Virginia officials report historic demand for early childhood care; governor’s budget proposes co‑pay changes, $15M for retrofits and pause on school‑age enroll

Jenna Conway, deputy superintendent for early childhood care and education, updated the Senate Finance and Appropriations Committee’s Education Subcommittee on Dec. 14 in Richmond, saying the Commonwealth is using all available state and federal dollars to serve historically high demand across three state‑funded programs: the childcare subsidy, mixed‑delivery slots and the Virginia Preschool Initiative (VPI). “We are using every state and federal dollar available to serve more kids than ever before across three state funded programs,” Conway said.

Why it matters: Lawmakers face competing priorities as demand for infant and toddler care climbs and state dollars are finite. The governor’s budget proposals and the commission’s recommendations attempt to steer limited resources toward the birth‑to‑5 population, where options are most constrained.

Demand and wait lists: Conway presented wait‑list figures the department has compiled since July 1, noting sharp demand for infants and toddlers and slower recent growth in the number of new families added. The department reported approximately 5,000 infants and toddlers on the childcare‑subsidy wait list, roughly 3,700 for preschool programs, about 800 for mixed‑delivery infant/toddler slots, another 460 for mixed‑delivery preschool slots, and just under 4,000 for school‑age care. Conway said only about 0.3% of families recently came off wait lists with a slot, while roughly 10% of families opted off because they stopped waiting. The department also highlighted that Amazon and other essential employers appear frequently among employer groups whose employees use subsidy supports.

Quality and supply: Conway said Virginia launched a VQB5 online portal this year, giving public information on about 3,121 early‑learning sites statewide, and reported that 98% of programs meet state expectations. She told the committee the department has completed extensive classroom observations used to calculate regional differences in cost and quality: “Virginia completed 28,000 class observations last year,” Conway said.

Commission findings and governor’s proposals: The Early Childhood Care and Education Commission recommended broad levers to maximize state dollars, including consideration of higher co‑payments up to the federal cap of 7% of household income, prioritizing infant and toddler slots, and potential time limits on eligibility tied to job search activity. Conway described the governor’s budget as implementing three pillars: changes to co‑payments and eligibility to bring additional children off wait lists, a one‑time $15 million proposal to retrofit or renovate space to increase supply, and creation of a work group to analyze after‑school and school‑age funding. As presented by Conway, the budget changes — combined with already planned FY‑26 slot increases — were described as able to bring several thousand birth‑to‑5 children off wait lists in FY‑26; the department framed that total as approximately 7,000 slots but provided multiple component estimates during the briefing that staff said are available in the department’s calculator.

School‑age pause and work group: Conway said the governor’s budget would pause enrollment of new school‑age (6–13) children into the childcare subsidy program while stakeholders study the many federal, state and local funding streams that support after‑school and summer programming. The department described the pause as temporary and as intended to inform policy adjustments rather than an immediate rate reduction or program elimination.

Attendance and data systems: The department cited falling attendance since the pre‑pandemic period and said the agency is procuring a modern attendance tracking system to replace a swipe‑card system; Conway said the goal is to have the new system in place by the end of calendar year 2025 to get better data on barriers to attendance and to inform policy choices.

Federal rules and cost‑of‑quality: Conway reviewed federal requirements for the child‑care block grant, explaining that Virginia uses a federally‑accepted “cost of quality” methodology to set subsidy rates. She reiterated that federal rules cap family co‑payments at 7% of household income and require states to move from pay‑for‑attendance to pay‑by‑enrollment and to pay providers prospectively; the department said it is on a path to comply with those rules by August 2026. Conway said the department’s last cost‑of‑quality recalculation shows higher educator compensation pressures but that the federal Administration for Children and Families does not mandate a specific percentage of cost‑of‑quality to fund.

Workforce and capacity: Responding to questions from senators about workforce capacity, Conway said the number of providers taking childcare subsidy has increased and that licensed capacity and subsidy‑participating slots have grown in recent years. She noted turnover among educators remains a challenge but said Virginia’s policy and payment structure have supported capacity growth in the subsidy market.

Ending: Conway closed by asking for questions and reiterating the department’s view that the proposals aim to prioritize infants and toddlers, address supply constraints and provide a better data foundation for future decisions.