Millions of parents throughout the United States say that child care is hard to find and not affordable. At the same time, the child care workforce is among the lowest paid of all occupations. Improving affordability while retaining a competitive workforce will require public investment to ensure child care provider stability without increasing costs to parents. In the past few years, several states have enacted children’s trust funds with specific revenue dedicated for investments in child care and state PreKindergarten programs. Some have been fueled by state legislation, some by state ballot initiatives. It is clear that to transform the landscape of early care and education, financing is needed.
Too often, stakeholders set far-reaching goals such as increased wages for the workforce or improving affordability for parents without identifying the revenue streams needed to achieve them. This brief explores state solutions paired with the investments that move ideas and goals to implementation.
In the 1990s and early 2000s, states began to dedicate specific funds for early childhood program investments. Tobacco and lottery funds were first tapped in the 1990s for specific early childhood programs. Nebraska created an endowment in 2006 with funds from private investors and the state. These and other initiatives, paved the way for today’s robust trust funds and endowments.
Three states—Connecticut, New Mexico, Montana—and the District of Columbia have created Early Childhood Trust Funds to support early childhood programs. Each is an example of how states can address the complex challenges facing child care and other early education programs. Connecticut and Montana created Early Childhood Funds in 2025. New Mexico built on past successes to more than double the state’s investment in early care and education. The District of Columbia’s Pay Equity Fund is a promising concept that supports pay comparability with public schools.
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