FINANCE News:

In a new analysis, state budget experts from The Pew Charitable Trusts examine how New Mexico managed to become the first state to provide no-cost childcare for all families.

Find the analysis here: https://www.pew.org/en/research-and-analysis/articles/2026/04/28/are-state-trust-funds-an-answer-to-rising-child-care-costs

Instead of raising new revenue for this new program, New Mexico channels oil and gas windfalls into its Early Childhood Education and Care Fund (ECECF), created in 2020 by lawmakers. That has helped to build a dedicated funding stream that provides the majority of the funding for the state’s Universal Child Care program and tackles one of the biggest obstacles to childcare expansion: cost. The state seeded the ECECF in 2020 with a one-time general fund appropriation of $320 million; the ECECF now totals around $11 billion, and advocates say the state’s achievements are a landmark win for childcare.

Still, some critics warn that the state may be overpromising. They question whether the program can truly be considered “universal” when there are not yet enough childcare spots available for families that want them, particularly in rural areas and for infants and toddlers.

Efforts to increase access to and boost the affordability of early childhood care have gained significant momentum in recent years. But as pandemic-era aid fades and tax revenue growth stagnates, there are concerns that recent gains will be lost. There are already signs that states are reducing childcare spending as they look for budget savings. In some instances, they have increased revenue to try to sustain their programs.  But for many states, the question is no longer whether to invest in childcare – but how to structure those investments to endure.

To learn more about this analysis, or to discuss state budget conditions in general, please feel free to contact Pew Charitable Trusts, can@pewtrusts.org