What will the “child care trust” do?
Historic investment is moving the needle on affordability
Every dollar invested in child care today will help parents afford care in the future. The child care crisis boils down to two realities: providers are leaving the profession because they can’t make a living wage, and families can’t afford to pay more. That’s why Connecticut’s creation of the Universal Preschool Trust is a crucial, historic step towards putting child care within reach of more parents.
Now signed into law, Senate Bill 1 directs some of the state’s annual surplus into the trust fund. The trust will only grow as lawmakers invest more in it and the fund gains interest. It’s a way to fund child care subsidies and programs with stability and certainty.
The trust will eventually be large enough to cover all or most of the cost of child care for Connecticut families. It will also help fund transportation to preschool, create more child care slots, and help quality programs afford the cost of accreditation.
So, when will this all happen? The state plans to release a report every year that will explain more about the trust’s future and when milestones could happen. There will also be an online portal where parents can learn more about if they qualify and what programs are covered. For now, we know some basics about how the trust will work, how it will be funded, and when parents could start seeing relief.
The trust’s impact is spread out over four phases that build off each other:
Phase One: This will launch after July 1, 2027, when the trust’s rate of return is high enough to cover the families who qualified this year. It will pay for the cost of some public preschool programs, like Early Start. Starting in this phase, families earning up to $100,000 a year (before taxes) will not have to pay for preschool care. Families that earn more than $100,00 a year would pay 7% or less for the cost of preschool care.
Phase Two: The timing for this phase is harder to predict. Essentially, it’ll happen when the amount of interest the trust earns is high enough to pay for subsidies for all of the children who qualify. It will also be used to pay for adding more slots to qualifying preschool programs and fund transportation to preschool.
Phase Three: This will start one year after Phase Two. It will expand free preschool to children who are being taught by private providers.
Phase Four: This will start one year after Phase Three. At this point, families earning less than $100,000 per year (before taxes) will no longer have to pay for infant and toddler child care. Families making more than $100,000 will pay 7% or less for the cost of infant and toddler care.
The creation of the trust is more than a win for families – it’ll also boost salaries for workers. Currently, too many early childhood educators aren’t earning a livable wage. That’s why up to 40% leave the profession each year, which is a loss for them and for the children they teach. It’s already hard for many parents to find care. Losing providers only makes it harder to find an affordable seat.
The state can invest up to $300 million of its massive surplus in the trust this year. While it’s a historic investment in affordable child care, lawmakers must continue to add to the fund so that parents don’t have to wait years for relief. Every dollar invested now will earn more interest to help future families.
If you’re struggling to pay for child care right now, before the trust kicks in, help may be available. The state’s existing Care 4 Kids program provides subsidies based on your income and how many children are in your family. However, the program hasn’t previously been funded enough to match the true need.
Our economy doesn’t work without child care. One in five parents have had to quit their job or have been fired because they’ve had problems finding or affording child care, according to a state report.
The creation of the trust is a thoughtful first step to creating a Connecticut where every parent has the freedom to pursue the best child care option for their family.
