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For the past year, families in need of child care assistance in Indiana have been sitting on a waitlist that has ballooned from 3,000 to 30,000 kids. It’s still climbing — and no one is coming off of it.
Emily Pike, the executive director of New Hope For Families in Bloomington, which cares for children experiencing homelessness, can’t remember a time when no families were coming off the waitlist. Before this year, she said, low-income families could expect to be on the list just a few weeks before they found placement at a center that took child care vouchers, which for most brought their costs down to zero.
But now, state officials project that no kids will come off the list until at least 2027.
That isn’t the only drastic change. In September, Indiana moved to lower its child care reimbursement rates, meaning the state will pay providers 10 to 35 percent less to care for low-income kids. Centers have had to pass those costs on to parents through higher co-payments.
Already, centers have closed classrooms as a result. Workers have been fired. Parents have pulled their children out of care.
Versions of this story have quietly been playing out across the nation, including in Arkansas, Oregon, Maryland and New Jersey. The reasons appear to be the same: States used a historic infusion of COVID-19 relief funds to improve their child care systems over the past few years, and now that the money has run dry, some can no longer keep their child care reimbursement rates up. To keep funds going to families already receiving state assistance, states have stopped accepting new children into their voucher programs and implemented waitlists.
At the same time, they’re facing cuts — or upcoming ones — in federal funding.
President Donald Trump’s tariff hikes are constricting budgets in states, like Indiana, that rely on international trade, and his Big Beautiful Bill spending package will dramatically cut funding for Medicaid and the Supplemental Nutrition Assistance Program, or SNAP. Scrambling to fill those new holes in their coffers, states have looked to child care.
“A lot of states are facing major budget pressures for various reasons and those are unlikely to get better, and very likely to get worse, as a result of the Big Beautiful Bill, said Elliot Haspel, a national child care expert. “In some ways it’s all the more alarming that states are doing this before they are feeling the full effects.”
In Arkansas, where the state proposed leveling reimbursement rates, the waitlist for child care vouchers is frozen.
Maryland has stopped offering new applicants child care vouchers because it has more children enrolled right now than it can financially support.