Over the last half-decade, New Mexico has built a reputation as a state that actually supports families with young kids. Lawmakers in Santa Fe authorized hundreds of millions in new child care spending, and grassroots activists succeeded in passing a constitutional ballot measure that dedicates a portion of revenue from a state oil-and-gas fund to early childhood education.
All told, the money represents one of the largest state investments in early childhood, earning New Mexico leaders glowing national praise. Activists in other states now regularly cite New Mexico’s organizing and legislative victories as inspiration as they push for their own funding tools.
But all the acclaim has come with an unexpected cost. In New Mexico, few want to hear about the families still struggling to access child care or the providers who are still waiting for a wage increase. New Mexico just ranked dead last again in a national child well-being ranking, for the fourth year in a row, and the state’s own newly released data shows that just 16 percent of children under age 6 are receiving child care subsidies, despite many more being eligible.
And this spring, when New Mexico lawmakers diverted child care trust fund money for the first time (to a Medicaid behavioral health program), it received nary a peep in coverage.
“It’s been a pretty quiet change, and for those who are making the decisions, it’s not really in anyone’s political interest to draw attention to it,” said Sara Mickelson, an independent child care policy consultant in New Mexico who served as cabinet secretary of the state’s Early Childhood Education and Care Department from 2023 to early 2025.
Mickelson and other child care care leaders have been thinking about the political trade-offs of dedicated child care funding streams, which today have passed in states including Montana, Vermont, and Connecticut. Some states, like Louisiana, Maryland, Georgia, and North Carolina, dedicate funding from gambling revenue to early childhood, while others, like Kentucky and Kansas, use funding from settlements with tobacco manufacturers.
These investments offer tremendous promise, and can be meaningful to families and communities, particularly as the federal government stalls on child care leadership. And in many ways, dedicated trust funds and new taxes earmarked for early childhood offer more stability than other revenue sources, like the American Rescue Plan Act money from the pandemic that expired after a few years.
At the same time, relying on money from smoking, slot machines, or drilling wells is risky; habits change, wells run dry, and settlements don’t last forever. In California, child care activists are panicking about a proposed tax cut on legal cannabis, as that would amount to an $81 million cut for child care services. The trust funds also give politicians a clear path to claim victory and move on. As the years pass, advocates have seen efforts to gut or divert funds that they thought were more securely protected.
Montana is an instructive example. Earlier this summer, Republican Gov. Greg Gianforte vetoed a bipartisan bill to expand financial aid for children of child care workers, citing the creation of its state trust fund as proof that Montana had already taken sufficient action. But of the hundreds of millions of dollars invested in the trust fund, child care is only expected to receive $10 million in the first year, and about $2 to $3 million in subsequent years from interest.
Grace Decker, who leads the Montana Advocates for Children coalition, told me that it’s been hard to see Democrats in her state tout that they’ve made “historic” investments in child care. “I think that speaks more to the history of non-investment than it does to how ambitious this investment actually is,” Decker said. “The bigger risk is folks hearing that we’ve done something really dramatic about child care, which makes it harder to say, ‘Hey, we’re definitely not done.’”
How child care trust funds can help
At their best, trust funds can transform child care from a budget afterthought into a protected investment with guaranteed revenue that compounds over time, freeing programs from political uncertainty. In Washington, DC, for example, dedicated funding enabled the city to significantly raise wages for child care providers and provide them with access to free health insurance. New Mexico has been able to extend subsidies to more than one in four children from lower-income families — with copays currently waived so parents pay nothing out of pocket. The stability also signals to providers, families, and the broader child care market that states view quality early childhood education as essential infrastructure worthy of long-term investment.
“I’m not a bold believer that there’s only one solution out there, and I think we’ve got a mixed-delivery system and that’s how we tackle the fight,” said Linda Smith, co-author of a brief published this summer by the Buffett Early Childhood Institute at the University of Nebraska that examines this financing approach.
Smith praised the fact that these trust funds have been established in red, blue, and purple states. She acknowledged, however, that the benefits can be exaggerated.
“We in early childhood, I think, are guilty of overselling some things, and there just is no single solution to a complex problem,” she said. “The investment in Montana for example is noteworthy. It’s a good first start. But it’s not the end — it can’t be.”
In New Mexico, the state has struggled to expand its offerings beyond the trust fund. It has, for example, been promising to develop a “wage and career lattice” for early childhood workers — a system that would tie pay increases to education levels and experience. (Many child care workers in the state still earn between $12 and $18 per hour.) But it has kept pushing back the deadline to enact this system, and debates continue over who should be included, and how formal credentials or previous experience should count. As a result, many providers still have not seen their salaries rise, even as their political leaders take credit for tackling the child care crisis.
