Governor Hochul Announces Historic $2 Billion in Child Care Subsidies to Support Low-Income and Working Families and Child Care Providers

 

$7 Billion in Child Care Funding Included in FY 2023 State Budget

Income Threshold for Child Care Subsidies Increasing, Making an Unprecedented Number of Young Children in New York State Eligible

State Sees Record Number of Responses From Providers Located in Child Care Deserts, Receiving Over 1,700 Grant Applications to Establish New Child Care Programs

 Governor Kathy Hochul today announced that the largest investment in child care subsidies in New York State history will be distributed—$2 billion to increase the number of families receiving child care financial assistance and the amount child care providers are paid for their essential services. The $2 billion in childcare subsidies includes $894 million in New York State Child Care Block Grant new funding passed in the recent State Budget, more than $500 million in funds previously allocated to local departments of social services districts that remains unspent, and more than $600 million in existing COVID-19 pandemic funding. As part of the Governor's unprecedented commitment of $7 billion to child care over the next four years, these investments provide families with much-needed support, while also furthering New York's economic recovery.

"I know firsthand how a lack of child care can hurt your career, your family and your future, as a working mother when I was forced to leave my job to care for my child," Governor Hochul said. "These historic investments in New York State's child care system will allow us to forge a new path forward for parents, especially mothers. It is the right thing to do, the moral thing to do, and will supercharge our economic recovery and support working families. Child care is an essential service, and in New York, we will continue to do everything in our power to make sure more working families have access to it."

The funding, managed by the New York State Office of Children and Family Services (OCFS), will expand the initial eligibility levels for families in August 2022 to up to 300% of the federal poverty level ($83,250 for a family of four), up from 200%, extending eligibility to hundreds of thousands of young children in New York.

OCFS' subsidy funding announcement comes on the heels of its recent release of $30 million in federal grant funding to expand existing licensed, registered or permitted child care programs in areas of the state without sufficient child care slots, known as child care deserts. These funds, which are part of the $100 million child care desert initiative approved in the 2021 Enacted Budget, are being made available through the American Rescue Plan Act. More information and a request for applications are available here. The other component of the child care desert funding, worth $70 million, opened in April.

As of yesterday's application deadline, OCFS received over 1,700 applications from individuals hoping to establish new child care programs in areas of New York State facing critical child care shortages as part of the $70 million made available in the 2021 enacted budget. Over half of these submissions target child care deserts specifically in New York City. Made available through the American Rescue Plan Act, these funds will help child care providers in underserved neighborhoods establish child care programs; cover start-up and personnel costs; recruit, train, and retain staff; and support staff in accessing COVID-19 vaccines and boosters. Award announcements are slated to begin in the coming weeks.

Earlier in April, the Governor announced major investments in child care among the highlights of the FY 2023 Budget, doubling New York's support for child care subsidies. New York State is investing $7 billion over four years, reflecting that access to quality child care is critical to children, families and a statewide economic recovery. The state budget also expands access to high quality child care by increasing the child care market rate to the 80th percentile of providers' rates in June 2022. This change will broaden the child care options available to families that receive child care assistance while also increasing reimbursements for child care providers. This increase makes New York State a national leader regarding payment rates.