NYC, state battle over child care funding for thousands of New Yorkers

New York City Mayor Eric Adams’ administration is balking at a state-level plan to rescue a popular child care program from a looming fiscal cliff, painting it as an attempt by state leaders to shift costs to the city.

Gov. Kathy Hochul and state legislative leaders struck a tentative $254 billion budget deal earlier this week that includes $400 million for the Child Care Assistance Program. The program provides subsidized child care and after-school to more than 80,000 New York City families and more across the state — but after enrollment far exceeded its original budget, the city may have to stop offering vouchers to as many as 7,000 families every month.

State leaders have said that $350 million of the program’s funding will be allocated for New York City. But advocates for the subsidies say the funding boost still isn’t enough to keep all eligible families in the program. And the money comes with a major catch: In order for the city to receive the full amount, it will have to put in $350 million of its own, according to the governor’s office.

Adams delivered his city budget proposal on Thursday. Afterward, the mayor criticized the funding deal, arguing that the state should pick up the full tab.

“They’re taking $300 million away,” Adams said, likening the state’s effort to pressure the city into increasing its contributions to a cut. “Where’s the outrage? Where’s the noise?”

The state has doubled its spending on child care vouchers in the last three years. But the city’s share has remained largely stagnant, even as thousands more New Yorkers are expected to flock to the program this year. The picture is further complicated by the return of work rules for the lowest-income New Yorkers relying on public benefits.

Enrollment in the voucher program exploded in 2023, when the state expanded eligibility to families earning 85% the state median income, making a family of four earning $108,000 eligible for the voucher. New York City officials said there were 7,400 families receiving vouchers in 2022; now more than 80,000 rely on them.

Hochul allocated $1.8 billion to child care vouchers in her previous budget, with $1.1 billion going toward the city. Under her new spending plan, Hochul will increase funding to $2.2 billion — money she freed up by scaling back “inflation refund” checks the state intends on sending middle-class residents later this year.

“The bottom line is they needed help,” Hochul said Tuesday. “The families in New York City needed help and we stepped up.”

Avery Cohen, a Hochul spokesperson, said the governor has made child care “more accessible and affordable for families.”

“Even with massive state subsidies, keeping hundreds of thousands of kids enrolled in child care must be a shared responsibility,” Cohen said.

While state contributions toward the child care vouchers have grown, city contributions have largely remained flat. Last year, the city contributed $62 million toward vouchers. But the program has not only grown exponentially; it’s also become more costly to run.

Last year Hochul boosted reimbursement rates for child care providers who generally operate on thin margins and whose workers often earn very low wages. City officials say this increase will make the program 20% more expensive.

Adding to the increased demand, the city reinstated work requirements last month for residents receiving cash assistance, meaning thousands of recipients will need child care as they return to work full time to keep their benefits. The Administration for Children’s Services estimates as many as 40,000 of the lowest-income families could need child care subsidies. The city needs to prioritize cash assistance families first, which means families who earn more could end up getting their vouchers yanked.

Allison Maser, a City Hall spokesperson, said the city has been sounding the alarm about the potential for families to lose their subsidies for months.

“While we are grateful that the state is committing to some funding, quite frankly, it doesn’t go far enough and is inconsistent with the governor’s own directive to enroll as many children as possible in the Child Care Assistance Program,” Maser said. “We will continue to fight for those families and remain hopeful that the state will continue to fulfill its own obligations instead of trying to pass the buck to cities like ours.”

Parents who rely on the program, meanwhile, are left to wonder whether the funding spat could put their subsidies at risk.

“We end up being the monkey in the middle,” said Mansie Meikle, who receives a voucher for after-school care for her three children. “It’s almost like our children are not a priority.”

Pete Nabozny, policy director for the advocacy group The Children’s Agenda, called Hochul's investment significant but said the city also has an obligation to contribute so families aren't kicked off their vouchers.

“That would be a real travesty for families and a real mistake by all elected leaders to allow such a thing to happen,” he said.

Nabozny said the $50 million allocated to counties outside the city will help but won't be enough to keep counties from closing down enrollment in the future. He said 15 counties have already stopped accepting eligible families and ended vouchers from families who are trying to renew after a year.

The New York Public Welfare Association, which represents county social service districts outside of New York City, said the reported state funding boost isn’t enough to cover the child care program's funding gaps in New York City or in the rest of the state.

“We are also concerned about the matching requirement that has been proposed to New York City, and the precedent this could set for other districts,” said Matt Barron, the association’s policy and communications director.

Lawmakers are expected to vote on the tentative budget agreement next week, though Hochul and legislative leaders have struggled to close out final negotiations over loose ends and lingering issues like measures to reduce the prison population.

Assemblymember Emily Gallagher, a Brooklyn Democrat, said the child care funding boost is a “really good compromise” to save vouchers for families who need them. But she’s hoping the state can do more in the future — such as providing a boost for the child care workforce.

“ I think the state is stepping in the best that we can to assist in maintaining this critical program,” she said. “And while of course I would like to see it be even more than that, I think this is a city and state issue, so I think we're helping the city out.”

State lawmakers passed a short-term budget extender Thursday that will keep the state funded into next week.

Correction: This story previously misstated the number of counties that had stopped accepting eligible families to their voucher programs.