States Step Up, but Child Care Funding Gaps Remain: New CCAoA Report Highlights 2025 Legislative Wins and Risks Ahead

Arlington, VA—Child Care Aware® of America (CCAoA) has released the State Session Round-Up: Summer 2025, a review of state legislative action on child care. The report finds that many states made historic investments and policy innovations in 2025 and continue to lead the way in creative child care supply and demand side policy solutions and investments.  

A number of states made historic investments for child care in 2025, including: 

• Arizona: $45 million in state funding for its subsidy program and to help address the current subsidy waitlist, the largest state investment in over a decade. 

• Massachusetts: A record $1.06 billion for the state’s subsidy program 

• Wisconsin: $66 million to support the first entirely state-funded child care initiative in state history.  

• Connecticut: Initiated the Early Childhood Education Endowment fund with an initial investment of up to $300 million from the state surplus. 

• Montana: Created the Growth and Opportunities Trust (GO Trust) with a one-time $10 million public investment. 

Other highlights include:  

• Child Care Operations: Alaska, Massachusetts, and Wisconsin funded operating support grants modeled on federal stabilization funding.  

• Workforce Support: Illinois, Maine, Rhode Island, and Tennessee advanced wage increases, subsidies for child care workers’ own children, and new benefits. 

• Public-Private Partnerships: Innovative employer cost-sharing programs launched in Iowa, Missouri, and Ohio to expand child care slots. 

• Regulatory Updates: States including Oregon and Texas reduced red tape while maintaining safety standards. 

Persistent challenges still remain for states to address. Child care providers are among the lowest paid workers in the US, access gaps continue, and waitlists remain long. As noted in our 2025 State Funding for Child Care & Early Learning report, overall state funding for child care remains low and children, families, and communities across America are not on an even playing field when it comes to state child care funding. Looking forward to 2026, federal funding cuts to programs like Medicaid and SNAP may threaten state budgets further.  

“Quality child care is the backbone of our nation’s well-being. It nurtures children’s healthy development and learning, allows parents to work, and keeps businesses running. It is encouraging to see progress made in many states, but the overall picture shows an uneven foundation,” said Susan Gale Perry, CEO of CCAoA “As policymakers grapple with challenging funding and policy priorities, we urge them to consider that failing to meaningfully solve the child care crisis is costing all of us billions in lost household earnings, business productivity, and tax revenue while generations of young children miss the opportunity to get the best start in life.” 

For a copy of the full report please e-mail news@usa.childcareaware.org.  

About Child Care Aware® of America 

Child Care Aware of America (CCAoA) is the only national organization that supports every part of the child care system. Together with an on-the-ground network of Child Care Resource and Referral (CCR&R) organizations working in states and communities, CCAoA advances high-quality, affordable child care and turns a patchwork of resources into a system that works for everyone. Together we make America child care strong—and that makes everyone stronger.