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

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.

Office of Children and Family Services Commissioner Sheila Poole said, "We are overjoyed with this unprecedented funding for child care assistance. This underscores the significance of child care access for our families. They deserve this, and our providers deserve this. The pandemic wreaked havoc in this industry, and these changes will help support those who need it most and will bolster our providers even more."

Senator Chuck Schumer said, "As Majority Leader, I promised I would deliver the robust funding New York needed to come back from the pandemic stronger than ever, and now thanks to the American Rescue Plan New York is able to make the largest investment in child care in the state's history. This investment means struggling families will get the financial assistance they need, more help for childcare providers, and eliminating childcare deserts. Affordable childcare essential to our economic recovery, and I am proud to have delivered the funding to make today's historic news possible."

Senator Kirsten Gillibrand said, "Like much of our nation, New York is facing a child care crisis," said Senator Gillibrand. "Affordable, high-quality child care is out of reach for too many parents, particularly in underserved neighborhoods. I thank Governor Hochulfor taking this critical step to make child care more accessible and I'm proud to have fought to pass the American Rescue Plan, which has helped make this historic investment possible."

Representative Paul Tonko said, "Our country is still feeling the financial hardships from COVID-19, and the impact on the child care system in particular has left many parents reeling and without affordable, accessible care. My Democratic colleagues and I took strong action to tackle this crisis and support kids in need, including expanding the Child Tax Credit advanced through our American Rescue Plan. This tax cut helped 3.3 million children in New York State alone. As we continue working to deliver relief, today's announcement will play a key role in supporting hardworking parents as they provide for their families and strengthen our economy."

Representative Adriano Espaillat said, "Child care providers are essential to the success and wellbeing of working families across New York. One of the many lessons we learned during the public health crisis is that we cannot move families forward if we leave child care providers behind. I commend Governor Hochul on today's announcement to further invest in child care services and support for families around the state. This unprecedented investment will offer a tremendous level of support to child care providers and ensure they can provide the necessary services that families need."

State Senator Roxanne J. Persaud said, "Today's announcement reflects the significant work of the Governor and the Legislature to invest in New York's families and the childcare sector. Child care deserts are not from lack of demand but underinvestment. This year's budget not only expands eligibility to many more families but includes significant funding for new and existing providers to help meet the increasing demand for care."

Assemblymember Andrew Hevesi said, "I am incredibly proud of what we achieved in this year's state budget and I commend Governor Hochul, Commissioner Poole, and everyone at OCFS for their swift action in getting these funds directly to those who need them. Expanding subsidy eligibility, funding new programs in child care deserts, and increasing the reimbursement rate to providers will bring child care to thousands of children and families that have been struggling and made to go without. I look forward to building upon these victories to ensure that every child is cared for and set up for success."

Brooklyn Borough President Antonio Reynoso said, "Childcare is one of the top financial concerns of any family. I'm glad Governor Hochul is making this investment which will make it easier for families to obtain reliable and safe care for their children. As a parent myself, I know how challenging and daunting childcare can be. Those who have the authority to make important and lifechanging investments like today's have the potential to change people's lives, allowing families to dedicate time to work or continuing education and vocational training that will allow them to grow."

For additional information on this funding or the Child Care Assistance Program, families and providers should contact their local department of social services.