Providers in New Mexico’s growing universal childcare program were vocal earlier this year in their criticism over proposed rules that would impose budgeting requirements and call on them to report key pieces of information.
After a flood of written and in-person comments expressing concerns about the proposed rules, the state Early Childhood Education and Care Department earlier this month finalized an amended version of those rules that relaxed a mandate for providers to spend 57% of their state reimbursements for childcare assistance to pay certain employees, dropping the threshold to 50%.
The new rules also expanded the types of employees in that category, and loosened reporting requirements providers said would have exposed private information of employees and businesses.
“These rules further codify New Mexico’s historic universal child care program,” the agency wrote in a statement published alongside the new rules. “They set forth the structure of a program designed to meet the needs of children and families, support the essential staff who care for our children, and promote a stable child care sector that can meet the needs of our families in ways that will strengthen New Mexico’s economy.”
Spokesperson Julia Sclafani added in an email that the department “went to great lengths to incorporate provider feedback.”
But providers have continued to express dissatisfaction with the finalized rules, and say work still needs to be done to shape New Mexico’s universal childcare program.
“It’s a lot of pressure for us to make sure we do it right, and it’s frustrating when you’re part of committees and you’re making recommendations, and it doesn’t get taken into consideration,” said Las Cruces-based childcare provider Olga Grays. “I almost feel like I wasted my time.”
Reaching a compromise
Universal childcare was launched in New Mexico in November 2025. Since then, it has gone through a number of legislative and regulatory changes, including Senate Bill 241, a funding measure passed by lawmakers earlier this year that also set up guardrails to help pay for the initiative should its cost outpace the state’s funds for it.
The early childhood department in June unveiled a set of proposed rules largely designed to implement SB 241. The rules and bill set up copayments should the state’s economy take a downturn, laid a foundation for a wage scale and career advancement system, created a framework for better data tracking and imposed on providers the spending requirement for their employees’ salaries.
The proposed requirement to spend 57% of childcare facilities’ budgets on a specific set of employees evoked strong criticism from providers.
Many expressed concerns that such a high requirement would interfere with their business models. Some also argued that the group of employees that would originally have fallen under the requirement were too narrow.
But in response to dozens of people commenting on the issue during a July hearing, and hundreds more in general sending the department written comments, the agency decided to lower the percentage.
“The 50 percent figure is a compromise between the department and the provider community. In response to providers’ input, the department also expanded the list of eligible staff and clarifies that the requirement covers both wages and mandatory and discretionary benefits,” Sclafani wrote.
Now, under the rules finalized Sept. 9, previously excluded workers like cooks, custodians and transportation staff will fall under the category of employees for whom facilities must use half their budget to pay. Providers can also request a waiver from the department for employees they feel should be included.
Barbara Tedrow, president of the New Mexico Early Childhood Association’s board of directors, still isn’t happy with the new percentage, arguing that even at 50%, she and others disagree with the premise of the state mandating how providers conduct their businesses.
“We don’t have a problem with paying teachers’ wages, and if legislators [and] policymakers are worried that the dollars [aren’t] making their way down to the teachers, well, then we need to mandate wages and not a percentage because every business is different,” she said.
But Grays, who is also a community organizer with advocacy organization OLÉ New Mexico, wishes the required portion of childcare providers’ reimbursements from the state to be used on salaries had remained 57%.
Grays expressed concerns that lowering the percentage would allow business owners to keep larger shares of childcare assistance funding as profits, rather than ensure frontline employees providing care to children get fair wages.
“I feel like our fight has always been to provide better wages, right? And so, 57% would mean that 57% of the income that we’re getting for the state — because it was supposed to be to make sure that our employees are getting paid — was used for them,” she said.
She added, “But they lowered it to 50%, so … I just feel like it’ll be more money in the business people’s pockets instead of in providers’.”
Other changes
The early childhood department also lowered reporting requirements for providers under the finalized rules. Originally, childcare facilities would have had to report several pieces of information related to their employees, including their names, positions, dates of hiring and termination and documentation of background checks. Providers and early childhood workers expressed concerns that their personal information could be made public record if reported.
Ultimately, the agency elected to exclude certain pieces of employee information from the system, such as the contact information and addresses of individual employees. It wrote in notes accompanying the rule changes that sensitive information contained in background checks, like Social Security numbers and criminal histories of employees, is not subject to public records requests. Details like results and details of background checks would be included in the information system providers must report to.
But Tedrow, also the owner of A Gold Star Academy in Farmington, said state law must go further than that.
She expressed concerns that essential business information, including details about loans, debts and other financial records, might still need to be uploaded into the information system.
Those documents being public record — including for competing businesses — could be harmful to providers, and change the dynamics of competitive grant application processes from the state, Tedrow said.
However, that information now does not have to be reported until July 1, 2027, a move Tedrow said the department made to allow childcare businesses to work with legislators to update state law to address privacy issues.
That proposed legislation would make it so that “everybody’s comfortable with knowing where these public dollars are going, but private information is being protected,” 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.
