Texas Raised the Bar for Subsidized Child Care but Never Paid for It. Now 14,000 More Kids Will Wait
A 2021 law tied child care subsidies to the Texas Rising Star quality program. Costs per child jumped, federal relief money ran out and the state is cutting the number of children it serves in 2027.
For working parents who cannot afford full-price child care, the line just got longer.
The Texas Workforce Commission announced in August that the cost per child in the federal Child Care Services program had risen beyond what the program could afford, The Texas Tribune reported. The program pays all or part of child care tuition for low-income families. The commission cut the number of children it will serve statewide in 2027 by a little less than 10 percent.
That is expected to add 14,000 names to a waitlist that already holds more than 100,000 young children.
Why the cost went up
The Legislative Budget Board pointed to two main reasons: inflation, and more child care programs qualifying for higher payments.
The average cost per child per month grew from $581 in 2022 to a projected $904 in 2027, according to the budget board.
The higher payments trace to a 2021 law, House Bill 2607. It required child care programs that accept subsidized children to qualify for Texas Rising Star, the state’s quality rating program, which guarantees higher payments per child. Fewer than 30 percent of Texas providers were in Rising Star before 2021. Now nearly 75 percent are, the Tribune reported. The number of qualifying providers more than doubled between 2021 and 2025, with nearly 2,000 new providers added between 2024 and 2025 alone.
A good goal without a funding plan
Supporters say the law did what it was meant to do. Before it, subsidies flowed to programs that only met minimum licensing standards. Rising Star programs must meet expectations for early learning, teacher qualifications and facilities.
"This was a way to make sure that the lowest income children — who are the ones that get subsidies — are in a high-quality program that all kids deserve," said Kim Kofron, director of early childhood education for Children At Risk.
But the mandate passed without new state money. Legislative analyses said it would cost Texas nothing and pointed to federal American Rescue Plan Act dollars to cover any increase. Those dollars had to be spent by the end of 2026. Critics warned at the time that the mandate would mean serving fewer children.
"They knew, in 2021, that we were going to be here today," said Tim Kaminski, president of the Texas Licensed Child Care Association. "They just didn’t do anything about it."
Lawmakers in 2025 moved $100 million in unused federal dollars meant for needy families into the subsidy program for 2026 and 2027. Texans Care for Children says inflation ate all of it.
The election angle
HB 2607 was carried in the House by state Rep. James Talarico, now the Democratic nominee for U.S. Senate against Attorney General Ken Paxton. The two are on dueling bus tours as early voting continues. Talarico has cited his child care work on the campaign trail and has promised ways to improve access and affordability, including nationwide universal child care, the Tribune reported. He did not respond to the Tribune’s requests for comment.
In fairness, the bill drew little debate. It passed the House by majority vote and the Senate with five no votes. Responsibility for the funding gap belongs to the Legislature as a whole, which has generally put in only the minimum state money needed to draw federal dollars.
What it means for providers
For small child care businesses, Rising Star is both a lifeline and a cost. Katrina Smith runs Just Kidz Preschool and Another Just Kidz Preschool in East Texas, both rated Rising Star 4. The subsidy payments help keep tuition lower for private-pay families, she said.
But staying at that level is expensive, from replacing torn learning materials to keeping teachers. "Teachers are leaving and going to Chick Fil A, making $15 an hour instead of working for me at $12 an hour," Smith said.
"Without a funding mechanism, we’re going to have this vicious cycle of having good intentions but not paying for what needs to be there," Kaminski said.
The lesson
Conservatives have long warned that programs built on temporary federal money create permanent bills. This is one. Raising quality for poor children was a worthy aim, but a promise without a plan to pay for it ends with fewer children served.
The better path is honest budgeting: decide what the state will fund, fund it, and let families, churches and local providers fill the rest. Parents who stay home, grandparents who help and churches that run affordable programs deserve credit in that conversation too. The next Legislature should settle the question before the waitlist grows again.
