Governor's FY27 budget proposes $1.86 billion for EEC; board approves $20 million in retroactive rate increases

The Board of Early Education and Care reviewed highlights of the governor's fiscal year 2027 budget proposal and approved department recommendations to implement $20 million in childcare financial assistance rate increases that will be retroactive to July 1, 2025.

Budget presentation: Crystal Landon, EEC budget director, said the governor proposes $1,861,000,000 for EEC in FY27, an increase of about $136,000,000 (roughly 8%) above FY26. The largest line in the proposal is Child Care Financial Assistance (CCFA), set at $1,220,000,000 — an increase of $133,000,000 from the approved FY26 budget. Landon said that amount is expected to serve on average about 73,000 children per month in FY27 and accounts for rate increases and potential caseload growth.

Program details: The governor's proposal also holds Commonwealth Cares for Children (C3) level-funded at $475,000,000, proposes $36,950,000 for the Commonwealth Preschool Partnership Initiative (including $5,000,000 for a summer step-up program and $11,500,000 for expansion), and restores the quality improvement line to about $48,000,000 (a $2.7 million increase). Other listed items included $20,000,000 for childcare resource and referral services; $20,000,000 in state supplemental grants for Head Start; CFCE at $11,700,000; parent-child-plus at $4,250,000; early childhood mental health grants at $4,950,000 (noted as a 1% reduction); and career pathways funding at $2,970,000 (1% reduction).

Board action on rates: Staff presented a recommendation to implement FY26 CCFA rate increases, with an across-the-board 0.5% adjustment and targeted additional increases for preschool and some family childcare rates. The board chair moved the motion that "The Board of Early Education and Care hereby approves the department's recommendations for implementing fiscal year 26 child care financial assistance rate increases." The motion was seconded and approved by voice vote; Board members expressed appreciation for the analytic work that informed the decision and cautioned about ongoing access and waitlist concerns.

Next steps: The governor's House 2 proposal will be considered by the Legislature; the board's vote implements departmental rate changes administratively and does not finalize legislative appropriations. EEC staff said they will continue to monitor caseload and access and report back to the board as the budget process moves through the House and Senate.