Virginia could need $4.5 billion a year to make child care affordable, state says

RICHMOND, Va. (WWBT) - The Virginia Department of Education says making child care affordable in the state could cost as much as $4.5 billion a year once a plan is fully phased in over the next decade.

Many Virginia families still need child care and the demand for affordable, quality child care is not going down.

State leaders who have been working to change that say funding it will not be easy and describe the plans now in place as a step in the right direction.

State child care leaders are not surprised by the estimated cost.

“We know that access to quality, affordable child care is important to every family with young children in Virginia. It’s important to our workforce. It’s important to Virginia’s economy. And we really appreciate the Department of Education being transparent and running the calculations that really lift up what need exists and what it costs,” said Karin Bowles of the Virginia Early Childhood Foundation.

The Virginia Early Childhood Foundation says the change will not happen overnight. The Department of Education laid out three options to phase in over 10 years.

VDOE presented the options Oct. 14 to the Commission on Early Childhood Care and Education.

According to the department’s presentation, the options are meant to show a range of possible approaches and are not specific proposals.

Actual costs and effects would depend on policy decisions, including program reach, the sliding fee scale and provider payment rates. The estimates do not account for expected cost increases from inflation or benchmarking over the 10 years.

The largest plan, “Affordability for All,” would cost about $4.5 billion a year in 2036. That is $3.8 billion more than fiscal year 2027 investments.

The “Affordability for All” plan would serve 240,000 more children from birth to age 5. The department estimates 23% of birth-to-five children in working families would still not be served.

Under the “Affordability for All” plan, the average annual cost per family would be $6,200. A sliding scale would cap what families pay at 0% to 10% of family income.

The “Affordability for All” plan has no income limit.

It covers all working families and other families in need. Benefits would phase out for most families at about $431,000 a year for a family of four.

The “Affordability for All” plan would raise wages for 43,000 teachers by 48%, or an average of $8.16 an hour ($17,000 a year).

The “Improving Affordability” plan would cost $3.7 billion a year in 2036. That is $3.0 billion more than fiscal year 2027 investments.

That plan would serve 190,000 more children from birth to age 5. The department estimates 35% of birth-to-five children in working families would still not be served.

Under the “Improving Affordability” plan, the average annual cost per family would be $6,200. A sliding scale would cap what families pay at 2.5% to 20% of family income.

The “Improving Affordability” plan has no income limit. It covers all working families and other families in need. Benefits would phase out for most families at about $287,000 a year for a family of four.

The “Improving Affordability” plan would raise wages for 43,000 teachers by 41%, or an average of $6.89 an hour ($14,000 a year).

The least expensive plan, “Sustaining Historic Growth,” would cost $1.6 billion a year to sustain historic growth through 2036. That is $915 million more than fiscal year 2027 investments.

“Sustaining Historic Growth” would serve 39,000 more children from birth to age 5. The department estimates 74% of birth-to-five children in working families would still not be served.

Under that plan, the average annual cost per family would be $1,800. Eligible families would pay no more than 5% of their income. The plan keeps current eligibility limits.

Families above about $122,000 a year for a family of four would have no cap on child care costs.

The “Sustaining Historic Growth” plan would raise wages for 33,000 teachers by 27%, or an average of $4.55 an hour ($9,500 a year).

Bowles said the three options are the start of a conversation.

“Slow and steady progress is really important, but it’s also important to always have a North Star and to, set a bold vision for where we want Virginia to go. So, having those three options, it really is the start of a conversation, building the understanding of what it takes to have a robust childcare system that supports economic growth for the Commonwealth,” Bowles said.

Advocates say that if Virginia wants any of the three options, the work has to start now.