Governor allocates $500M for Maryland childcare scholarships in FY 26 budget

In a pivotal meeting held on February 24, 2025, the Maryland Legislature's EBA Committee discussed the governor's ambitious budget proposal for fiscal year 2026, which earmarks a historic $500 million for the childcare scholarship program. This funding marks an extraordinary 400% increase from fiscal year 2023, reflecting the administration's commitment to making high-quality childcare more accessible for families across the state.

The meeting revealed that since January 2023, participation in the childcare scholarship program has surged by 66%, benefiting nearly 16,000 additional children. However, despite these significant investments, the Maryland State Department of Education (MSDE) announced plans to implement an enrollment freeze starting May 1, 2025, due to fiscal analysis indicating a need to manage capacity. This freeze will last until September 2025, allowing only new admissions as current participants exit the program, maintaining a steady enrollment cap of 40,000 children.

In addition to the enrollment freeze, MSDE proposed adjusting reimbursement rates for childcare providers to align with the sixtieth percentile of the 2024 market rate survey. This change aims to stabilize funding for providers while ensuring that families' co-payments remain unaffected. Families will still be responsible for any costs not covered by the scholarships, which could pose challenges for some.

The committee also addressed the readiness of public schools to implement a new sliding scale model for family share payments, which will begin in the 2025-2026 school year. This model will require higher-income families to contribute a share of the costs for pre-kindergarten services. While public schools may need to establish mechanisms to collect these fees, private providers are already accustomed to tuition collection and can adapt quickly.

MSDE emphasized its commitment to enhancing communication and collaboration among early childhood education stakeholders through a newly established work group. This initiative aims to ensure that Maryland continues to lead in childcare quality and accessibility.

As the meeting concluded, the committee members expressed appreciation for the hard work and dedication shown by MSDE staff, highlighting the importance of ongoing support for Maryland's youngest learners. The discussions set the stage for future developments in the state's childcare landscape, leaving many eager to see how these changes will unfold in the coming months.