Childcare Endowment Lands $300M

A new state childcare endowment has received the maximum possible amount of initial funding, as state Treasurer Erick Russell announced on Monday.

The new fund has received an initial transfer of $300 million from the state’s unappropriated general fund surplus, according to a press release from Russell — the largest allowable investment in the childcare fund under the state law that created it.

The state legislature created the Early Childhood Education Endowment this past legislative session, and Gov. Ned Lamont signed the legislation into law last week.

“This transformative investment and first-in-the-nation initiative is going to make a meaningful difference for Connecticut families,” Russell wrote in a statement. ​“Not only will the endowment provide greater opportunities for every child in our state, it will also invest in the child care workforce – including educator wage parity and a health insurance subsidy program – and provide better options for parents, particularly those forced to choose between entering the workforce or staying home to avoid the high cost of child care.”

The endowment is slated to fund a multi-pronged approach at making childcare more accessible for families and more sustainable for providers, including:

• An increase in the number of state-funded childcare slots.

• A historic tuition subsidy that would make those childcare slots free for families making under $100,000 per year and cap tuition at 7 percent of a family’s income above $100,000 starting in Fiscal Year 2028.

• A healthcare subsidy for childcare workers.

As of Tuesday, 12 percent of the newly-created fund will go toward the Commissioner of Early Childhood to jumpstart those initiatives. After two consecutive years of that 12 percent allocation, the percentage of the endowment annually available to the commissioner will drop to 10 percent. The governor has the ability to transfer ​“up to” $300 million per fiscal year from the state’s budgetary surpluses into the endowment.

“Childcare costs have been one of the leading factors in whether or not women are able to enter the workforce, in a family’s ability to buy a home,” State Rep. Roland Lemar told the Independent in a Tuesday interview. ​“We’ll need to come back to ensure” that more funds will be transferred to the endowment in the coming years, Lemar said, but the maximum possible initial investment is a statement that ​“Connecticut is a great place to live, to work, to raise a family.”