Spending on child care would grow Indiana's economy

Yahoo

23-04-2025

A U.S. Chamber of Commerce Foundation report showed that insufficient child care capacity costs Indiana over $4.2 billion annually in lost business productivity and foregone income tax revenue from household employment interruptions. (Getty Images)
Indiana lawmakers face difficult choices as they iron out the final details of the next biennial spending plan. With revenue growth forecasted to be minimal, the General Assembly is balancing myriad pressures – leading to debates about property taxes, universal school choice, public health funding and Medicaid.
But in all these debates about numbers, our leaders must not lose sight of the thousands of Hoosier kids and families who are waiting for access to child care through the Child Care and Development Fund (CCDF). By investing in these families – as Gov. Mike Braun has advocated in his budget – we'll generate a massive economic return for our state and the working families who reside here.
Indiana loses billions each year by failing to provide comprehensive early childhood education investments. A U.S. Chamber of Commerce Foundation report showed that insufficient child care capacity costs Indiana over $4.2 billion annually in lost business productivity and foregone income tax revenue from household employment interruptions. Early childhood education is one of the best investments a state can make, as national reports show between a $4 and $9 return on every dollar invested in such programs.
Nearly a third of Hoosiers have experienced changes to their employment status due to lack of child care access, including reductions in hours, turning down promotions or new positions, and losing their jobs or leaving the workforce altogether. And since an announcement from the Family and Social Services Administration last December, more than 10,000 low-income kids are currently waiting for a voucher through CCDF.
Report: state loses out on $4.2B annually due to child care shortage
What else is at risk to Hoosiers if we don't fund child care? Thousands more children are at risk of not having their CCDF vouchers renewed if the state fails to adequately fund the program in the next biennium. Former Gov. Eric Holcomb's administration took many steps to increase access to the program, including expanding eligibility for low-income families and child care workers, but these updates often relied on one-time federal funding that has now been spent. If we fail to fund these families who currently rely on the CCDF vouchers, they will likely lose access to care.
That could imperil the financial viability of hundreds of child care providers if families lose their ability to pay for care, further damaging Indiana's already limited child care capacity, according to a recent analysis by Early Learning Indiana. Closures of providers would also impact families who do not rely on CCDF, as providers would struggle to maintain staff ratios and group sizes without enough enrolled students. A lack of funding in one area of the system creates instability in other parts, and instability hurts Hoosier families and businesses alike.
Braun's budget proposal contained a tremendous amount of support for early learning, including over $369 million for CCDF, nearly doubling funding for the state's On My Way Pre-K program, and the creation of a local child care assistance program to support local efforts to increase child care seats. It also included $600,000 annually to support pre-K services for blind and low-vision kids. These are the kinds of proposals that would help deliver on the governor's commitments to equip the next generation of Hoosiers through education and improve quality of life and economic opportunity for Hoosier families.
Ambitious plans and proposals have been and will continue to be floated, and questions about how to pay for it all will continue until a final budget is passed. No doubt there are many worthy and important demands for state funding.
As the General Assembly moves forward, it's key for lawmakers to recognize how vital child care is to Indiana's economic prosperity and household productivity. Now, more than ever, Hoosier families need the state's support.
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