SANTA FE, N.M. — New Mexico has made history by becoming the first state in the nation to establish a universal childcare program that covers costs for families at every income level, following through on commitments made by Democratic Governor Michelle Lujan Grisham.
While parents nationwide struggle with overwhelming daycare expenses that often force them out of the job market, political leaders from New York to San Francisco have been working to expand access to affordable and subsidized childcare options. The political implications are significant as concerns about budget instability and potential fraud create challenges.
Other states have taken different approaches: California has removed copayments for certain families, Washington and Oregon have established payment caps for families, and Vermont uses employer payroll taxes to support childcare subsidies.
New Mexico’s approach depends largely on revenue generated from oil and gas operations, including profits from a newly established $10 billion early childhood education trust fund. This creates a complex situation for a progressive governor who originally sought to limit the industry’s influence.
“I think you’re going to see more states look for ways to do it,” the governor said Thursday. “It’s really a workforce engine, while paying real respect to the affordability affordability crisis that families have.”
With Lujan Grisham’s term ending next year, state legislators concerned about unlimited spending chose a measured approach during the legislative session that concluded Thursday. They maintained flexibility to implement copayments should the state’s financial situation worsen, representing a concession the governor had to accept.
State officials report that an additional $700 million will be directed toward New Mexico’s childcare assistance program over the coming five years. Copayments remain improbable and would require 90 days advance notice to families.
Choices regarding potential cost-sharing will be connected to new yearly reporting mandates. The early education department now has expanded power to oversee childcare providers’ employee compensation, debt management, and business operations.
State Senator George Muñoz, who co-sponsored the legislation, explained that lawmakers took advantage of the chance to establish protective measures.
“We didn’t want to end up like Minnesota, where all of the sudden there was rampant fraud,” he said, referencing federal prosecutors’ claims that billions in federal dollars were misappropriated from Minnesota-administered programs for children with autism, addiction treatment, and other services.
According to Muñoz, families will see substantial benefits, noting that free childcare will increase their disposable income.
Las Cruces resident Marianna Eanone explained that her earnings combined with her husband’s military pay previously exceeded the qualification threshold for childcare assistance. The family previously spent $1,000 monthly for their 3-year-old’s licensed home daycare and after-school care for their kindergarten student.
“It’s been a weight off to not have to worry about that,” said Eanone, who is employed by a program that helps families access child development resources.
She noted they now have financial flexibility for occasional restaurant meals, martial arts lessons for their 6-year-old, increased student loan payments, and future savings.
These advantages connect with voters, according to experts.
“They are sending a really strong signal about the importance of child care to the well-being of the families in the state, the well being of the economy, of businesses,” said Karen Schulman, senior director of child care policy for the National Women’s Law Center.
New Mexico progressively increased income eligibility for childcare assistance before implementing universal coverage on November 1, expanding eligibility to 25,000 additional children. The program saves families an average of $14,000 annually per child.
The New Mexico law permits the state to establish waiting lists when demand exceeds available childcare spaces. This approach aims to ensure priority access for children in challenging situations, including those in severe poverty, children with disabilities, and those facing developmental delays.
The measure also addresses worries that rapidly expanding childcare subsidies across all income levels might reduce availability for low-income families. Legislative analysis showed that participation from low-income families dropped as assistance expanded to higher-earning households.
Elizabeth Groginsky, who leads New Mexico’s early childhood education department, said legislators also preserved funding flexibility for recently approved initiatives to enhance childcare quality, increase minimum wages, and extend operating hours through improved state reimbursement rates.
However, childcare availability remains limited throughout much of New Mexico, even as the state expands assistance beyond working parents to include grandparent caregivers, foster parents, and individuals experiencing homelessness.
Lawmakers have forwarded separate legislation to the governor aimed at increasing home-based daycare and childcare centers in residential neighborhoods by superseding certain local zoning and permit requirements, including homeowner association restrictions on childcare operations.
