A Colorado Sun series
This series aims to unpack why child care costs have become so high for both families and providers and will also explore what it will take to make child care affordable and widely available across the state.
Emily Murphy cried when she got the message from New Mexico’s early childhood department in November: she and her husband would no longer have to pay for child care.
On Nov. 1 New Mexico became the first state in the country to offer free care for kids whose parents work or are in school.
“This is life-changing for us,” said Murphy, a 37-year-old mom of two. Murphy, a customer service manager, and her husband, a firefighter, will finally be able to pay off some credit card debt, she said, and maybe even say yes to her daughter’s pleas for ballet lessons.
A Colorado Sun series
This series aims to unpack why child care costs have become so high for both families and providers and will also explore what it will take to make child care affordable and widely available across the state.
“We’ve been surviving and we are hoping this will help push us a little bit toward thriving,” she said.
Murphy and child care providers in New Mexico say the new policy is proof their state government is listening to them. Child care costs have far outpaced wages in the U.S. and there are far fewer spots than kids who need them, putting desperately needed care out of reach for even middle and some upper income families.
But most Coloradans are still waiting for relief.
Colorado parents with two children — an infant and a 4-year-old — have to shell out about $37,800 per year for child care, according to the Economic Policy Institute. And the state spends far less than New Mexico and many other states to support families with child care payment assistance.
It doesn’t have to be this way.
For years, New Mexico has been steadily reducing the cost of child care for families and working to guarantee enough slots for every child who needs one. Child care experts in Colorado and the rest of the U.S. have long been fighting for policies like New Mexico’s that aim to make care for infants to 4-year-olds as accessible as K-12 education.
Those policies could put New Mexico on track to catch up to most of the developed world, where countries spend far more money per child than the U.S.
Studies show that high-quality child care has long-term benefits for children and for society, including higher educational attainment, better health and less involvement in crime.
“We’re seeing a pivot point potentially in how child care is approached,” said Elliot Haspel, an early childhood education expert at Capita, a family policy think tank. “The government should make sure all families have access to the child care they need. We should treat child care like social infrastructure the way we treat fire departments, libraries, schools and roads.”
More than Coloradans can afford
Colorado’s child care problems for families are manyfold.
First, there are not nearly enough child care slots.
The best estimates show there are about 75,000 more children 5 years old and under with all parents in the workforce than there are licensed child care spots in Colorado. The gap doesn’t account for families who find child care with family, friends or neighbors.
Second, the slots that do exist are way too costly.
The average annual cost of infant care in Colorado is about $21,800, or $1,800 per month, making Colorado among the most expensive states for infant care, according to the nonprofit Economic Policy Institute, a liberal-leaning think tank. Infant care for one child takes up nearly 18% of a median family’s income in Colorado, far above the affordability standard of 7% set by the federal government.
“Child care is too expensive for most families no matter your income,” said Lisa Roy, executive director of the Colorado Department of Early Childhood. “Most Coloradans are paying more than we can afford.”
Infant care is the most expensive for families because one caregiver can look after no more than five infants at a time, meaning child care centers must spend much more on personnel for infants than for 3- and 4-year-olds, who require one educator for every 10 kids.
Child care for a 4-year-old in Colorado costs about $16,000 per year, or $1,300 each month, according to the Economic Policy Institute.
Colorado’s new paid parental leave program offers parents 12 weeks of leave at reduced pay to care for their newborn, meaning parents who use the program must find child care when their infant is just months old.
A public good in New Mexico
New Mexico offers a very different reality for parents.
As of Nov. 1, New Mexico made its full-time, year-round child care payment assistance program open to all parents of infants to 13-year-olds who are working or in school. Grandparents raising grandchildren, parents caring for babies born substance-exposed, parents experiencing housing instability, and families involved with the state’s Children, Youth and Families Department do not have to meet the work or school requirement.
Participating families will save an average of $12,000 per year on child care costs, the state estimates.
“It feels like the absolutely right thing to be doing at a time like right now when people are looking for help and relief in ways that are truly tangible,” said Elizabeth Groginsky, New Mexico’s secretary of the Early Childhood Education and Care Department.
But, this doesn’t mean that every kid who needs care can suddenly get it. New Mexico still struggles with a capacity problem similar to Colorado’s — the state estimates an additional 12,000 child care slots are needed to accommodate all kids who qualify.
Instead of waiting for the supply to develop, and then making the care free for families, Groginsky said the state decided to try to do both at the same time.
