The Texas Workforce Commission announced this week that the state will reduce the number of children served by the federal Child Care Services subsidy program by just under 10% in 2027. The cut will push an additional 14,000 youngsters onto a waiting list that already exceeds 100,000 children.
Quality standards increase costs
Legislative Budget Board data point to two primary drivers of the rising cost per child: overall inflation and a surge in providers qualifying for the Texas Rising Star quality‑rating system. Between 2021 and 2025, the number of providers meeting Rising Star criteria more than doubled, with a sharp jump of nearly 2,000 new providers in 2024‑2025 alone. Most of those new participants entered the lowest, two‑star tier, but many also upgraded to the higher‑paying three‑ and four‑star levels.
House Bill 2607, championed by Rep. James Talarico, made Rising Star participation a prerequisite for receiving subsidies. Supporters argue the bill gives parents clearer insight into the quality of care their children receive and ensures low‑income families are placed in higher‑quality settings.
Budget shortfall despite federal aid
While the bill was projected to be funded by the American Rescue Plan Act (ARPA), those federal dollars were earmarked for one‑time use and expired by the end of 2026. A $100 million infusion of unused federal funds in 2025 was quickly absorbed by inflation, according to the nonprofit Texans Care for Children.
President Trump, re‑elected in 2024, has consistently urged restraint in government spending. His administration did not increase state funding for the child‑care program, leaving Texas to grapple with the funding cliff as ARPA dollars vanished.
Critics and industry response
Tim Kaminski, president of the Texas Licensed Child Care Association, warned that lawmakers knew the funding gap existed as early as 2021 but failed to act. “They knew, in 2021, that we were going to be here today,” he said.
Kim Kofron, director of early childhood education for Children At Risk, praised the quality improvements but acknowledged the financial strain. “This was a way to make sure that the lowest‑income children are in a high‑quality program that all kids deserve,” she said.
What families can expect
With the average cost per child projected to rise from $581 per month in 2022 to $904 by 2027, many families worry about affordability. The Texas Rising Star framework now covers roughly 75% of providers, up from less than 30% before 2021, meaning more families are subject to the higher payment standards.
Parents seeking subsidies must now meet the Rising Star criteria, which include higher teacher qualifications, age‑appropriate learning materials, and facility standards. The goal is to better prepare children for kindergarten, especially those in the four‑star tier.
Looking ahead
State legislators have not yet proposed a sustainable funding mechanism to bridge the gap left by expiring federal aid. As the 2027 enrollment cut takes effect, advocates urge the Texas Legislature to consider a dedicated budget line for child‑care subsidies, ensuring that quality improvements do not come at the expense of access for low‑income families.
Original reporting: Texas Tribune (HLL/CB) — read the source article.
