City and state officials direct billions toward child care


July 6, 2022

By Brian Pascus

New York is investing billions of dollars in child care to buttress an industry crucial to supporting the state’s workforce.

Gov. Kathy Hochul opened a $343 million federal stabilization grant fund Tuesday to increase wages and benefits for child care businesses and nonprofits across the state. Mayor Eric Adams, meanwhile, announced a plan last week to spend $2 billion on child care services during the next four years, expanding the city’s voucher program and opening access to undocumented workers and low-income families.

“This increase in resources is an absolute necessity for [New York’s] economic recovery, in terms of a family’s ability to get back to work and in terms of businesses’ ability to find the workers they need to move out of this economic recession that Covid created,” said Ester Fuchs, director of the urban and social policy program at Columbia University’s school of international and public affairs.

The Covid-19 pandemic led to closures at child care sites across the state and spurred a wave of departures by staff members, who have complained about low pay and were concerned about contracting the coronavirus from unvaccinated children.

Hochul’s new portal of federal money is expected to offer $23,000 in grants to each of the state’s 15,000 eligible child care businesses for better wages and benefits.

Adams’ spending plan could open thousands of child care seats across the city through employer-sponsored tax incentives, expedited voucher payments and tax credits to developers for constructing child care centers.

“Child care centers and home-based programs have really been stretched to the breaking point because of rolling closures, increased expenses due to Covid-19, and families just not being able to afford child care at all,” said Jessica Sager, co-founder and chief executive at All Our Kin, a family child care organization. “We’re in enormous need of investment.”

Parents have increasingly had to fill the void left by departed industry workers. Women’s labor participation hit a 33-year low last year, according to the National Women’s Law Center.

State commitment
The federal funds are geared toward workforce retention and recruitment. At least 75% of the grants must be spent on bonuses and increased wages, contributions toward health plans or retirement accounts, or education spending and tuition reimbursement.

The federal stabilization fund comes on the heels of Hochul’s April 2022 budget agreement, which committed $7 billion in state funds over four years to the child care industry. The budget agreement doubled child care subsidies and includes the following investments:

  • Increasing the income eligibility threshold for child care subsidies to 300% of the federal poverty level (or $83,250 for a family of four).
  • Spending more on reimbursements to child care businesses and nonprofits.
  • $15.6 million to ensure every CUNY or SUNY campus has a child care center.
  • $13.5 million to provide child care education and services to eligible children of farm workers.

“There were a bunch of positives in the state budget,” March said, but “the Legislature had a far more ambitious plan closer to universality, so I think there is more work to do.”

One key metric that advocates are targeting is increasing the enrollment of children in child care assistance programs. The number of children receiving subsidized care outside of New York City dropped from more than 50,000 per month in 2012 to fewer than 27,000 per month last year, according to the Office of Temporary and Disability Assistance.

“It’s really tough for families to pay for care,” Sager said.

City plans

Adams released a 38-page child care blueprint. The city estimates there are more than 500,000 children younger than 5 in New York.

Adams has prioritized increasing access to the city’s child care system.

Highlights of Adams’ plan include:

  • Expediting voucher access by clearing the Administration for Child Services voucher waiting list by September.
  • Providing child care vouchers to 17 low-income neighborhoods. The administration estimates this will affect more than 11,000 eligible children.
  • Investing $10 million to subsidize care for children of undocumented workers.
  • Spending $25 million annually on a property tax abatement for building owners who retrofit their properties into child care centers.
  • Spending $25 million annually for a new business income tax credit for employers who provide child care services. The administration estimates employer carve-outs could create 6,000 new child care seats.

“Getting people through the system faster and including undocumented immigrants—those are really good policies,” said Charles Khan, organizing director of Strong Economy for All, a coalition of labor unions and community groups. “Those policies are moving us toward a gold standard that makes our system useful.”

Advocates including Fuchs argue that Adams’ focus on shoring up the voucher system is critical to helping families pay for child care.

Her team at Columbia conducted a survey last year of 1,057 city families with children and found that 32% of the families had difficulty affording child care and 36% had trouble finding care. Approximately 60% of those surveyed in the Bronx could not find child care when they needed it, according to SIPA data.

“It has become increasingly unaffordable to the larger population, especially in the Bronx, the Black and Hispanic populations,” Fuchs said. “In fact, [child care] contributed to the inability of low-income families to go back to work and also contributed to food insecurity and an inability to pay bills.”

Adams’ plan also includes authorizing eligible families to receive child care subsidies for 24 months, rather than 12 months, and removing the $15 hourly minimum wage floor for up to 10,000 eligible families to access child care vouchers.

But he’ll need the Legislature’s help to get both policies up and running.

“There’s a whole series of legislative initiatives designed to help people access subsidies and maintain subsidies, and that’s positive,” March said. “But we’ll need state action on that in the next session.”


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