New Mexico childcare providers struggle as demand, waitlists increase

Last year, New Mexico became the first state to offer universal childcare, but one year after Gov. Michelle Lujan Grisham unveiled the program, childcare center business leaders say they’re struggling to meet increasing demands and are concerned about long-term sustainability.

The program currently has 47,000 enrollees, with Early Childcare Education and Care officials estimating the number will increase to 58,000 children in the coming year.

Daisy Lira, founder of early childcare center The Hive Education, in Sunland Park, told state lawmakers on Wednesday they aren’t thinking enough about how to support providers to meet that increasing demand.

“A provider can’t simply add another classroom because demand increases,” she said during a Las Cruces hearing at the Legislature’s Economic and Rural Development and Policy Committee. “They have to hire qualified staff. They need equipment and supplies. They need insurance.”

The childcare business leaders on Wednesday proposed lawmakers consider amending the rules governing the program to ease reporting requirements for providers and have reimbursement rates — essentially payments providers receive from the state — keep pace with current costs and inflation. They also said the state needs to streamline its funding mechanisms across different agencies and sources.

That same day, the ECECD addressed one of the concerns that childcare providers had — a proposed mandate that childcare businesses, if taking the reimbursement, would put 57% of their revenue toward wages for teachers and administration. 

In an updated policy, the ECECD lowered the mandate to 50% and expanded the eligible employees to assistants, cooks and other workers to ease the strain on childcare businesses.

Childcare leaders also cited rising business insurance costs as a challenge. 

“We have public funding available, families waiting for care and providers willing to create more slots. But if that provider cannot obtain the coverage needed to operate, those seats or slots never get created,” Ray Jaramillo, director of Alpha School for Young Children in Las Cruces, told lawmakers.

Jaramillo proposed lawmakers help childcare businesses create a “captive insurance company,” one controlled by its members, to help address rising costs, but faced immediate pushback. 

“If you, as a private industry, want to create an insurance pool, more power to you,” state Rep. Tara Lujan (D-Santa Fe) said, “but for us to come on board and say we need to help you solve that problem—I don’t see that as the function of the state.”

State Rep. Marian Matthews (D-Albuquerque) noted that the childcare providers must have a voice during universal childcare discussions to deliver long term results. “We’re going to have people leave the business because of these problems, which to me seem to be process problems and could absolutely be solved with some guidelines,” she said.

Some state Republican lawmakers, like Sen. Crystal Brantley (R-Elephant Butte), said that the universal childcare program is an “attempt to create some sort of lasting legacy for leadership” and that the program was rolled out “without addressing all concerns.”

But the childcare providers were clear they want universal childcare to succeed. “But for it to succeed long term, we have to protect: quality for children, access for families, and sustainability for the providers who keep the doors open. That’s how we build something that lasts here in New Mexico,” Jaramillo said.