What we’re watching in 2025 state legislative sessions

State policymakers play a pivotal role in driving forward child care policies aimed at improving accessibility, affordability, and quality. The 2025 legislative session marks a crucial moment for states to make further investments in child care funding and policies. This blog post offers a first look at what’s ahead for state policymakers in 2025: pathways for investment, potential challenges, and which governors are already prioritizing child care and early learning policies in their early proposals—and calling on their fellow legislators to follow suit.  

Opportunities for change  

In odd-numbered years all states have a legislative session, and 48 states are starting with a clean slate of bills (just New Jersey and Virginia may consider carry-over bills introduced in the prior year). Additionally, 47 states and the District of Columbia are required to pass new budgets: 31 states will approve an annual budget, and 16 states will pass a biennial budget. Last year, Kentucky, Virginia, and Wyoming enacted a biennial budget for both fiscal year 2025 and 2026 but may still propose revisions to their current budgets. With every state in session, and nearly all states introducing new bills and undergoing the budget process, policymakers in every state have an opportunity to advance proposals that improve the child care system.

There’s also some good news about state general fund revenue forecasts. The National Association of State Budget Officers’ (NASBO) 2024 Fiscal Survey of States finds that forecasts for enacted budgets in 2025 will see a 1.9% increase in general fund revenue, which is about 38% higher than their actual level before the pandemic in FY 2019.  

With new state sessions come new legislators, presenting a window for state advocates to build relationships and establish new child care champions. In 2024, 1,453 new legislators were elected to state legislative chambers, making up 19.1% of total state legislators. Changes in policymakers, party distributions, and leadership roles create new dynamics that will ultimately shape the direction of what gets passed (and what doesn’t).   

With recent changes to federal Child Care and Development Fund (CCDF) regulations, states also have action steps they must take to make child care more affordable and accessible. There are several states already implementing some of these policies required under the new federal rule, but other states will need to make progress this year. Given that every state is in session in 2025, and 16 will pass their biennial budgets this year, there is a heightened opportunity in 2025 for states to address legislative changes and funding to implement these improvements ahead of the 2026 deadline.  

Potential challenges  

While there are ways for states to address child care this year, there are also potential roadblocks that may impede state progress.  

This is the first legislative session that states will enter without the availability of federal relief funding for child care. NASBO finds that state general fund spending in FY 25 is projected to decrease by 0.3% over FY 2024 levels. This projected decrease follows an increase of 11.8% in state spending FY 2024, which was largely due to one-time expenditures of federal relief funds. The pandemic revealed the capacity of states to improve early learning policies with federal relief funding, and while many have chosen to continue these efforts beyond the expiration of these funds with state investments, others have not. It remains uncertain if there is a path to secure additional federal funding for child care, meaning states will need to step up their investments.  

Governors make the first move  

Governors present their priorities for the new legislative session in their opening address to the legislature (often referred to as the State of the State) and in their proposed Executive Budgets. While not an exhaustive list, these governors are prioritizing child care policies and investments in their opening addresses or in their recommended budget proposals:   

• Arizona: Gov. Katie Hobbs (D) proposes including $7 million in state funding to support Bright Futures AZ, a legislative package that would establish a public-private cost-sharing program and a child care tax credit for employers. It would also use funds to create a website for parents to find child care, offer tuition assistance for individuals wanting to become an early childhood educator, and allow providers to receive funding for their own children to attend a child care program.  

• Connecticut: Gov. Ned Lamont (D) proposes $300 million in surplus budget funds to establish a Universal Preschool Endowment, which would make preschool available at no cost for families earning up to $100,000 per year, and a maximum of $20 per day for families earning between $100,000 and $150,000 per year. It is estimated to create 20,000 new or extended day preschool spaces by 2032.  

• Georgia: Gov. Brian Kemp (R) proposes an additional $14 million to reduce preschool class sizes, nearly $4 million to support an additional 500 subsidy slots, and an additional $1.5 million to raise reimbursement rates to the 60th percentile.  

