Witness calls to preserve Act 76 funding as Vermont builds infant capacity and workforce

Allie Richards, chief executive officer of the nonprofit Let’s Grow Kids, told the House Hamilton Economic Development Committee that Vermont’s post-Act 76 child-care program is expanding quickly but remains unfinished and should not face a permanent base funding cut.

Richards said Act 76 provided a $50,000,000 general appropriation and established a 0.44% payroll tax to help rebuild child-care infrastructure. “We’re really undertaking a transformation of entire sector,” she said, adding that the program “has not even come close to maturing.”

Richards said the law’s investments are already producing new capacity—“a thousand new spaces, a hundred new programs, 50 new family childcare homes”—but that infant care remains a statewide gap. “Where we’re really seeing the gaps is infant capacity. That’s where we have many thousands of childcare spaces to build to meet the current demand,” she said.

Richards recommended lawmakers avoid a permanent reduction in the program’s base funding and asked the committee to back colleagues in Human Services who are weighing technical adjustments, such as inflationary rate increases for program reimbursements. “I encourage you to support no permanent base reduction to childcare, to reject the governor’s proposal for a permanent reduction in the base for that funding in the general fund,” she said.

She described two other priority areas for the committee: targeted business supports for programs and workforce development. Richards recommended First Children’s Finance Vermont as a technical resource for maps and local data and called the organization “the small business development center for child care,” saying it helps programs with budgets, ratios and economies of scale. She also highlighted apprenticeship and education pathways run through the Vermont Association for the Education of Young Children and a state‑funded coaching program called Sparks, noting waiting lists for apprenticeship slots.

On long‑term fiscal choices, Richards said maintaining base funding helps keep the payroll tax at 0.44%. She said the current path should produce stabilization in a few years and that, once the system stabilizes, lawmakers will have to decide whether surpluses go to reserves or back to the general fund. “This is a multi year transformation … We’re in year 3 of that,” she said.

Committee members asked clarifying questions about timing and data; Richards recommended convening First Children’s Finance Vermont and other technical partners to get county‑level maps of supply and demand. The hearing record shows no formal motions or votes on the recommendations during this session.

The committee returned to its regular schedule after the discussion.