New Mexico’s subsidized childcare program has long struggled to provide enough seats for children in need of services.
But a new strategy to provide low-interest loans so providers can build more facilities is chipping away at that shortfall, with 656 additional children estimated to receive services through new projects. The state is seeking more providers to expand the program and plans to ask for an additional $10 million from the state Legislature next year, officials told the Early Childhood Education and Care Advisory Council on Wednesday.
“This is a key part of our supply-building approach,” said Hailey Heinz, director of the Early Childhood Education and Care Department’s Policy, Research and Quality Initiatives Division.
The agency opened up a new application process for the Child Care Facility Revolving Loan Fund on Sept. 1, and will close the window at the end of October. So far this year, the agency has provided $20 million in loans. More slots are likely to open as the state continues to process loan awardees from the first round of applications.
The fund, which was launched in 2003 and was expanded last year by lawmakers to allow providers to use the loans to build new facilities or add on to old ones, provides low-interest loans as part of a state-funded effort to help providers increase capacity.
It provides loans between $100,000 and $2.5 million with interest rates fixed at 2% per year. Providers can also receive abatement of the loan of 35%, or up to $750,000, by fulfilling certain requirements for most of the two years after completing their projects.
Those include:
- Providing childcare outside of normal business hours, such as on weekends, before 7 a.m. or after 7 p.m..
- Proving that at least half the children they served received state-subsidized childcare assistance.
- Increasing their enrollment by at least 10%.
When launched, the program received a flood of applicants. Heinz said in April the first round of project proposals totaled $116 million, far outpacing the pot of money initially available to the program. The new round of applications has extended the opportunity to providers who previously missed out, Heinz said Wednesday.
“The vast majority of people who applied did not get a loan, and I know that was really disappointing for a lot of folks. And I’m excited to see some of those folks applying again in round two,” she said.
Esteban Candelaria is a corps member with Report for America, a national service program that places journalists into local newsrooms. He covers child welfare and the state Children, Youth and Families Department. Learn more about Report for America at reportforamerica.org.