New Mexico has started a $13 million low-interest loan fund for people who want to start new child care facilities. Groginsky hopes the legislature will add more to the fund in coming years.
“We are not going into this blindly,” she said. “We have well-laid plans and strategies about how to achieve our goal of capacity.”
In just the first few weeks, the policy was a game changer not only for parents, but for child care providers.
The state pays providers a set rate per child in their care, depending on the age of the child and the quality rating of the child care center. For an infant attending a top rated center full time, the rate is $2,175 per month, or $26,100 per year. For a full-time preschooler, it’s $1,182 per month. Rates are slightly lower for licensed home-based providers.
Providers can receive a higher payment from the state if they are open at least 10 hours during the day, at least five days a week, and start their entry-level staff at $16 to $19 per hour, depending on the rating of the center. The enhanced rate is $2,500 per month, or $30,000 per year, for an infant attending a top rated center full time and $1,375 per month for a preschooler.
Some centers that are able to charge parents more than the state rates have opted out of the program.
Alison McPartlon, director of the University of New Mexico-Taos Kids’ Campus, said for the first time in years she will be operating the center in the black.
McPartlon’s center, which serves 65 children from infants to 5-year-olds, has more of a financial cushion than others because of its association with the university. Still, McParlton has struggled to make ends meet.
“What I would need to charge parents never felt reasonable,” she said. “I never wanted to push that middle income family to the point they couldn’t afford it.”
Now, she said, the state is paying her much more than what she was able to charge parents.
“I can take a deep breath and really ensure that my teachers are making a livable wage,” she said. “I’m really happy that New Mexico families don’t have to have this stress about which bills to pay, who should stay home.”
Taylor Etchemendy, director of INSPIRE Bilingual Early Learning in Taos, said before free universal child care, the state was covering the child care costs for about 75% of the 250 kids at her four child care centers.
She was having to charge the remaining parents less than it costs to care for kids because many families in Taos couldn’t afford the true cost, especially for more than one child.
Now, the state is paying Etchemendy almost double what she was charging families, making her business more sustainable.
“It’s a defining moment for families and educators across the state that affirms early education as a public good and fundamental right for all children and families,” she said.
So how did New Mexico do it?
New Mexico’s prioritization of early childhood education can be traced back to the pandemic, when the failures of care infrastructure were laid bare for the entire country, after more than a decade of grassroots advocacy from child care providers.
For years, New Mexico has been ranked among the worst states for child well-being, and Gov. Michelle Lujan Grisham, a Democrat elected in 2018, vowed to make changes.
In 2020, the state created an Early Childhood Trust Fund, championed by Lujan Grisham, using federal pandemic relief funds and tax revenue from the oil and gas industry to expand the number of families receiving child care payment assistance. The fund is supplied by returns on the original $320 million investment and ongoing appropriations from the legislature. The fund now holds more than $10 billion.
Then, voters overwhelmingly passed a constitutional amendment in 2022 that allowed a state fund of oil and gas tax revenue reserved for K-12 education to be tapped for early childhood education. Each year, a portion of the fund’s total value goes to the state’s child care department.
The state also receives federal funding for child care.
With the surge in state funding, New Mexico was able to remove income thresholds for child care assistance last year, making it the first state to offer free universal child care.
All in all, New Mexico estimates it will spend about $446 million on the universal child care program in its first year serving about 46,000 kids and build up to about $728 million in the fiscal year that starts in July 2028 serving about 59,000 kids. Between about 75% and 85% of the funding will come from the state each year, the childhood department projects.
Some of the funding hinges on state lawmakers continuing to invest in the program. The Democratic-controlled legislature has indicated that it’s on board, with some limits. A proposal making its way through the statehouse now would fully fund the program, but require copays from wealthier families under certain economic conditions, like high inflation, low oil prices or if demand for the program is far higher than expected.
Republican lawmakers have questioned its sustainability. After a recent vote to move the funding forward, Senate Republicans called it a “deceptive and wildly expensive program,” Source NM reported.
Still, Groginsky called the program “the blueprint for the nation.”
“We are fully aware of our responsibility to be successful,” she said.
What’s Colorado doing?
New Mexico was already helping families who make 400% of the federal poverty limit, or $106,600 for a family of three, pay for child care, among the most generous income thresholds in the country.
Colorado, on the other hand, helps families who make between 185% of the federal poverty level, or about $39,000 for a family of three, and 300% of the federal poverty limit, or about $80,000 for a family of three, depending on the county.
