New Mexico is the first state to promise free child care for all families

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SANTA FE, N.M. (AP) — New Mexico's governor is promising universal free child care to families of all income levels.

Gov. Michelle Lujan Grisham announced her plans this week, saying she wants to leverage a financial windfall from oil and gas production to help more parents by removing the state's income eligibility limit starting Nov. 1.

Rules for the program are being hashed out and lawmakers still have to approve funding, but New Mexico already is several steps ahead of other states when it comes to subsidizing child care.

The latest initiative expands on previous early childhood education investments by extending access to another 12,000 children and making low-interest loans available to spur construction of new child care centers as demands surge.

Lujan Grisham says it's life-changing for parents to have free child care, since it means more money can be spent on utilities and groceries.

Americans overwhelmingly view the cost of child care as a significant issue, but there are deep divisions over what the government's role should be in addressing it, mainly whether it should foot the costs.

Many states are limited in what they can take on as President Donald Trump’s administration cuts or freezes billions of dollars in education funding.

Lujan Grisham hopes the initiative stirs conversations beyond New Mexico.

“My hope is, as we watch elections take hold around the country, that our congressional candidates are talking about these investments, our gubernatorial candidates are talking about these investments” in child care, the second-term Democrat said.

The concept of free child care is being embraced by lawmakers including Zohran Mamdani, the Democratic nominee for mayor of New York City, through proposed tax hikes. Oregon's most populous county ramped up its universal preschool program this year despite funding issues, and enthusiasm for early childhood education spawned the creation last year of a dedicated state agency in Illinois.

New Mexico in 2020 began diverting surplus government income linked to surging oil and gas production to a trust for early childhood education. The balance is nearing $10 billion, with about $500 million in investment earnings being funneled each year to early childhood education programs.

The child care expansion will draw on those savings, some federal funding and a request that state legislators provide an additional $120 million annually. That’s a 26% increase over current spending of $463 million, Lujan Grisham spokesperson Michael Coleman said.

The Democratic-led Legislature has balked at entitlement programs before, repeatedly rejecting paid family leave requirements for the private sector. Republican lawmakers are concerned that the governor's latest plan would result in a handout for wealthy families.

New Mexico in 2022 expanded eligibility and waived copayments for child care assistance to families earning as much as four times the federal poverty rate — about $128,000 for a family of four this year.

Paul Gessing, president of the libertarian Rio Grande Foundation in New Mexico, said it's baffling that a Democratic governor would come to the financial aid of upper-income parents.

“We’re already doing this up to 400% of the poverty level — that’s a pretty decent amount of money to be making,” he said.

By eliminating the income cutoff, state officials aim to improve family financial stability, encourage participation in the economy and better prepare toddlers for school.

To meet increased demand, the Lujan Grisham administration says it will need more than 50 new licensed child care centers, 120 licensed homes that accommodate a dozen children and as many as 1,000 new registered homes that serve four children.

Child care slots already are in short supply across New Mexico. And attendance from low-income families declined as assistance expanded to higher income brackets, according to a review by the Legislature’s budget and accountability office.

There’s also little evidence that New Mexico children are better prepared for school than children in other states. The 2025 survey by the Annie E. Casey Foundation ranked New Mexico’s public education system last among 50 states.

The governor’s plan includes incentives to improve quality — raising hourly base pay for child care workers to at least $18 where excellence is demonstrated.

The universal child care guarantee will cover crucial infant and toddler years before and after children become eligible for public preschool — defraying average annual costs of about $12,000 per year.

Eligibility for child care assistance also will extend to grandparents who are in charge of grandchildren, often because of parents struggling with addiction, with no work requirement.

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Associated Press writer Claire Rush contributed from Portland, Ore.

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