New Mexico’s proposal would indefinitely extend free child care for children up to age 5

New Mexico would indefinitely extend unpaid childcare for most children up to age 5, while increasing payment rates for private and public childcare providers under regulations announced Monday.

New Mexico’s current childcare grants — which are among the largest in the country — were initiated with federal coronavirus relief funds. Education officials are currently grappling with financial strategies to sustain efforts to expand the reach and quality of childcare services in a state with low labor force participation and high rates of child poverty.

In April 2022, New Mexico expanded eligibility and waived child care benefit co-payments for families earning four times the state poverty rate—equivalent to about $120,000 for a family of four. However, the provisions are due to expire in August.

Childcare issues remain as many return to normal post-pandemic due to staff shortages and illness

The regulatory change proposed by the Department of Early Childhood Education and Care would expand these guidelines and ensure that parents do not have to pay service taxes on childcare allowance. Future co-payment changes would require three months notice to parents before the changes take effect.

According to the department, the number of enrollments in the aid program increased by almost a third in the past year to around 19,340 children under the age of 6. Children ages 6 and older receive financial aid for pre-school and after-school programs.

Approximately 72,000 children in 43,000 families are entitled to child care allowance under current regulations.

The proposal is subject to change based on written comments and at a public hearing in June. The changes are part of a push by Gov. Michelle Lujan Grisham to remove financial barriers to a range of childcare services, from infant care and private daycare for young children to preschools in public schools and after-school programs.

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Details of increases in payment rates for childcare providers are yet to be determined. New Mexico has a reimbursement formula that focuses on the local costs of running child care businesses rather than the market rate that parents can afford.

Rising government spending on early childhood education is being funded in part by a roughly $2 billion trust fund, backed by taxes on oil and gas exploration and capital gains.

Additionally, in 2022, voters approved increased annual withdrawals from the state’s permanent land grant fund to fund early childhood education initiatives.