New Initiatives Will Streamline the Child Care Application Process, Expand Access to Child Care, and Support New York’s Child Care Infrastructure

Governor Kathy Hochul today announced a sweeping plan to make New York’s child care system fairer, more affordable, and easier to access, as part of the 2023 State of the State. The proposals include plans to streamline and centralize the child care application process, expand access to the system, and provide assistance to families, workers, and businesses to support New York’s child care infrastructure.

“As someone who had to put their career on pause because of a lack of affordable child care options, I understand how important this lifeline is for families,” Governor Hochul said. “While we have made major investments to boost child care funding, there are still too many families who aren’t able to access these resources. That is why we are taking critical steps to improve the process of finding child care, widen program eligibility, and support our child care workforce.”

Child care programs have long operated on the slimmest of margins, unable to raise tuition high enough to cover the enormous costs of providing quality care, including living wages to the staff nurturing and educating our youngest children. At the height of the pandemic, as classrooms closed and entire programs shut their doors, many families struggled to find alternative care arrangements, putting their jobs – and their economic stability – in jeopardy. As a result, women left the workforce at a disproportionate rate while families, for whom not working was not an option, were left to navigate a fragile, patchwork system.

Last year, Governor Hochul announced a historic $7 billion state investment in child care. Still, child care uptake remains low, and the Governor remains committed to helping families access the resources that are available. That’s why Governor Hochul’s proposal will focus on three main goals to overhaul New York’s child care system: making it easier for families to access financial assistance for which they are eligible; providing support to the child care workforce; and engaging the business community in new ways to build supply and reduce costs for more families.

New York State Office of Children and Family Services Acting Commissioner Suzanne Miles-Gustave said, “I applaud Governor Hochul for recognizing the urgency and significance of transforming New York’s child care system. This comprehensive and ground-breaking array of initiatives will facilitate greater access to child care for our hard working parents, increase wages for our deserving child care staff, who give so much of themselves while often struggling to make a living wage and ensure the stability of child care programs as the demand for services continues to grow. We have listened to our families, especially women who are more often impacted by child care limitations, heard our providers and are resoundingly saying you are not alone. OCFS is proud to be part of this bold action to make quality, safe and secure child care more equitable, affordable and sustainable.”

Streamlining and Centralizing the Child Care Application Process

Governor Hochul has proposed a statewide electronic solution allowing families to pre-screen for eligibility and apply for child care assistance, removing any redundant processes and unnecessary reporting requirements placed on families. By streamlining and centralizing the application for child care assistance, simplifying the process of presenting documentation, and creating an online application option for all counties, Governor Hochul aims to dramatically increase the number of applications completed successfully.

Expanding Access to the Child Care System

Governor Hochul unveiled a plan to expand eligibility for child care assistance by raising the income limit to the maximum allowed by federal law – which is 85 percent of New York’s median income, or approximately $93,200 per year for a family of four. As a result, the families of an estimated 113,000 more children will become eligible for assistance for the first time, helping to reduce out-of-pocket costs for more households.

In addition, the Governor proposed eliminating a redundancy requiring families that participate in programs, such as the Supplemental Nutrition Assistance Program, the Home Energy Assistance Program, Medicaid, and the Special Supplemental Nutrition Program for Women, Infants, and Children to prove that they are income-eligible for the Child Care Assistance Program. As a result of these changes, an estimated 83,400 children in already-eligible families will have easier access to the Child Care Assistance Program.

Governor Hochul will also standardize key eligibility across local districts by ensuring that the most vulnerable families — families experiencing homelessness and families caring for a child in foster care or kinship care — are provided child care assistance as long as funds are available. Additionally, the Governor will standardize the State’s policies on absences. Currently, districts’ policies on payments for absences vary widely, with 11 districts providing reimbursement for up to 80 days before a family becomes responsible for paying out of pocket but over 20 districts only cover 24 absences. The State will mandate that districts cover 80 absences in an effort to standardize this policy across counties.

The State will also cap family co-payments at one percent of family income above the poverty level, as approximately half of districts already do, rather than the 10 percent cap that is the current statewide rule. The State estimates that 10 percent of families would see a reduction in their co-payments as a result of this rule change, making it easier for those families to participate in the program.

In addition, Governor Hochul is directing New York State Homes and Community Renewal to incentivize housing developments to include dedicated child care space. Affordable child care is essential for both children and parents, boosting childhood development and freeing parents to work. Child care centers across the state struggle to afford high rent and compete for space in a market that is limited by strict but important safety rules. Building off an unprecedented investment of $100 million to increase the capacity of programs in child care deserts, the State will take further action to ensure child care facilities are integrated into the fabric of our communities. HCR will expressly favor applications for its Low-Income Housing Tax Credit that incorporate child care facility space.

Workforce Retention Grant Program

Governor Hochul will use unspent federal funds to establish a new Workforce Retention Grant Program to provide payments to child care providers at 17,000 programs statewide. Grants will also be used to cover payroll tax assistance and support staff recruitment strategies, including sign-on bonuses for new employees and other expenses related to hiring new staff. This is a critical and timely step toward stabilizing the child care sector as the State and Child Care Availability Task Force continue to undertake the important work of evaluating alternative workforce compensation frameworks.

New York State Employer-Supported Child Care Pilot Program

To better address affordability for families that are ineligible for CCAP and bring in new resources from employers, Governor Hochul will establish the New York State Employer-Supported Child Care pilot program to facilitate splitting the costs of care for eligible employees between the State, employers, and employees. In the ESCC pilot, employers will contribute a third of the cost of care for families between 85 percent and 100 percent of median income, and the State will match it, reducing out-of-pocket costs for these families and generating millions of dollars in new financial support for child care.

Adopt Business Income Tax Credit for Child Care Statewide

Given limitations on eligible expenses, and other restrictions in design, the preexisting federal and State employer-provided child care credit have not been widely utilized by employers. Governor Hochul has proposed a more flexible statewide, two-year business income tax credit for businesses that create or expand child care access for their employees.

The proposal would align with a similar New York City business income tax credit allowing for city-level and state-level outcomes to be evaluated at the same time.

Create a Business Navigator Program

Governor Hochul will establish a Business Navigator program in each of the 10 Regional Economic Development Council regions to help interested businesses identify options to support employees’ child care needs, and will also develop a statewide employer child care guidebook, making good on another one of the State task force’s recommendations.

Governor Hochul’s Child Care Agenda

Governor Hochul’s State of the State proposals build on her long record of making child care fairer, more accessible, and more affordable in New York State. As Lieutenant Governor, Governor Hochul co-chaired the State’s Child Care Availability Task Force, which focused on developing innovative solutions that will improve access to quality, affordable child care in New York. And as Governor, she worked with the Legislature to overhaul the child care system and make historic, one-of-a-kind investments, including a four-year, $7 billion commitment to improving the child care assistance program; expanding income eligibility for child care assistance to more than half of young children in New York; increasing state reimbursement rates to providers to expand the number of programs from which families can choose; investing $50 million to establish a child care capital program ; investing $343M to stabilize programs at risk of closure and support the child care workforce; and investing $15.6 million to expand child care to all SUNY and CUNY campuses.