Local child care providers voiced relief Tuesday after Gov. Mike Braun announced $200 million would be pumped into a voucher program that helps needy families pay for child care.
Braun said about 14,000 low-income children would soon be eligible for vouchers that provide free and reduced child care subsidies by late May. The state budget committee will consider a funding transfer Thursday for the $200 million.
The additional money will bring the enrollment to about 57,000 children.
Ashley Eaves, who operates the Elka Child Education Center in Gary, said the news couldn’t have come at a better time.
“I pray it’s soon because we are hanging on by a thread,” she said of the center founded by her grandparents in 1968.
Eaves said she’s licensed to serve 153 children but only has 42 enrolled now because parents can’t afford the cost.
“We can really use that, a lot of our families need that,” Eaves said of the new funding she estimated might allow for the enrollment of about 30 children.
Nina Burton, who owns the Woodland Child Development Center in Hammond, watched Braun’s news conference remotely.
“It’s a huge relief, an answer to our prayers,” she said. “In some cases, we’ve had to turn some families away.”
Burton said Woodland isn’t 100% dependent on vouchers. She said they have a more diversified client base, but voucher families are still a large part.
Depending on the age group, Burton said Woodland could accept as many as 30 new enrollees.
“Indiana’s child care system reached a breaking point in late 2024 when temporary federal COVID funds expired,” Braun said. “A lot of stuff got done through the chaos of borrowing and spending COVID funding.”
With the federal COVID relief money, Indiana’s child care enrollment expanded to 69,000, but it wasn’t sustainable when the federal money ran out.
The state created a wait list for the vouchers in 2024, and it’s swelled to more than 35,000 children.
Last September, the Indiana Family and Social Services Administration announced reduced reimbursement rates for child care providers to ease the program’s costs.
It meant providers, like Elka, would get 10% to 35% less from the state depending on the age of its children served.
Early Learning Indiana has reported about 320 child care centers have closed.
Gary resident Brandy Hart, who works two jobs, said last year the weekly child care costs for her two young children, who are enrolled at Elka, increased from $100 to $227.
“How can we survive out here if everything is taken away,” Hart said in a November Post-Tribune report.
Last year, Braun paused new enrollment until 2027 because of a dire revenue forecast. That forecast, Braun said, erroneously based on tariff impacts, has changed for the better.
A March revenue forecast showed the state is about $653 million ahead of its projections.
Braun pledged Tuesday to continue the new funding.
“And this investment isn’t just for one year,” Braun added. “It marks the start of a sustained commitment to keeping care affordable and giving families long-term confidence that the support they count on will remain in place. This investment strengthens our workforce while expanding opportunity for families.”
Braun said child care is crucial for working families.
“Indiana’s child care voucher system is more than a support program — it’s an economic engine,” Braun said. “When parents have access to reliable, affordable child care, they can pursue better jobs, gain new skills, and build stronger futures.”
Adam Alson, director for the Office of Early Childhood and Out-of-School Learning, said the funding will aid working families.
“This investment allows us to reopen access after 15 months of frozen admissions, address the most urgent needs, and put Indiana on a sustainable path forward,” he said.
Earlier this year, lawmakers approved a Senate bill allowing the state budget committee to transfer funding into the Financial Responsibility and Opportunity Growth fund for the purpose of funding the Child Care and Development Fund voucher program.
Democrats said the child care funding should have come sooner.
State Rep. Earl Harris, D-East Chicago, said the outcry from parents made the difference.
“With rising prices, Hoosiers across the board are struggling to make ends meet. This funding diversion could not have come at a better time. This funding will help daycares stay open, ensure that child care facilities are able to provide quality care for our children and help more parents get into the workforce to help support their families,” said Harris, who chairs the Indiana Black Legislative Caucus.
State Rep. Carolyn Jackson, D-Hammond, said child care centers closed when funding slowed.
“This wait list should have never happened in the first place,” she said in a statement. “The supermajority found the time to debate mid-decade redistricting and charter school voucher expansion, but chose to ignore the tens of thousands of Hoosier families in dire need of child care. This funding diversion came too late, but I’m thankful it’s finally being addressed.
The Indiana Chamber of Commerce applauded the funding increase in a release.
“This infusion represents approximately five times the current funding level and positions Indiana as a national model. It’s game-changing, pro-family, pro-workforce and will help Indiana compete and win. It will expand access to CCDF vouchers for eligible families and help more Hoosiers enter or stay in the workforce – and support employers who need reliable, ready workers,” said Chamber President and CEO Vanessa Green Sinders.
However, because of the child care issues, she said Indiana lost an estimated $4.2 billion annually for its economy, including a billion-dollar annual loss in tax revenue. She cited the Chamber’s 2024 child care report that found 40% of parents who had child care disruptions left the workforce.
Carole Carlson is a freelance reporter for the Post-Tribune.