• Illinois: Gov. JB Pritzker (D) proposes maintaining funding for Governor’s Smart Start Illinois early childhood initiative, which was implemented in 2022 to increase access to slots and support compensation efforts for providers. The governor’s budget proposal also includes a $90 million increase in the Early Childhood Workforce Compensation Contracts to stabilize operational funding and to promote quality in the child care system, and an additional $85 million for the state’s subsidy program to address an increase in participation.  

• Indiana: Gov. Mike Braun (R) proposes $362 million in the biennial budget to eliminate the subsidy waitlist, which Indiana has implemented since December 2024. The budget proposal also includes $4 million to establish a Local Child Care Assistance program that would provide participating counties with support to expand the availability of child care locally by providing matching grants, technical assistance, training, and guidance regarding licensure of child care providers.  

• Iowa: Among other child care initiatives, Gov. Kim Reynolds (R) proposes expanding an existing pilot solutions fund to be available statewide that allows individuals or Iowa businesses to make donations to help enhance child care workforce wages. The governor also proposes to tax child care centers at a residential rate and codifying a program that makes providers eligible for subsidy for their own children, regardless of income.  

• Kansas: Gov. Laura Kelly (D) proposes $10 million for a one-time expenditure to support another round of Child Care Capacity Accelerator Grants, which has previously funded 5,655 new child care slots across the state. Outside of the budget, the governor is backing legislation that streamlines the child care licensure processes and consolidates existing early childhood programs into the Office of Early Childhood.  

• Kentucky: Gov. Andy Beshear (D) calls on legislators to enact universal preschool for all four-year-olds in the state in his State of the Commonwealth address. In 2024, Kentucky enacted a biennial budget for both FY 2025 and FY 2026 but may still propose revisions to the current budgets this year.  

• Maryland: Gov. Wes Moore (D) proposes an additional $116.6 million in FY 2025 and $85.7 million in FY 2026 to support the state’s subsidy program, while also temporarily freezing and capping enrollment through FY 2026 and prioritizing lower income families and those participating in workforce training and education programs. The proposal also implements new reimbursement rates at the 50th percentile of the 2024 Market Rate Survey with a hold harmless provision to ensure no provider experiences a rate decrease.  

• Massachusetts: Gov. Maura Healey (D) proposes $1.7 billion for child care, a 10% increase above FY 2025 levels, and maintains funding for the Commonwealth Cares for Children (C3) grants at $475 million, the same level as FY 2025. In the Fair Share supplemental budget, the governor proposes an additional $150 million for early education and care to be spent over the end of FY 2025 and through FY 2026. During her State of the Commonwealth Address, Governor Healey highlighted the state’s accomplishment of being the only state in the nation to fully replace federal pandemic relief for child care.  

• Michigan: Michigan Gov. Gretchen Whitmer (D) proposes $50 million to provide child care to families of infants, toddlers, children with disabilities and children living in areas where child care is scarce, and to pay providers prospectively. The budget proposal also includes $676 million to continue providing universal preschool to an estimated 57,100 children, of which $25 million will fund startup grants to attract new providers and classrooms and $61 million will fund expanding access for eligible three-year-olds. 

• Minnesota: Gov. Tim Walz (D) proposes $4.1 million in FY2026 and $9.6 million in FY2027 to bring Minnesota into compliance with federal rules for child care, including capping family copayments to 7% of household income (down from 14% currently) and extending the redetermination date for all children when a new eligible child is added. The proposal also includes $3.7 million from the general fund in FY 2026 and $1.1 million annually beginning in FY 2027 to develop a statewide electronic attendance and recordkeeping system so the state can pay prospectively and based on enrollment.  

• Missouri: Gov. Mike Kehoe (R) announces in his State of the State address that his budget proposal will include $10 million in grant funding to support partnerships between employers, community partners, and the child care industry to increase the number of slots available. The budget proposal will also require providers to be paid based on enrollment starting in FY2026. The governor has also issued an Executive Order that requires the state’s Office of Childhood to review and child care regulations with input from relevant stakeholders across the state, with a goal of reducing regulatory requirements by at least 10% that are duplicative, outdated, or unnecessarily burdensome.   

