AUSTIN, Texas — Texas continues to grapple with a persistent challenge: providing accessible and high-quality child care at an affordable rate, as outlined in a recent policy brief by researchers at the LBJ School of Public Affairs at The University of Texas at Austin. The current shortfall not only affects working families but also impedes the state’s economic growth.
“Child care is poised to become one of the paramount policy issues confronting the Texas Legislature when it convenes again,” said Steven Pedigo, a professor and director of the LBJ Urban Lab. “Although Texas has made some progress in alleviating burdens for child care providers, there is still more work to be done. Improving access to affordable, quality child care is essential for maintaining economic development and enhancing the well-being of our Texas communities.”
The child care challenges facing Texas include:
- The average cost for infant care in Texas is $777 per month, or $9,324 per year — nearly 14% of the state’s median household income of $67,321 and more expensive than a year of in-state tuition at a four-year public college.
- Between March 2020 and January 2023, Texas had 5,000 child care centers and licensed family homes close, leaving the state with 27% fewer child care programs compared with pre-pandemic levels.
- More than half of the counties in Texas have become child care deserts, where there are at least three times as many children under age 5 as there are fully licensed child care slots available.
- The failure to provide adequate child care for working families costs the state $11.4 billion annually from productivity and revenue losses for parents, businesses and taxpayers.
- Texas child care workers earn poverty-level wages, with an average wage of $12 per hour. At this rate of compensation, child care workers would have to spend more than 35% of their monthly income on the average cost of infant care.
The inefficient child care system in Texas is a multifaceted issue that will require a variety of actions from all sectors and levels of government to solve. After conducting roundtable discussions and interviews with policy organizations, child care providers, community development organizations, city and state officials, and more, the researchers identified four areas for policy advancements:
- Economic Incentives: Better reimbursement rates, tax exemptions and low-interest loans are needed to help child care providers expand and improve. This could involve possibly increasing Texas Rising Star reimbursement rates — for nonprofit, for-profit and corporate providers — to align the state subsidy with current market rates or providing low-interest loans for those opening new child care facilities.
- Streamlined Texas Rising Star Accreditation: A streamlined accreditation process is needed to remove barriers to expansion and encourage child care providers to strive for high-quality ratings. Texas policymakers can update the approval process to make it easier for proven child care providers to expand their services.
- Employer Child Care Assistance Programs: An employer child care assistance program is needed not only to help employees afford care for their children but also to help businesses attract and retain talent. Texas policymakers can incentivize employers to contribute to child care expenses with tax credits while maximizing investments into working parents by matching employer-provided child care funds.
- Cross-Sectoral Partnerships: A confluence of leaders from the public sector and the community is needed to develop innovative local solutions that meet the needs of working families. Municipalities in Texas need creative solutions to build child care capacity, and many are already taking steps from Austin and San Antonio to Fort Worth and Amarillo. Growing cross-sectoral partnerships can diversify funding streams and expertise to develop long-lasting industry improvements.
