There are major changes coming for families in Minnesota.
That is how Representative Dave Pinto explains it. The Democratic legislator, who chairs the state House Committee on Children and Finance Policy, explained that Minnesota’s legislators came to an agreement to prioritize children and families when spending the state’s record budget surplus of more than $17 billion. Support for a variety of early childhood programs will be included in the new funding, including scholarships to pay for child care, more money to pay the educators, the creation of a brand new statewide paid family and medical leave program, and a child tax credit for lower-income families. Minnesota will also create a new Department of Children, Youth and Families to support child care and early learning opportunities, and oversee many of these new initiatives.
Minnesota is putting more than $300 million in new spending toward early childhood initiatives. An additional $252 million for early learning scholarships, which is an annual scholarship worth up to $8,500, will go toward the child care or early education program for two years. The goal is to cap child care spending to 7% of a families’ income, the national standard set to deem child care affordable.
Such a dramatic sea-change came about through several factors—including changes in the electorate and the budget surplus.
“As President Obama said, elections matter, and we were so very fortunate, we had a trifecta of a Democratic governor, a Democratic Senate, and House,” said Nancy Jost, co-chair of the state’s Prenatal to Three (PN-3) Coalition and director of early childhood at West Central Initiative.
The $17 billion surplus, which was initially $10 billion, had gone unused in 2022, when a split House and Senate couldn’t come to a agreement and a tentative arrangement fell apart. The initial surplus had swelled with the additional federal funds from the American Rescue Plan. By the time Democrats came to control all three branches of state government, legislators were ready to take action.
Had the Republicans won, explained Pinto, they were expected to use the surplus to fund tax cuts. Instead, myriad social programs were able to see record gains. “This administration prioritized kids and families. When folks make lists of things from the session, this is one of many, many issues that won,” he said.
Jost credits state advocates working together to form a unified front, and knowing that having strong agreement among one another would yield better results than fighting among themselves for a smaller piece of the pie.
Democratic Governor Tim Walz’s Administration had set out an ambitious goal to make Minnesota the best state in the country to raise a family. Now, the state will join the 11 others that have enacted paid family and medical leave. Such programs provide positive benefits to families—including contributing to healthy cognitive and emotional development, improving maternal health and enhancing families’ economic security. Paid family and medical leave also reduces the demand for child care in the early months of an infant’s life if a parent is able to care for the child. (Infant care can be some of the costliest and hard to find child care for many families. The cost of providing care for an infant is, on average, 6% higher than the cost of serving a preschooler.)
The state is also investing in improving compensation for educators alongside creating a stronger pipeline to hire more. Over a two-year period, $5 million in state funding will be allocated to award grants for Grow Your Own early childhood educator programs that recruit and prepare community members to enter the teaching profession. For the past two years, Minnesota previously used funds provided by the American Rescue Plan to provide monthly payments to child care centers to increase compensation for providers under the “Great Start Compensation Supports” program. Under the new budget, such payments will become permanent.
“We need to establish the principle and recognition that this work is a public good,” said Pinto. “We pay for early learning and care once a child is five; there is no reason we shouldn’t be doing that when a child is younger.” The job of a child care provider, he says, is the lowest wage you can get with a high school diploma, and it shouldn’t be. Pinto estimates the extra funds from this program translates to $400 extra per month for a full time employee.
In addition, Minnesota has created a child tax credit worth up to $1,750 per child that is expected to cut child poverty in the state by one-third. This follows the success of the National Child Tax Credit created through the American Rescue Plan during the Covid-19 pandemic. The NTC lifted 2.9 million children out of poverty nationally, bringing the child poverty rate down from 9.7 percent in 2020 to 5.2 percent in 2021, the lowest rate on record. As one think tank posited: “Without additional action by Congress to renew the expanded Child Tax Credit, we should expect higher child poverty in future years.”
Both Jost and Pinto acknowledge that there is work still left to be done, but that this has been a sea-change in the field. Minnesota is now joining a handful of states, including Vermont and New Mexico, whose historic investments in child care will be part of the national conversation and possibly serve as a map for success for others.
“I’ve been in the field for 50 years. When I first started, there wasn’t any talk about policy in early childhood. As the years have gone by, we have gotten more and more organized. We have found our voices and are encouraged to talk about the things that families need. I think all of the things have progressed over the years,” said Jost. “We have a long way to go, but boy have we come a long way.”
Rebecca Gale is a writer with the Better Life Lab at New America where she covers child care. Follow her on Instagram at @rebeccagalewriting, and subscribe to her Substack newsletter, "It Doesn't Have to Be This Hard."
