the state’s “Fair Share” constitutional amendment which raised taxes on millionaires.

For decades, Ireland had a market-based child care system similar to the U.S., and it has been making major reforms since 2019. This article examines the new policy regime including a novel “core funding” model intended to shore up child care operations and increase provider pay.

In 2021, the Canadian government committed to what is called the Canada-Wide Early Learning and Child Care (CWELCC) system, with the goal of average parent fees falling to $10 a day while increasing the supply and quality of programs. This piece gives a glimpse into the early days of Canada’s rollout of the CWELCC system, which was backed by historic outlays by the federal government. Since it launched, this effort has resulted in average parent fee cuts of 50% or more in all provinces; and 8 provinces and territories have hit the $10 a day target.

In 2020, community organizers in Multnomah County in Oregon campaigned for universal preschool. The campaign, conducted amid the COVID-19 pandemic, reinforced the potential power of local funding measures. Multnomah voters handily passed the measure, which now generates well over $100 million a year from a tax on high net-worth households. 

In 2022, New Mexico passed a constitutional amendment that dedicated a portion of the state’s natural resources trust fund for early childhood education. This permanent funding source has since enabled New Mexico to extend free child care to many families and had a substantial impact on the state’s poverty rate. Bryce Covert’s story dives into the state’s efforts.

Vermont’s major child care reform bill, Act 76, became law in 2023. Act 76 uses the nation’s first payroll tax dedicated to child care. Like New Mexico, Vermont has used this sustainable funding source to power an expansion of child care aid for families and an increase in the state’s child care supply, including among family child care providers. Rebecca Gale’s story unpacks the details.

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