New York State Budget New York City

Thousands of NYC Parents Are About to Lose Child Care Assistance

Absent more money from the state, city officials warn that they will hit a funding cliff as early as April.

Julia Rock · February 28, 2025

Within the past two and a half years, the number of children in NYC using a low-income child care voucher went from 7,400 to 60,600. | Photo credit: eagle102.net, Flickr; New York Focus illustration

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Thousands of parents in New York City are set to lose state-provided child care assistance as soon as April, according to records obtained by New York Focus and interviews with advocates recently alerted to the upcoming funding cliff.

Unless Governor Kathy Hochul and the state legislature opt to put more money into the Child Care Assistance Program, New York City will soon start turning down new program applicants — even if their income qualifies them for the subsidies. Some families currently enrolled in the program will also lose their benefits when they try to recertify, which happens every six or 12 months.

The Administration for Children’s Services recently told child care advocates in a briefing document that 4,000–7,000 children will soon lose assistance each month, “as the City would have insufficient funds to recertify their care.”

The city is facing the imminent funding shortfall as enrollment in the program has sharply increased in recent years and federal money dries up.

A voucher ticket shows an image of two children playing with colorful toys. In the background, text from the document, "Making Child Care More Affordable, Accessible and Equitable for New Yorkers."

In Brief: Child Care Assistance

Julia Rock

Albany has nearly quadrupled spending on the program since 2021, but the state still spends less than half a percent of its approximately $240 billion budget on it. The federal government also gave the program a funding boost during the pandemic, which helped cover the cost of expanded eligibility. As those one-time federal funds were spent, the state has had to pick up more of the cost.

There are 60,600 New York City children covered by the program. The city needs an additional $240 million this fiscal year to maintain that enrollment level, as well as an additional $900 million next year, according to an ACS slide deck.

Source: ACS slide deck.

The city is required by law to keep people enrolled in the program who also receive cash assistance. But other low-income people will be turned down for the program, even if they qualify under the eligibility rules.

Hochul’s executive budget this year aims to keep the program’s funding flat at $1.8 billion annually for the entire state, of which New York City receives about half.

“Families need child care assistance and uptake is surging,” said Dede Hill, the director of policy for the Schuyler Center for Analysis and Advocacy. “If the state doesn’t invest now, we’re going to see a huge step backwards.”

An ACS spokesperson said that discussions with the state about the funding shortfall are “ongoing.”

“We cannot allow this drop-off in services for these children and their families,” said Assemblymember Andrew Hevesi, chair of his chamber’s Committee on Children and Families.

What Happened?

In recent years, New York expanded eligibility for the program so that families earning up to 85 percent of the state median income — about $74,000 for a family of two — can get the benefit. The state has also upped its investment in the program, which receives substantial federal funding and a small amount from local governments.

That translated to a large enrollment jump in New York City: Within the past two and a half years, the number of children using a low-income child care voucher went from 7,400 to 60,600, an ACS spokesperson told New York Focus. That’s an increase of over 700 percent.

Child care costs in the city also sharply increased during that expansion. Between 2019 and 2024, the average cost of center-based child care in New York City increased by 43 percent to $26,000 a year, according to the city comptroller. (Care in family-based settings, operated out of peoples’ homes, averaged $18,200 in 2024.)

The comptroller estimated that at these rates, a family needed to earn $334,000 for child care to be “affordable,” per the federal definition of 7 percent of family income. The median family income in New York City was $88,053 in 2024.

“Child care assistance is a crucial part of the infrastructure of child care in New York City,” said Gregory Brender, chief policy and innovation officer at the Day Care Council of New York, which represents child care centers. “We hope the state is going to make an increased investment and really respond to this crisis.”

Another factor contributing to the shortfall: Last fall, the state adjusted the market rate for provider pay. The new rates will increase city spending on the program by 20 percent, according to ACS.

“While NYC supports these increases, as they will help stabilize child care providers, the State has not funded the increase,” the agency wrote in its slide deck.

Advocates said that they hadn’t yet heard from counties outside of New York City that are facing issues.

“I do think this is a warning that the shortfalls [in other counties] are likely to happen a little bit more quickly than expected,” said Hill.

Jie Jenny Zou contributed reporting.