Olga Grays, an early childhood educator in New Mexico who runs a home-based center in Las Cruces, has been organizing for higher wages. Back in May, she hosted a national “Day Without Child Care” protest, where centers shut down to raise awareness of the low wages that many providers still receive. Grays and her colleagues called for a guaranteed $18 hourly base wage.
“There have been big strides for New Mexico, but I think it’s still a little messy,” she told me. “I was part of the group working on the [state] career wage lattice and I still have a hard time understanding it and how it’s going to work, who is included and who is not. I feel like it’s been going on for such a long time, and they tell us one time, and then they change it, which is hard for me as a leader to then explain to my providers.”
The fight has taken much longer than Grays expected. “Two years ago we thought we were going to get a pay increase but then it went back to the table, even though the funds were there,” she said. “I still have not yet gotten a raise.”
Mickelson, the New Mexico child care policy consultant, said the political appetite for more child care spending comes down to framing. The problem she sees is that politicians’ incentives to celebrate their wins often drown out the significant gaps that still need to be addressed.
“I think the state has made a down payment, but now I would say the appetite or the will for that investment from policymakers is not as strong. If you’re thinking of this from the lens of a universal right to early childhood services for family and children, there’s still this gap, both literally in the investment and also in the narrative,” she said. “There are so many needs, so there’s a feeling of wanting to move on to a new priority. Yes, they’ve made a historic investment, but relative to what?”
Connecticut activists are gearing up for a sustained fight
Advocates across state lines have been organizing and studying each other’s wins and challenges. For that reason, leaders in Connecticut feel more prepared to not let their elected officials take too much credit for a funding battle that’s far from over.
Earlier this year, Connecticut lawmakers approved seed funding for a child care trust fund. It comes from general-fund surpluses and aims to cap family costs at 7 percent of household income. The legislation will also fund wage parity and health insurance for providers, along with upgrades to facilities and digital infrastructure.
Connecticut’s child care advocates originally pushed for $1.5 billion annually from a new employer tax to fund universal child care up to age 12. They secured a $300 million investment from the state’s unusually large budget surplus, which exists because Connecticut is home to many hedge funds and private equity firms that generate hefty tax revenue.
The investment will go into a trust fund that will cover children until age 5, and take seven years to mature. While this should hopefully make preschool for families earning under $100,000 free by 2028, and capped for higher-earning families down the line, it’s ultimately slower and more limited than advocates’ original vision. This is especially frustrating for activists given that the state has roughly $4 billion in reserves.
Now, Eva Bermúdez Zimmerman, a leader behind Child Care for CT, a statewide coalition that organized for the investments, told me they’re planning to fight for additional funding to speed up the timeline, expand coverage to include after-school and summer programs for older kids, and fix gaps like health insurance for undocumented child care workers.
Zimmerman acknowledged they’re already starting to face the challenge activists have seen in other states: elected officials claiming they’ve “solved” the child care problem.
“Immediately after the bill passed, the governor [Ned Lamont] had talking points about this being ‘just the beginning.’ But now that election season is starting, he’s starting to act like a candidate, and there’s been a shift in the last two weeks with press conferences he’s done, where he’s been campaigning on universal child care and saying, ‘We fixed it, it’s done,’” Zimmerman said. “We have a special session coming up in October, and so I will be curious to see if the legislature holds firm to where we were literally two months ago, emphasizing that these investments are just the beginning.”
Zimmerman says she knows their legislation puts Connecticut on the national map, and she’s proud of that, but she’s clear-eyed that what they’ve won is not enough.
“We know we need to fight, and there’s a lot of tweaking that we need to do, and clean-up that we need to do,” she said.
The attitude in Connecticut is encouraging, says Mickelson, who believes it would have helped in her state if New Mexico advocates had been more ready to push back against “mission accomplished” rhetoric after their trust fund was established.
“There’s just a constant need to advocate for early childhood, because of our societal attitudes towards care in general and the education of young children,” she said. “I know it’s exhausting, but when I think about our work here, especially if you have dedicated funding, it’s just easy to lose sight or maybe feel too comfortable in the growth patterns — but you can’t let your foot off the gas. You can’t let your guard down or lose sight of the real vision, and I think a lot of that is dependent on outside advocacy.”
Update, August 25, 10 am ET: This story was originally published on August 25 and updated to include details on an ongoing fight between child care advocates and the legal marijuana industry in California.
This work was supported by a grant from the Bainum Family Foundation. Vox Media had full discretion over the content of this reporting.
