New Mexico’s new universal child care law is designed to take the state’s earlier, income-based assistance model and make it available to families regardless of income level, with the program billed as a way to keep parents working while lowering the pressure of high child-care costs. The measure approved in recent days also builds in oversight mechanisms and a financial “escape hatch,” reflecting concerns about how long a large spending commitment can be sustained.
Gov. Michelle Lujan Grisham, a Democrat, framed the measure as tied to workforce needs and affordability. She said Thursday, “I think you’re going to see more states look for ways to do it,” and described the program as “really a workforce engine, while paying real respect to the affordability affordability crisis that families have.” She is wrapping up her tenure next year, and the compromise lawmakers made during the legislative session ended Thursday sets boundaries around spending.
In other states, lawmakers have pursued narrower versions of the idea—such as eliminating copayments for some families in California or capping what families pay in Washington and Oregon. In Vermont, a payroll tax on employers helps fund child care subsidies. New Mexico’s plan, as described by state officials, relies heavily on the financial windfall from oil and gas production, including earnings from a recently minted $10 billion trust fund for early childhood education.
State lawmakers also added “guardrails,” including language that leaves the possibility of copayments in place if public finances deteriorate. The state’s plan funnels “as much as $700 million more” to the child care assistance program over the next five years, and state officials said copayments are unlikely and would require 90-days notice to families if pursued. Decisions about cost-sharing would also be linked to new annual reporting requirements.
State Sen. George Muñoz, a bill cosponsor, said the legislature used the new law to “put guardrails in place.” He pointed to what he described as Minnesota’s experience, saying, “We didn’t want to end up like Minnesota, where all of the sudden there was rampant fraud,” referring to allegations by U.S. prosecutors that billions in federal funds were stolen from Minnesota-run programs serving children with autism, addiction services and more.
Muñoz also said the financial shift will put money back in families’ pockets and reduce monthly strain for parents. Marianna Eanone of Las Cruces said her income combined with her husband’s Army salary left them just above the prior cutoff for child care assistance, and that the family previously paid $1,000 a month for a licensed home daycare for their 3-year-old, plus afterschool care for their kindergartener. She said, “It’s been a weight off to not have to worry about that,” adding that the change created room for other expenses such as takeout from local restaurants, martial arts classes for her 6-year-old, more payments toward student loan debt and savings.
The law is also structured to address provider and access limits as the program expands. It allows New Mexico to create a waitlist when demand for assistance outpaces available slots, and it is designed to prioritize children in “vulnerable circumstances,” including those experiencing extreme poverty, children with disabilities, and those at risk of developmental delays. The state’s legislative analysts also reviewed concerns that expanding subsidies across income brackets could reduce participation for low-income families, with their review finding attendance from low-income families declined as assistance expanded to higher income brackets.
New Mexico officials said the program change also ties into efforts aimed at child-care quality. Elizabeth Groginsky, secretary of New Mexico’s early childhood education department, said lawmakers left “financial breathing room” for incentives adopted to improve child care quality, raise base wages and expand operating hours through enhanced rates paid by the state.
Even as assistance expands beyond working parents to include grandparent guardians, foster parents and people experiencing homelessness, the availability of child care slots remains a problem in many parts of New Mexico. Legislators also sent a separate bill to the governor aimed at scaling up home-based daycare and child care centers in residential areas by overriding some local zoning and permitting requirements, including homeowner association restrictions on child care.