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Despite federal investments in early care and education, access to affordable, high-quality childcare is often determined by which state a family lives in. According to new data, there are wide disparities between states in terms of how much money they鈥檙e willing to put into their systems. A lack of state investment is already leading to a decline in childcare supply, a trend that is predicted to worsen.

鈥淲hat we want is that, if and when families need it, there鈥檚 childcare that鈥檚 available, that works for their needs, that鈥檚 affordable and high quality,鈥� said Anne Hedgepeth, senior vice president of policy and research at Child Care Aware of America. 鈥淲e鈥檙e seeing a lot of gaps in that promise right now.鈥�

To get federal childcare funding, states have to put a minimum amount of their own money into the system as well. But of state funding for childcare and preschool in fiscal year 2026, conducted by Child Care Aware of America, found that seven states 鈥� Arkansas, Idaho, Missouri, Nevada, Rhode Island, West Virginia and Wyoming 鈥� don鈥檛 spend any money above that bare minimum. And a handful of states don鈥檛 spend more of their own money on preschool than what is strictly required: Arizona, Idaho, Montana, New Hampshire, South Dakota, Utah and Wyoming. Idaho and Wyoming find themselves on both lists, putting nothing extra into either system. 

The lack of additional investment has a lot of root causes, from political hesitance to the realities of state budgets, which must be balanced every year, Hedgepeth said. In part, she said, the problem stems from the end of federal funding from the American Rescue Plan Act, which infused billions of dollars into the system and allowed states to make but has since disappeared. Other constraints include a reduction in tax revenues and cuts to federal programs stemming from the Republicans鈥� One Big Beautiful Bill package that passed last year. 

No matter its source, the lack of funding creates 鈥渁 frustration for parents and families and childcare providers on the ground,鈥� Hedgepeth said. Without more state investment, legislatures are unable to improve the system by, for example, expanding their subsidy programs to reach more families 鈥� or even to serve all eligible ones 鈥� or reimbursing providers the amount it actually costs to care for children instead of at lower rates. That has led to over a dozen states recently instituting or expanding waiting lists for childcare subsidies, leaving parents to try to pay for care out of pocket. The waitlists hurt providers, too, if they can鈥檛 enroll new families, which can lead to closures of classrooms and even entire programs. 鈥淭he whole system suffers,鈥� Hedgepeth said. 

State spending disparities have also created an uneven national system that leaves parents better or worse off depending on where they live. The study analyzed total investments for each child under age 5 for 37 states and found that spending ranged from less than $500 per child under age 5 to more than $5,000 per child. Eleven states spend between $1,500 and $9,900 per child, with Washington, D.C. spending the most. 

鈥淲e do have really different experiences state-to-state, based in part, on what states are putting into their childcare and early learning systems,鈥� Hedgepeth said. That creates frustration for families, especially those who move between states and have to navigate such different systems. But it hurts everyone. 鈥淚t also really presents a challenge when we think about having an overarching goal when it comes to child development and support of our earliest learners,鈥� she said. Children arrive at kindergarten with a variety of readiness levels depending on what was available to their families before then, she pointed out. That necessitates instituting 鈥渁 more robust floor鈥� so that there is a baseline across the whole country.

Hedgepeth sees a silver lining: In the states that are failing to spend more of their own funding, 鈥渢here is room for these states to do more and maybe even an appetite.鈥� Some of them signaled in their recent legislative sessions that they want to invest more, she said. of governors talked about childcare and early childhood education in their state of the state addresses this year. She also noted that, since the pandemic, all states are at least fully meeting the federal match requirement for childcare funding, even if many aren鈥檛 going above and beyond. There were some years before 2020, mostly in 鈥渆xtraordinary circumstances,鈥� such as a recession or budgetary challenge, when some states did not even spend that much, she said.

Even so, some states are moving in the wrong direction. Child Care Aware of America found that six states 鈥� Florida, Kansas, Kentucky, North Carolina, New Hampshire and Rhode Island 鈥� decreased how much of their own money they spent on childcare and preschool in fiscal year 2026 compared to fiscal year 2025. West Virginia invested in childcare in fiscal year 2025 but then failed to do so in fiscal year 2026. 

According to from Child Care Aware of America, this lack of state spending has led to the first decline in the number of licensed childcare centers in several years. In the years directly after the height of the pandemic, between 2021 and 2023, childcare supply experienced 鈥渞obust growth,鈥� Hedgepeth said, after states made investments that 鈥減aid off in terms of making it possible for childcare programs to open.鈥� But between 2024 and 2025, the number of licensed centers declined by 1%. 

Hedgepeth cautioned that the data is messy and the drop is 鈥渧ery, very small.鈥� Still, she said, 鈥淚t is very clear to us that we are not moving in the direction we need to be moving.鈥� of American children already live in childcare deserts, according to a report from the Center for America Progress. In states that aren鈥檛 spending enough for providers to be able to open and operate with some semblance of financial stability, 鈥渢he supply trend is going to continue in the wrong direction,鈥� she said. 

This is especially concerning given that state budgets are about to enter a particularly rough patch. The One Big Beautiful Bill Act enacted the to the Supplemental Nutrition Assistance Program and Medicaid in history, cuts that state budgets have to absorb. The possibility that states will feel forced to further pull back from childcare and early childhood education funding in order to cover for some of those reductions is 鈥渧ery much on the horizon,鈥� Hedgepeth said. While some states started to worry about the problem in their most recent sessions, next year鈥檚 legislative sessions are where the cuts are likely to really hit home, she said. 鈥淲e鈥檙e looking at a tough several years.鈥� 

Congress can act by increasing funding for childcare programs, something it has with . 鈥淚t鈥檚 very clear that the gap is there and it needs to be closed,鈥� Hedgepeth said. 鈥淲e have a very direct call to action here, which is, 鈥楲et鈥檚 make investments to make sure we grow the supply for childcare.鈥� 鈥�

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