The Administration for Children's Services told the New York City Council on May 1 that a change in the state budget has dramatically increased the city's financial obligation for child care assistance and forced ACS to pause issuing new low-income childcare vouchers from May 5, 2025.

Commissioner Jess Danhauser told the Council the enacted state budget raises New York City’s maintenance-of-effort requirement from $53,000,000 to $328,000,000 and ties additional state matching funds to city spending. “The state budget imposes a 518% increase to New York City's annual maintenance of effort requirement from $53,000,000 to $328,000,000,” Danhauser said. He said the state also made up to $350,000,000 available as a one‑time match, but city spending above the original $53 million is required before the match is released.

The change comes as ACS says the number of children enrolled with low‑income vouchers climbed from 10,683 in October 2022 to about 68,783 as of April 29, 2025. Danhauser said ACS "had to stop issuing new low income childcare vouchers starting 05/05/2025. Children that meet the income and programmatic requirements will be placed on a waiting list." He said the agency submitted a prioritization plan to the state and received approval the night before the hearing to continue recertifying most families under three federal priority categories: households under 300% of the federal poverty level, unhoused families, and children with special needs.

Council chairs pressed ACS on how long the city can sustain voucher continuity. ACS said the department projects combined federal/state/city spending for the childcare assistance program at roughly $1.52 billion for the upcoming federal fiscal year, and that the monthly claims have recently reached about $140 million. Danhauser warned the $350 million state match is one time and that the city would need to monitor federal and state allocations throughout the year.

Council members and ACS both urged stronger coordination with Albany and City Hall. Chair Justin Brannon and Chair Althea Stevens said tens of thousands of families could lose access to affordable child care if the funding gaps remain. "Without the resolution for the funding gaps for children, for child care vouchers, tens of thousands of families across the five boroughs who rely on those vouchers to access affordable childcare could lose their benefits," Stevens said.

ACS said it plans to continue recertifications for the “vast majority” of children who currently hold vouchers while it implements the state‑approved prioritization. The agency estimated about 2,000 children—those at the highest income levels under the previous 85% area median income threshold—might not be recertified under the federal priority rules.

The Council asked for regular reporting and more clarity about how city adoption of state match funding will be counted across fiscal years. Council members sought assurance that recertified families would have vouchers for a full 12 months; ACS confirmed that recertifications will be for a full year, and said it will continue to work with OMB and OCFS on technical implementation and claims.

The hearing also covered related spending in ACS’s FY26 executive budget, including Promise NYC funding and new allocations intended to address foster care and provider cost pressures. But council members pressed that, regardless of those items, the immediate funding uncertainty for low‑income vouchers is the most urgent issue for families who rely on child care to work or attend school.