Colorado’s population of about 6 million is much larger than New Mexico’s 2.1 million. But Colorado also has a much larger state budget of $43.9 billion compared with New Mexico’s $29.2 billion. The median family income for a family of three in Colorado is about $120,000, compared with $78,000 in New Mexico.
Families must navigate a much more fragmented child care assistance system in Colorado, and only a small fraction receive any assistance paying for child care at all until their kids are 4 years old and become eligible for some free hours of child care when school is in session.
Together, the state’s two programs to help families, the child care payment assistance program and the preschool program, cost the state about $600 million.
In the fiscal year that ended in June, the Colorado Child Care Assistance Program For Families helped 27,602 children at a cost of about $191 million, covered mostly by federal funding. Some parents with low incomes who qualify for the program are still required to pay a portion of the cost of child care.
The budget for Colorado’s child care payment assistance program this fiscal year has decreased to about $186 million. The Trump administration has tried — so far unsuccessfully — to cut child care funding for Colorado and four other states, which would end Colorado’s child care payment assistance program.
Twenty-four Colorado counties stopped accepting new students in response to a federal government rule in 2024 cutting the amount families pay. This has left thousands of families without aid.
Colorado’s preschool program for 4-year-olds, started by Gov. Jared Polis, is available to all kids in the year before kindergarten and provides 15 hours per week of care from August to May. The program is funded by a voter-approved tax on cigarettes and other products that contain nicotine, and money from the state general fund.
If the budget allows, children from families with low-incomes who are also unhoused, dual-language learners, eligible for special education or in foster care can qualify for more hours.
Last year, the state spent $338 million on the preschool program serving 49,126 children, including 5,728 3-year-olds with special needs.
Under Polis’ leadership, Colorado also made full-day kindergarten free for all families during the school year, a program enacted years after many other states adopted a similar benefit.
Roy, who runs the Colorado Department of Early Childhood, said New Mexico’s achievement is admirable. But, she said, with Colorado’s state budget this year again facing a roughly $850 million shortfall, there are no funding sources identified that would be sufficient to support free universal child care.
“CDEC, alongside the governor, has prioritized this investment in early learning in a way that is historic,” she said of the preschool program and full-time kindergarten. “It’s not a question of whether we prioritize families. It’s, ‘How do we continue to balance child care needs with other needs that families have, like housing?’ That is the question.”
Cost of universal child care in Colorado: around $2 billion
The Taxpayer’s Bill of Rights requires any tax increase, like one that would be needed to raise enough revenue to fund more child care assistance, to be approved by voters.
A recent analysis modeled by Brodsky Research & Consulting for Gary Community Ventures estimated that at current child care teacher pay levels it would cost about $1.8 billion per year, including what the state currently spends, to provide free universal child care. If child care workers were paid the same as kindergarten teachers, universal child care would cost $2.1 billion, including what the state currently spends.
These estimates include care for 153,768 kids from birth through age 4, with 60% using full-time care and 40% using part-time care.
Gary Community Ventures provided funding for this story, which is part of an ongoing reporting project looking at the state of child care in Colorado.
Colorado spends about $10 billion on K-12 education.
New Mexico’s decision to largely rely on oil and gas tax revenue to fund its universal child care program may have made it more popular with voters. In Colorado, oil and gas tax revenue goes to school districts, local governments and industry regulation.
Other states that don’t have the same natural resources funding source as New Mexico to tap are far outpacing Colorado in child care assistance.
Vermont passed a payroll tax in 2023 with support of the business community that allowed the state to provide child care payment assistance to families making 575% of the federal poverty level, up from 350%, lowering costs for families. Connecticut started an endowment last year to grow surplus state funds and direct them toward child care assistance for families. New York City’s newly elected Mayor Zohran Mamdani campaigned on providing universal child care, and New York Gov. Kathy Hochul has promised state funding to make it happen starting with free care for all 2-year-olds.
In the absence of similar statewide action in Colorado, some cities and counties have stepped in to help families.
Denver provides tuition assistance for families of kids in pre-kindergarten, funded by a city sales tax. Voters in Eagle, Garfield, Pitkin, Gilpin, Hinsdale, Larimer and Ouray counties voted in November to raise taxes on lodging or sales to fund child care assistance.
For Murphy, the Taos mom of two, New Mexico’s decision to help all families pay for child care feels like a much needed support, especially as the federal government has made historic cuts to social safety net programs.
“It comes down to, ‘What do you want government money to fund?’ she said. “I’m really proud to be a New Mexican right now.”