Gov. Michelle Lujan Grisham’s pledge to make state-subsidized child care free to all may come with an asterisk under a bill designed to implement a copayment structure for New Mexico’s wealthiest families.
Senate Bill 241, sponsored by Sen. George Muñoz, D-Gallup, and other top Senate Democrats, would require a small percentage of families with incomes far above the federal poverty line to help cover the state’s expanded child care program during certain economic downturns.
By doing so, the measure will create “stability in child care services for eligible New Mexican families,” Muñoz told the Senate Education Committee Friday morning.
The bill, which cleared the committee on a 6-3 vote, is tied to at least $50 million in the state’s current proposed spending plan for child care assistance.
The bill would also codify New Mexico’s child care assistance program into state statute, with Muñoz noting the program is largely operated through administrative regulations at present. SB 241 next heads to the Senate Finance Committee, which Muñoz chairs.
Seeking stability
Under SB 241, copayments would apply to families making more than 600% of the federal poverty level, which is $163,920 for a family of three. Those copayments would scale up based on income level, requiring up to 3% of a family’s annual household income for those who make more than 600% of the poverty line and up to 7% of those who make more than 900%.
The state could also implement a waitlist if child care enrollment exceeds the state’s budget for the program in a given year, although children who are at risk, have disabilities or come from families making less than 400% of the federal poverty line would be prioritized to receive care.
Copayments would not go into effect unless certain economic conditions are met. Those conditions include the average price for West Texas intermediate crude oil dropping below $50 per barrel and demand for statewide child care programs exceeding that year’s projected enrollment by 3%.
Since New Mexico expansion of eligibility for free, state-subsidized child care to all was announced, 62.5% of new families had incomes of more than 400% of the federal poverty level, according to a fiscal analysis of the bill. Analysts estimated copayments could offset costs of the expansion by up to $12 million.
The measure comes after Lujan Grisham and her administration expanded eligibility for free child care in November to all New Mexico families.
Lawmakers, however, have expressed concerns that extending free child care to all would lead to wealthier families crowding out slots and thus preventing children from families with less means from accessing the benefit.
“We’re creating a high-quality, sustainable, universal child care system that prioritizes families who need it most,” Rep. Nathan Small, D-Las Cruces, said during a news conference Wednesday.
Worry about downturns
Lujan Grisham’s office earlier this week said the governor does not support copayments. Spokesperson Michael Coleman did not respond to a request for comment Friday on whether the governor had reached any agreement with lawmakers or shifted her thinking on the issue.
“For me, universal child care means if there’s a copay, it’s not really universally applied,” Lujan Grisham said during a news conference Thursday.
Still, she said the discussion in the Senate about making child care access “recession-proof” was a “viable, fair, productive conversation about stability and predictability.”
SB 241 was met with support among state officials as well as providers, many of whom underscored the importance of investing in child care initiatives as a way of improving the state’s economy. Barbara Tedrow of the New Mexico Early Childhood Association also emphasized the bill’s goal of making universally accessible child care more viable.
“As New Mexico continues to invest in universal child care, it’s essential that we build a sustainable structure that supports children, families, educators and providers,” she said.
Republican lawmakers expressed concerns the state’s plan would still not be sustainable, arguing it could fail to cover significant economic downturns, leaving families without access to child care.
“My concern is that at some point, New Mexico may not be as rich as we are today, and that’s going to hurt those families who become dependent” on the benefit, said Sen. Ant Thornton, R-Sandia Park.
However, Sen. Bill Soules, D-Las Cruces and chair of the committee, noted the state has deep coffers to fund early childhood initiatives, referencing New Mexico’s Early Childhood Trust Fund, which Early Childhood Education Cabinet Secretary Elizabeth Groginsky said is currently estimated to hold just short of $11 billion.
“My point is, there’s lots of money in there to fund this and make sure that it continues on universally, that we don’t have to be skittish about whether there will be enough money going forward,” he said.