• New Mexico: Gov. Michelle Lujan Grisham (D) proposes a $210 million increase in child care funding over the prior year to support an increase in reimbursement rates, serving an additional 5,000 children in the subsidy program, and expanding the state’s preschool program to serve 2,700 more children, among other initiatives.   

• New York: Gov. Kathy Hochul (D) proposes $100 million in capital grants for construction and renovation of child care centers and $1 million to create the New York Coalition for Child Care, a formal partnership between business leaders, labor unions, and providers to identify a sustainable source of revenue and funding for universal child care. The proposal also includes supports for the creation of a child care worker substitute pool pilot program.  

• Ohio: Gov. Mike DeWine (R) proposes increasing access to child care for working families at or below 200% the Federal Poverty Level (FPL) from the existing threshold of 145% FPL.  

• Oregon: Gov. Tina Kotek (D) proposes $12.7 million to provide early childhood mental health consultation support to child care providers experiencing challenging behaviors in their classrooms, an increase of $4.4 million from the previous budget.  

• Pennsylvania: Gov. Josh Shapiro (D) proposes $55 million to be used toward $1,000 in recruitment or retention bonuses for child care providers.  

• South Carolina: Gov. Henry McMaster (R) proposes $20 million in non-recurring funds to continue the SC BOOST program, which provides wage supplements directly to qualified child care workers. Of this funding, the governor’s proposal sets aside $1 million to be used to establish a Tri-Share pilot program.  

• Wisconsin: Gov. Tony Evers (D) proposes investing $480 million to make the Child Care Counts program permanent (funding for the program is currently slated to end in June 2025). The proposal also includes $5.5 million to support a new employer grant program aimed at supporting employers in responding to specific employee and community needs, such as on-site child care, child care subsidies, and employer contributions to a Dependent Care Flexible Spending.  

While some governors across the political spectrum are prioritizing child care and early learning at the state of session, others have shifted their priorities elsewhere in their Executive Budget proposals. The absence of federal relief funding, paired with slowing state revenues, may lead to some states taking a more conservative approach to spending this year.  

• Maine: Gov. Janet Mills (D) shares in her budget address that a revenue shortall in the state is resulting in tough decisions to be made, including a proposal to reduce monthly stipends for child care providers, despite having previously invested more than $56 million.   

• Vermont: Gov. Phil Scott (R) proposes diverting over $20 million previously allocated to child care to unrelated government expenses.  

• Virginia: Gov. Glenn Youngkin (R) proposes amendments to Virginia’s current biennial budget that does not include additional funding for early childhood care and education, but does include several policies intended to reduce waitlists for families seeking access to subsidy. This includes increasing family copayment amounts. For families with income below the federal poverty level, a $5 per month copayment is proposed, whereas no copayment is currently required. Copayments for families above this level would increase from the current 2% of household income to 7%. The proposal also includes limiting job search requirements for subsidy eligibility to 90 days. 

• Washington: Gov. Bob Ferguson (D) proposes changes to the implementation of provisions under the Fair Start for Kids Act to raise the income threshold for the state’s subsidy program in July 2025 to 75% FPL due to a large budget shortfall. The proposal limits families who would be eligible under the expansion to those where one parent works for a small business. In December 2024, former Gov. Jay Inslee proposed to delay the expansion until FY 2030 to save $296 million in funding.   

Considerations for state policymakers 

States play a significant role in shaping the policies that determine child care access, affordability, quality, and sustainability. Child Care Aware® of America (CCAoA) strongly encourages state policymakers to consider solutions that ensure every family in the United States has access to a high-quality, affordable child care system. Solving our child care crisis will require public investment from states and policies that support health, safety, and quality, and lead to the viability of the system long-term. With uncertainty in additional funding being made available at the federal level in 2025, states could see subsidy waitlists grow, fewer families able to access care, and program closures if they do not make further state commitments and investments.  

 Interested in tracking state policies across the nation? CCAoA has developed a comprehensive, interactive dashboard that allows early care and education (ECE) advocates to learn how states are building accessible and affordable child care systems. Check out our State Policy Dashboard to stay informed all year!