Despite reforms, New York faces childcare cost crisis

ALBANY, N.Y. (NEXSTAR) — While families in New York struggle to afford childcare, childcare providers struggle with low wages. Though the state offers subsidies and temporary wage boosts, the sector remains in crisis, with middle-income and working-class families frequently left out.

That's according to three reports released in 2024, with the most recent—from the Fiscal Policy Institute—released on November 1. A September report from the Children’s Agenda based in Rochester and an April report from the New York State Child Care Availability Task Force both made the case for providing statewide universal childcare. You can read all three reports at the bottom of this story.

Among the most expensive in the nation, New York childcare absorbs a significant chunk of a family's income. Especially in the city—the Bronx and Brooklyn top the list—the financial strain contributes to population loss. Families with young kids are 40% likelier to move away.

"If New York wants to retain working middle class families, they have to do something really urgently," said Rebecca Bailin, Executive Director of New Yorkers United for Childcare.

Total federal funding for New York's child care jumped from $303 million in 2010 to $608 million in 2024, with $2.5 billion more in COVID funds in 2020 and 2021 to stabilize the industry and prevent closures. And the state invested $1.2 billion more in child care funds for 2024 to 2025, with another $592 million in reserve.

"Under Governor Hochul’s leadership, a historic $7 billion investment has been made over four years to expand access to child care and improve affordability for New York families," reads a statement from the New York State Office of Children and Family Services (OCFS). "[We're] committed to empowering the state’s child care system by fortifying the workforce and minimizing obstacles for families seeking high-quality child care."

New York expanded its Child Care Assistance Program (CCAP) that gives vouchers to families who earn under 85% of the state’s median income. That's roughly $91,000 for a family of three. However, although almost half of households with young children in New York qualify, only 17% take advantage of those benefits.

CCAP covers everything from licensed childcare service centers to informal caregivers, like relatives or friends, but the reimbursement rates vary by region. Families can find out if they are eligible and apply online at the OCFS website. The highest rates—about $500 a week—go to daycare centers in New York City.

Even so, childcare workers still face tight margins. The Child Care Availability Task Force report—which represents both OCFS and the New York State Department of Labor—highlighted a staffing shortage and 19% of childcare workers living below the poverty line.

"A lot of people who work in childcare are on public assistance themselves," said Assemblymember Andrew Hevesi, Chair of the Assembly Standing Committee on Children and Families.

Most are women and people of color. Their median salary, $32,900, helps illustrate why so many small providers, like family daycares, shut down. The decrease in supply in turn increases demand, driving further price spikes.

To address wage complaints, New York earmarked $500 million in federal funds to childcare workers, offering as much as $3,000 each. But those payments weren't permanent, and not enough people knew they existed. Advocates want the legislature to implement a $12,500 wage supplement every year to provide consistent support for the industry and the young families who rely on it.

"The biggest takeaway [from the Fiscal Policy Institute report] absolutely is you have to pay the workforce," said Hevesi. It makes more financial sense for a childcare provider to leave the industry and work behind a fast food counter, he said.

"We increased eligibility and fixed copays, but nothing will work unless you pay them more," Hevesi added. That's why there's a proposal to add $1.2 billion in the next budget for that $12,500 boost.

Despite reforms like lowered copays and expanded CCAP eligibility, families often can't meet work requirements, can't navigate the red tape, can't even find a provider, or some combination of the above. Families earning just above the program's income limit get no aid at all, plus immigrant families or parents who work irregular hours have still greater barriers in order to participate.

The Children’s Agenda called for a complete overhaul to the inefficient CCAP system that aggravates disparities between different groups in the state. They recommended that New York take over and directly administer the funds, because the current method widens gaps between rich and poor counties.

We're one of only eight states to distribute funds to municipal governments instead of directly to local programs. Money goes to counties based on past spending and population, so wealthy areas get more than others. Nassau County, for example, will get $130 million for 2024 to 2025. That's about $2,159 per eligible child, the highest in the state. Fulton County, meanwhile, gets about $87 per eligible child.

The report also recommended turning the program into an entitlement program. Although New York gave more to the Child Care Block Grant than ever before, a block grant can simply run out of money. Shifting to an entitlement—like food stamps—would supply funds to match the demand, and help keep families out of the red.

According to Hevesi, though, such a transformation would be a federal move. "The onus is on us, on the state, to fill in the shortcomings of the federal government when they are not going to act," he said. "There's no way the president or the senate will propose expansions to childcare."

Three bills aimed at making childcare assistance more accessible await the signature of Gov. Kathy Hochul. They would further expand block grant eligibility and get rid of limits based on parents’ work schedule or income:

• S8152A/A8878A would require that districts provide child care assistance regardless of parents' or caregivers' working hours
• S4924A/A1303A would remove minimum wage requirements for parents to qualify for child care assistance
• S4667A/A4099A would presume eligibility, giving families aid when they apply

Hochul vetoed a previous version of S8152A/A8878A for not allowing enough time to factor into budget considerations. So, the legislature passed it again, with an effective date after the next budget will be finalized.

Overall, these changes are supposed to help families with unstable schedules, like gig workers, get stable child care. They would make finding care easier for low-wage workers, and reduce delays that make families miss work. But according to the office of State Sen. Jabari Brisport—who sponsored and cosponsored the bills above—Hochul is quickly running out of time to sign these bills.

"About 90% of a child's brain develops by the time they're 5 and we need to take that seriously," Brisport said. "As a former public school teacher, it's very clear to me that child care workers should be paid like the educators they are. We can have a future where all child care educators are paid fairly for their vital work and where all children—regardless of their family's wealth or status—have an equal right to high-quality child care."

Young families in New York with low incomes will continue to bear a financial burden that can outweigh college tuition without a major a shakeup, advocates said. For example, infant care in New York averages $21,826 annually, with single parents spending about 63% of their total income. That's why the Task Force report called for universal childcare.

According to Bailin, "Tinkering at the edges of a program just isn't working." The problem with income eligibility, she said, is that middle-class families who make slightly too much money get no aid whatsoever.

"People are discouraged," she said. "Families have to jump through crazy hoops."

To that end, Brisport and Hevesi also sponsored S9853, S3245, and A4815, none of which made it far in the last legislative session. They would have launched universal child care, starting with a pilot program in 20 high-need municipalities that offered free, accessible care without means testing—just like public school. The proposals also included raising staff wages in line with teachers' salaries.

"I believe there will be no money from the federal government" with another White House under President Donald Trump, Hevesi cautioned. "Zero. Absolutely nothing. On [Election Day], federal assistance for childcare just evaporated."

Take a look at the reports below. Here's the Fiscal Policy Institute's, which came out in November:

And the one from the Children's Agenda, published in September:

And the report from the state Task Force, released in April: