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Page 2 | December 9, 2025 Health and Human Services: Childcare Assistance Children, Youth and Families Department, is now under the purview of ECECD. In 2019, there were approximately 20 thousand children enrolled in childcare to approximately 98 thousand eligible children in the state, a ratio of 0.29 slots for every eligible child. Today, there are a little less than 32 thousand children enrolled in childcare compared to about 326 thousand eligible children, a ratio of 0.14 slots for every eligible child due to eligibility expansion. Research focused on Childcare Assistance in New Mexico found that participation corresponds with increased wages, more well-child visits, and better child oral health. There is also a correlation between increased participation and labor force participation rates. However, research to date has not demonstrated a causal or correlative link between New Mexico Childcare Assistance, quality levels, and improved educational outcomes (see Appendix A).

LFC staff estimates with the new proposed provider rates, if expansion did not occur, the estimated cost is $406.2 million per year (see Appendix B). Assuming 90 percent utilization of all available slots in the state and modeling the division of slots based on who is currently enrolled in Childcare Assistance, the estimated cost to the state will be around $849.7 million annually (see Appendix B). ECECD has not provided a full cost estimate of universal Childcare Assistance up to this point. Moreover, if families were not on Childcare Assistance but already paying for childcare, they are likely to enroll in the program—meaning that the program is likely to supplant many private pay families with the state as the payer. Previous research demonstrates that the childcare population shifts throughout the year, and as low-income families leave care, the excess demand could cause further shifts to higher-income families over time. Additionally, many families already pay privately for care and if they shift to Childcare Assistance, it would cost taxpayers almost double the current cost.

According to ECECD, approximately 5,000 families applied for Childcare Assistance in the first two weeks universal Childcare Assistance was offered, of which 55 percent of families were above the previous 400 percent FPL criteria or $127,500 a year for a family of four. In September 2025, the state served 33,439 children through the Childcare Assistance program. The chart below delineates every childcare assistance expansion since 2019.

New Mexico Childcare Assistance Eligibility Changes Effective Date Entry Eligibility FPL (%) Continuation/Exit Eligibility FPL (%) Number of Children Enrolled

Maximum Amount a Family of Four Could Make Copay Policy Notes Jan 1, 2019 150% 200% 18,801 $51,500 Copays required CYFD tightened below historic levels May 7, 2019 200% 250% 19,558 $64,375 Copays required Court order required expansion Oct 1, 2019 200% 250% 19,106 $64,375 Copays required Rule formalized levels Sept 1, 2020 200% 250% 13,147 $65,500 Copays waived ≤200% FPL Pandemic relief waiver Jul 1, 2021 350% 400% 9,084 $105,996 Copays required First major middle-income expansion May 1, 2022 400% 425% 11,701 $117,938 All copays waived Emergency rule: free for most families July 1, 2023 400% 425% 29,366 $127,500 Copays required >200% FPL Copay waiver expired; eligibility remained Nov 1, 2025 No income limit No income limit No income limit No copays Universal childcare assistance Source: LFC files

Number of Eligible Children versus Number of Slots Available

Pre- Universal Universal Total Child Population 98,095 326,114 Slots Available 19,977 31,930 Ratio 0.2 0.1

Source: LFC files