Issue Spotlight: New Mexico’s Universal Child Care System

Child care is a top workforce concern everywhere. New Mexico became the first state to offer universal childcare, removing all income eligibility limits for its Child Care Assistance Program as of November 1, 2025. ACCE pulled together key resources and highlights so chamber professionals can quickly understand what New Mexico did — and what it might mean for your state.

System Highlights

• New Mexico needs 12,000–14,000 new childcare slots and 5,000 additional early childhood professionals to fully meet demand. Recruitment includes 1,000 registered home providers and licensing 120 homes.
• Providers that commit to paying at least $18/hour for entry-level staff and offering 10 hours/day, 5 days/week can qualify for enhanced incentive rates.
• Funding from the Child Care Assistance Program goes directly to providers, improving stability and cash flow.
• New Mexico is launching a $12.7 million low-interest loan fund to build, expand or renovate child care facilities.

Practical Guidance: What families need to know | What providers need to know | Proposed provider rates | Financial regulations

Cost & Funding

• Estimated cost: $600 million annually, current spending: $463 million per year
• How New Mexico Will Pay for Universal Childcare, Fiscal Policy Institute
• Oil and Gas Fuel Free Child Care in New Mexico, Straight Arrow News

How the System Developed

• 2019: Governor Michelle Lujan Grisham and the Legislature created the statewide Early Childhood Education and Care Department.
• 2020: The Early Childhood Education and Care Fund was established through House Bill 83, seeded with $300 million from oil and gas revenues and federal mineral leasing.
• 2021: New Mexico became the first state to base subsidy reimbursement on the true cost of care.
• 2022: 70% of voters approved a constitutional amendment dedicating a portion of the Land Grant Permanent Fund to early childhood. The state also expanded the Child Care Assistance Program, enabling most families to access free childcare.
• 2025: New Mexico removed all income limits and waived co-pays, making childcare assistance universal for all residents.

New Mexico’s model is reshaping the childcare conversation nationwide. Chambers should watch the rollout closely to understand how funding mechanisms, provider incentives, voter engagement or business-community partnerships could translate to their state. If universal childcare is something your business community wants to explore, New Mexico offers a roadmap worth studying.