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2 | Indiana Family and Social Services Administration • Preschoolers (3–5 years): 15 percent decrease • School-Age Children (K–12): 35 percent decrease Rationale and Background • April 2021: Indiana increased CCDF rates by 20 percent per child using one-time COVID relief funds without a sustainability plan. • 2023: The prior administration issued “transitional reimbursement rates” that didn’t address the impending financial cliff. • Result: An overexpansion of child care capacity reliant on temporary funding, leading to a projected $225 million deficit by 2026. • 2025 Legislative Session: The Governor and General Assembly made historic investments in childcare ($147.25 million) to avert more severe provider rate cuts and protect thousands of waiver recipients. • Today’s Action: Rate adjustments align reimbursements with actual provider costs and federal regulations, correcting the trajectory set two years ago. “We remain committed to strengthening Indiana’s early childhood system. While we regret the necessity of these adjustments, they are essential to ensuring uninterrupted access to affordable care for Hoosier families,” added Director Alson.

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