New Mexico will be the first state to offer universal child care. What could that mean for California?

When New Mexico’s governor announced earlier this month that the state will offer free child care for families regardless of income, early childhood advocates in California took note.

Donna Sneeringer is president of the Child Care Resource Center, which provides childcare resources to families in Southern California.

“ It certainly is a sea change,” she said. “We’re excited to learn more.”

New Mexico has been offering free childcare for families who make up to 400% of the federal poverty level, and starting in November, it will remove the income eligibility requirements — making the program universal for families.

“ That's really unique. We don't have anywhere else in the country that's done that so far,” said Anne Hedgepeth, senior vice president of policy and research at Child Care Aware of America.

New Mexico Gov. Michelle Lujan Grisham said the move would save families an average of $12,000 a year.

“By investing in universal childcare, we are giving families financial relief, supporting our economy, and ensuring that every child has the opportunity to grow and thrive,” she said.

How does the New Mexico system work?

Unlike California, New Mexico has a dedicated funding stream in the form of a sovereign wealth fund from oil and gas revenue. In 2022, voters there approved a constitutional amendment to set aside money from the multi-billion dollar fund for early childcare.

New Mexico is the second-largest crude oil-producing state.

California’s funding of subsidized childcare and early education comes through a mix of federal dollars and the state’s general fund, Sneeringer said, adding, “One of the ways that New Mexico is able to do this is because they have identified a funding stream to be able to support and pay for it.”

There’s also the question of scale. New Mexico is much smaller than California, with 2.1 million residents. L.A. County alone has nearly 10 million.

“Based on the size of our population, the dollars it would take to offer a universal system are going to take significant new investment,” Sneeringer said.

But Sneeringer points to local jurisdictions in California that have taken their own initiatives in recent years to infuse dollars into their local childcare systems, like San Francisco and Alameda County, where voters approved a half-cent sales tax.

What does California currently offer?

As a state, California offers free or low-cost childcare to families through a mix of childcare programs for families making below a certain income. These include childcare vouchers and spots at centers funded through the California State Preschool Program.

The only “universal” program with no income requirements in California is offered for 4-year-olds through the form of transitional kindergarten in the public school system — a program that just was fully implemented statewide this year.

Hedgepeth with Child Care Aware said the state can learn from New Mexico in a couple of ways. There, the state is investing in creating more childcare centers and incentivizing centers to raise wages for childcare providers.

“ An important takeaway for a state like California is how much the conversation and the investment in New Mexico is about the supply side of the equation,” Hedgepeth said. “If you can't find a spot when you need it, that affordability doesn't mean very much to a family.”

California and the union that represents family childcare providers are working to increase reimbursement rates for childcare providers.

New Mexico also created a dedicated state agency to coordinate the early childhood education system beginning in 2020.

“ That governance can help you bring together different funding streams in different programs,” Hedgepeth said.

In California, the early childhood and preschool programs are managed by the California Department of Social Services and the Department of Education.

What’s possible in California?

Since California’s system is funded by the general fund, those dollars can fluctuate based on financial headwinds, and Sneeringer said the state is going to be entering “treacherous budget waters” with the passage of H.R. 1, which President Donald Trump has called the “Big, Beautiful Bill.”

“There are going to be a lot of conversations at the state level around what California values and wants to continue to try to support,” she said. “ The good news is by New Mexico taking this step forward, they are elevating the conversation.  We're eager certainly to learn from them and see what could be replicated both in California but also at the national level.”