A 'life-changing' childcare program in New York could soon collapse

New York: For tens of thousands of New York City families, vouchers for free or discounted childcare from the city's Administration for Children's Services have offered a lifeline as the cost of day care for infants and toddlers has skyrocketed.

Those vouchers could start disappearing in a matter of weeks unless lawmakers in Albany act quickly to fund the program before an impending budget deadline.

The program, which has been significantly expanded to serve more families, already faces a funding gap for the current fiscal year, Jess Dannhauser, the ACS commissioner, said at a City Council hearing last week. The looming shortfall stems from the rollback of Covid-era policies and the rising costs of care.

To continue to offer the more than 60,000 vouchers it currently subsidises, the agency needs an additional $1 billion in state funding, Dannhauser said, which the governor and state legislators have not yet agreed to provide. The state's constitution requires the budget to be approved by April 1, though negotiations often stretch beyond the deadline.

The ballooning cost of childcare has put an impossible strain on working parents of young children in New York City, where the average cost of enrollment in center-based care was $26,000 last year, according to an analysis by the city comptroller, Brad Lander. That figure represented a 43 per cent increase since 2019.

Only families earning an average of at least $3,34,000 annually can afford the cost of childcare for a 2-year-old, Lander's report found. The median income for a family of three in the New York City region was $139,800 in 2024, according to city data.

Susan Stamler, the executive director of United Neighborhood Houses, an organisation that represents community centers in the city, said that the loss of vouchers -- which are granted to families that earn less than 85% of the state's median income -- could make it harder for those families to provide stability for their children.

"This is critical to all these families," she said.

When parents are unable to afford childcare, they face difficult decisions about keeping their jobs or staying home with their children, said Gregory Brender, chief policy and innovation officer of the Day Care Council of New York.

"It has consequences for the economy, for their employers," Brender said.

Erika Reyes, a mother of two in Brooklyn, said ACS vouchers had enabled her to keep her job as a discharge planner at New York-Presbyterian Hospital. Without vouchers, the burden of paying for care for her 1-year-old would be overwhelming -- like a second rent, she said.

"How am I going to manage paying that, paying rent, paying food?" Reyes, 43, said. "And then on top of that, bills and electricity, cable, their clothes. I mean, I have two kids, so it's a lot."

Roona Ray, a doctor in Queens, enrolled two of her three children in day care with help from ACS vouchers just a few weeks ago. It's been "life-changing," she said.

"It's been an incredible relief, and I think it's been great for the kids too," Ray, 45, said. "They're socialising. They're eating a more diverse diet. They're talking more and playing and making friends, so I think it's helping their development."

Ray, who specialises in family medicine and was laid off from Elmhurst Hospital Center last year, said losing the vouchers would be extremely disruptive to the routines her family was just beginning to establish.

"It would interrupt the development, the transition to school that my kids have started, my two little kids," she said. "For me, that would just set me back; it would make it harder to look for a job."

Typically, people who receive public assistance must demonstrate to the city that they are employed, looking for work or enrolled in a training program. Because of those work requirements, the city is required by law to provide them with free childcare. But at the height of the Covid pandemic, the city suspended the work requirements, and the demand for childcare among families on public assistance dropped.

Lower demand among those families enabled the city to offer childcare subsidies to more families who have low incomes but may not be receiving cash assistance, and over the last three years, the ACS voucher program expanded significantly.

In October 2022, the families of around 10,000 children were receiving the vouchers. As of last month, there were more than 62,000 children in the program, according to Dannhauser.

But now work requirements have returned, and Dannhauser expects swelling demand for vouchers from families on cash assistance to eat up the funds ACS had used to pay for the expanded voucher program.

Gov. Kathy Hochul's executive budget proposal, released in January, included no additional funding for childcare subsidies. Nor did the state Senate's version, which was released in March. The state Assembly's proposal included roughly $213 million for childcare assistance statewide -- far short of what ACS says is needed to maintain its current caseload.

Without any additional funding, Dannhauser told the City Council, the families of between 4,000 and 7,000 children could be turned away each month when they try to renew their vouchers, which most must do annually. All told, as many as 60,000 children could lose vouchers over the next year.

Compounding the funding problem, the cost of childcare has gone up. In October, the value of the vouchers increased by 20% after an analysis by the state's Office of Children and Family Services, which adjusted the rate the state pays providers to align with market trends.

Now, the city is paying providers more, but the amount of money available to fund the program hasn't changed.

Some lawmakers said they had only recently been made aware of the impending budget shortfall and questioned why city leaders hadn't raised the issue earlier.

Robert Carroll, a state assembly member in Brooklyn, said he had learned of the situation from his colleagues in the Legislature, and that he had not heard "one iota" about it from Mayor Eric Adams.

"This has not been a major issue for the mayor, which is shocking," Carroll said. "It is a dereliction of duty by the mayor's office that they have not been beating this drum incessantly."

Lincoln Restler, a City Council member in Brooklyn, applauded City Hall for expanding the voucher program in recent years. But he blamed Adams' "negligence" for the peril the program now finds itself in.

"This is a quintessential example of the mayor being out to lunch, focused on his legal troubles, not managing the city," he said.

Brender of the Day Care Council, whose group represents childcare providers, said he thinks many lawmakers don't "understand or believe the severity of what might be about to happen."

"I wish that the alarm to the state legislators and state leaders had been sounded earlier, and it had come from the mayor himself," he said.

The potential shortfall comes on the heels of Adams' decision not to include $112 million in funding for the city's 3-K program, which provides free preschool for some 3-year-olds, in his preliminary budget proposal this year.

Childcare is among the issues animating the mayoral race, and several Democratic candidates challenging Adams have sharply criticized his policies.

Allison Maser, a spokesperson for the mayor's office, said in a statement that the Adams administration had "been a leader" in pushing Albany lawmakers to fund childcare.

"We will continue to use these final days of state budget negotiations to urge the governor and Legislature to ensure that the adopted state budget includes the funding New York City needs to preserve the tremendous gains we've made," Maser said. "We remain committed to our mission of making New York City the best place to raise a family."

For parents such as Reyes, losing access to affordable childcare would be "very devastating."

Without the vouchers, families "are going to suffer a great deal," she said. "That would be a complete chaotic mess."