Build Back Better Act’s Child Care Provisions: State-by-State Estimates
The most recent version of the Build Back Better Act, released by the House Committee on Rules on November 3, 2021, includes significant investment in many valuable programs and resources to help children and families thrive. By investing $400 billion in child care and pre-kindergarten, the bill will provide the robust investments needed to help create transformative change. This fact sheet explains the funding structure and distribution of resources under the child care provisions of the act and outlines the estimated state allocations for the first three years of the program.
Of the resources allocated to the Birth Through Five Child Care and Early Learning Entitlement, $100 billion will be distributed in the first three years to states, tribes, and territories. This includes $24 billion in FY 2022, $34 billion in FY 2023, and $42 billion in FY 2024.[i] These funds will be distributed using the existing Child Care and Development Block Grant formula for allocation of resources. Beginning in FY 2025, the funding adjusts to fit an entitlement structure, meaning funding is available to serve as many eligible children and families as participate in the program.
During the first three years of funding, states are required to allocate 50 percent of their funds toward expanding access to subsidies; 25 percent to support supply and quality building activities; and 25 percent—of which 7 percent is to be used to support state administrative costs—to support expanding subsidy access or supply building and quality activities. Beginning in FY 2025, the federal government will support state direct services expenditures with a 90:10 federal-to-state cost sharing structure, or federal-to-state match. States will receive federal funds for quality and supply building activities costs according to federal medical assistance percentage (FMAP) rates, which vary by state. In addition, 50 percent of state administrative activities costs will be paid for with federal resources.[ii]
In this factsheet, CLASP estimates the child care funding each state, Puerto Rico, and D.C. will receive in the first three years of the program.[iii]
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[i] In addition, $130 million each year is available to cover federal administrative activities.
[ii] Due to the requirements of the Budget Control Act of 2011 related to mandatory spending, open-ended or entitlement funding under this act is subject to sequestration or funding reductions. To avoid this, legislative text related to federal state cost sharing agreements beginning in FY 2025 lists differing match rates from those shown in this fact sheet. However, the federal-to-state match requirements in the text of this fact sheet will be the match rate applied to expenditures and federal reimbursements that states will experience, as the additional funds are solely to account for sequestration.
[iii] These estimates have been disaggregated to show the estimated distribution of funds allotted in FY 2022, FY 2023, and FY 2024. However, these estimates are subject to change based on state decisions, including whether a state applies for and receives funding directly.