This state becomes first to offer universal free child care

Last month, New Mexico Gov. Michelle Lujan Grisham announced that starting Nov. 1, the state will guarantee no-cost universal child care for its residents.

The initiative makes early child care freely available to all New Mexicans, regardless of income. The groundbreaking program is the first of its kind in the United States.

“Child care is essential to family stability, workforce participation, and New Mexico’s future prosperity,” said Lujan Grisham in a statement in September.

“By investing in universal child care, we are giving families financial relief, supporting our economy, and ensuring that every child has the opportunity to grow and thrive.”

New Mexico consistently ranks among the poorest states in the nation, with poverty levels often reaching percentages in the mid- to high-teens, according the U.S. Census Bureau. With that in mind, the state under Lujan Grisham has taken considerable steps in the past several years to provide its residents with ample access to a good education, which is a commonly understood pathway to break cycles of poverty.

For New Mexico residents, state college is already tuition-free and the state’s early childhood assistance program has been funded for eligible applicants for the past three years. Also, free breakfast and lunch has been provided for public school students since 2023.

“We don’t see this as an expenditure, this is an investment. ... We are going to see change in crime, we are going to see changes with poverty,” said Kendal Chavez, deputy secretary of New Mexico’s Early Childhood Education and Care Department.

“This for us as a state — both on the big S, state executive side, and also the people of New Mexico — is the smartest investment we could make."

A handout or just a leg up?

According to the governor’s office, the average savings per family will be $12,000 a year, per child. In comparison, families in Utah spend around $13,000 per year on early childhood care. When the mean income for a family of four in New Mexico is around $90,000, those extra dollars represent a significant change in their financial futures.

“Families can buy houses and invest money in retirement and do the things that we know continue to pull families out of poverty and prepare them for a long-term, happy, healthy, successful life,” Chavez said.

She said she believes people in the state want to do whatever they can to change their future, and that this effort — supporting families and education — is the best way to do it.

“Families here just culturally understand that investing in babies, moms, young families and families in general is how we continue to pull ourselves out of poverty and really create a brighter future for everybody,” Chavez said.

There has been some pushback from state Republicans who say the funds will create government dependencies and allow wealthy families a state subsidy.

“Programs like child care assistance should serve as a hand up for the neediest of families so it serves as a tool that can empower parents to advance their careers and improve their lives,” New Mexico GOP Chair Amy Barela said in a Sept. 9 statement.

“The governor’s idea of ‘universal child care’ would also be a permanent handout for the wealthy to pay for their in-home nannies.”

How the program works

“There’s many variables, but the most straightforward process is your kid’s already in child care, you apply, and then the state takes over payment and executes a contract directly with the provider,” she said.

Applicants fill out a form on a state website that tracks demographics and income levels to ensure funding comes from the right state accounts. Once that process is complete, the state then pays the preferred, registered provider of the parents. There are no copayments or eligibility requirements.

Not all providers are required by the state to register as contractors of the program, nor are all parents mandated to use the funds that are available.

For families that have stay-at-home parents or relatives taking care of children, they will not receive a direct credit from the state as part of the program. If those families place their children into registered programs, then New Mexico will pay for child care.

At the moment, state funds pay child care for 32,000 kids. The governor’s office hopes that number increases to 58,000 over the next year and a half.

The state does not yet have enough child care capacity to reach that number. The governor and Chavez said New Mexico doesn’t have programs to take care of approximately 12,000 infants and toddlers.

It is not a small number, but it doesn’t necessarily mean the state is missing all of that capacity. There are providers that have yet to register, and children who are already in child care that have not applied for assistance. There will still be a delta between kids and providers, but the state is working to address that, too.

Where do the funds come from?

The effort to get universal child care guaranteed by the state is at least five years in the making at the governmental level, with other efforts from grass roots and community organizers going back even further.

“For families in New Mexico, this was sort of a beautiful surprise, but those of us that have been in the early childhood space know that we’ve been ripping the Band-Aid off slowly,” Chavez said. “Now we figured we might as well finish the job.”

To explain how the guaranteeing universal early child care for New Mexicans, Chavez ran through the timeline, describing the key events that led to the historic achievement.

In 2019, New Mexico became one of the first states to appoint a cabinet level position dedicated to early childhood education and care. Lujan Grisham announced Elizabeth Gorginsky as the state’s first secretary in the role.

Around the same time the New Mexico Legislature — working with the governor’s office — created a trust fund that was to be entirely dedicated to early childhood costs. The Early Childhood and Care Education Fund was signed into law in 2020.

“In 2020, essentially, we socked away — invested — $300 million in a fund," Chavez said. “That money was put up and it’s now between $9 and $10 billion.”

That fund distributed $22 million in 2022, and the amount it is stipulated to allocate for subsequent years is $30 million.

In 2022, the state increased who was eligible to receive state assistance from those making 200% above the federal poverty level to those who are 400% above the line.

“For context, in 2025 at 400% (of the federal poverty level), a family of three is about $109,000, a family of four is $129,000,” Chavez said. “They aren’t luxuriously wealthy families.”

The state also secured a second revenue stream in 2022 for the early childhood system by constitutional amendment, allocating some cash from the state’s Land Grant Permanent Fund into the system.

Copayments for families that were 400% of the federal poverty level were eliminated, which made early child care entirely free for participating families.

“Now, starting Nov. 1 through rule we are removing income limits for child care assistance in the state,” Chavez said.

What are the next challenges?

The current program was created as a rule, rather than legislation but is fully funded through the end of 2026. Like any other form of government law or action, it can still be undone in the future.

Chavez reiterated that because the program is funded for the next year and a half, participating families have a fairly long time to get used to such a beneficial program.

“It’s about the ’27 budget. That’s where the negotiation is going to be with the legislature,” she said.

“Our theory of change here is that the uproar that we’re going to get from families and community is going to make these investments worthwhile for the legislature. And then we’ll have a beautifully packaged, ready to go system of care for the next governor.”

Despite opposition from Republicans, Chavez and Lujan Grisham are convinced that New Mexico families want the program.

“There are some naysayers around that ask if we can afford it. There are questions being asked even in the moment, ‘Is this the best use of public dollars?’” Chavez said. ”Our response is, ‘We have the money and this is the smartest investment we could make.’”