Originally printed in KPC Media publications, January 15, 2025
The rug has been pulled out from under families and early care and education providers. The results could be devastating to our economy.
The state had made some great strides in early care and support, and I shared that with Governor Mike Braun at an invite-only meeting in the fall before he was elected. Increasing Child Care Development Fund (CCDF) voucher qualifications from 127% to 150% of the Federal Poverty Level was a step in the right direction. Even better, increasing CCDF reimbursements from market rates to “cost of care” rates for child care providers was a game changer.
“Are you complimenting something that the state has done?” Braun asked me, somewhat in disbelief.
I assured him I was. Then I asked, because sometimes things seem too good to be true, “Does the state have enough funding to continue these changes?”
Both Braun and Rep. Dave Abbott, who was in the room as well, both assured me there was.
Apparently, that was not the case, as we are now learning.
Just days after the Office of Early Childhood and Out of School Learning (OECOSL) announced that Indiana’s 2025-27 CCDF plan (which indicated a significant increase CCDF income qualification levels) has been approved by the federal government, the Family and Social Services Administration (FSSA) dropped a bomb.
Lawmakers didn’t set aside enough money to pay for the new rates long-term. Instead, they used temporary Federal COVID-19 relief funds to cover the gap. These funds ran out in September 2024, and the state did not plan ahead to replace them.
Now, Indiana has brought back a waitlist for child care subsidies for the first time since 2018. If nothing is done, 25,000 children could lose their child care. This means parents might have to quit their jobs, even while we know our economy needs more people to enter the workforce.
Our child care providers, already often financially hanging by a thread, will lose increased reimbursements as their families lose vouchers. In many cases, these reimbursement rates are higher than the cost of tuition. That change in 2023 has allowed programs who serve a high number of families with a voucher to finally operate in the black…something that was rare for many programs prior. As a result, when families lose vouchers, early care providers lose critical funding, and everyone may lose when programs begin to close.
This isn’t short-term, either. The state will not re-evaluate the situation until October 2025.
State leaders still have a chance to make this right. Indiana families, child care providers, and businesses need to work together to solve this. Lawmakers must set aside $140 million each year for the next two years to fully fund child care subsidies at the levels they set last year.
Advocacy by those in early childhood is critical this session. The director of OECOSL left office on Friday, January 10 amid the change in state leadership, and has not yet been replaced. We don’t have a trusted voice in that position, so we need to be that voice.
Investing in child care helps everyone. It keeps kids safe and learning while their parents work. It also helps businesses avoid turnover, which includes hiring and training new workers, because parents already in the workforce can keep their jobs. Perhaps most importantly, quality early care and education provides a strong start for children as their brains develop. This foundation sets them up for lifelong learning, good health, and success.
State leaders are deciding the budget right now. Let’s make sure they know how important child care is. Contact your state legislators today and ask them to fully fund child care subsidies. If you’re not sure who your legislators are, go to think link and type in your address: https://iga.in.gov/information/find-legislators.
Let’s do what’s right for Indiana families, children, and the economy.