What Vermont’s Historic Childcare Law Teaches Us

Vermont is an example of a state that has significantly expanded its public childcare system since its pandemic-era federal funding expired. In 2023, it became the first state to codify a childcare entitlement into state law: Act 76 expanded Vermont’s public childcare system to near-universal, making childcare more affordable and available for thousands of families. Act 76 expanded income eligibility for childcare subsidies, offering childcare support for families earning up to 575 percent of the federal poverty level (FPL), or $189,750 for a family of four. Families with incomes at or below 175 percent FPL do not have to pay a family share—making childcare free for the lowest-income families (about $57,750 for a family of four).

Critically, Act 76 invested early in supply-building through increased provider reimbursement rates, direct financial support in the form of transitional “readiness payments,” career development and pipelines, business and capacity building support, and more. A progress report from the state legislature shows that families describe the Act 76’s lower copays as a “game changer,” and that providers report that the predictable revenue stream has allowed them to make wage increases, improvements to employee benefits, and new investments in quality.

The success of Act 76 is a result of years of organizing and activism by many providers, parents, policy advocates, grassroots organizations, and community members. I spoke to one of those people: Sarah Kenney of Vermont’s Let’s Grow Kids, which has been at the ground level of Vermont’s path to expanded childcare.

Sarah Kenney: I grew up in Vermont, then moved away for a while like so many young people from rural areas. I then came home for what I thought would be a short time—but I found a rewarding career, found love, had a child, and eventually realized that I had settled in Vermont. I was doing work I loved, work that felt really important: advocating for policy change in the state house alongside survivors of sexual and domestic violence. But the work was in Montpelier, almost an hour drive from our house in Burlington—which was fine before I had a child.

As soon as I learned I was pregnant, I got on all the childcare waiting lists, but our son was almost two years old before we lucked into a spot. In the meantime, I cut my hours down to part-time, we sold my partner’s family business and he started working part-time from home, and friends and family pitched in where they could. We scrambled and were constantly exhausted, and it felt like we barely saw each other except to hand off a crying baby.

When I was living it, this all felt like a personal failure. Even with a masters degree, lots of connections, and a pretty comprehensive knowledge of Vermont’s social service system, I couldn’t make it work. When we finally found a space in an incredible childcare program close to home (only part-time, because it was all that was available), it felt like we could finally breathe again. But I felt guilty that we had been able to find something when so many others couldn’t. We had three magical years in that program where our son thrived, and then he started kindergarten. It was a big relief to not have to pay for childcare anymore, but his days ended at 2:30 and there were no spaces in the after-school program, so our careful balancing act fell apart again. I realized I needed a job closer to home with more flexibility.

I saw a friend at the elementary school one day, and she mentioned she was hiring for this new campaign around childcare. And the office was walking distance from the elementary school! It felt like fate. Once I started working at Let’s Grow Kids (LGK), I realized that what had felt like a personal failure for me was actually a systemic failure. I wasn’t failing my child, the system was failing my family and so many others. It had felt so isolating at the time, but I quickly discovered that there were thousands of us living the same nightmare. There is power in that kind of solidarity—knowing you’re not alone.

The solution lay in policy change, and the Let’s Grow Kids founders knew that in order to create the kind of change that would be necessary, we would need to build an overwhelming groundswell of public support for state investment in the childcare system. They launched a 10-year campaign in 2015 to achieve quality, affordable childcare for all Vermont children by 2025. I was one of the first hires.

Sarah: Vermont has one of the most expansive childcare systems in the country, and it’s working because the policy details were cocreated with early childhood educators, childcare program directors, parents, and employers every step of the way. Vermont legislators made the courageous decision to raise new revenue to provide a sustainable, ongoing source of funding to improve affordability, access, and quality of childcare. Policymakers also made this into an entitlement, so that all eligible families will receive help from the state to afford childcare, regardless of what has been budgeted for the program. We ensured that the policy was carefully structured so that families are supported to afford care, and programs receive higher reimbursement rates from the state so they can increase wages and benefits and serve more children. We’re also growing the pathways for people to enter the early childhood education (ECE) profession, and the state has made funds available to programs looking to start up, expand, and increase their quality.

It took 10 years to build the momentum that was needed to pass Act 76. Along the way we worked to support and organize early childhood educators, parents, grandparents, pediatricians, everyday Vermonters, and—crucially—businesses to generate a groundswell of community support. We all worked together to create an authorizing environment in which legislators could do the hard work of passing major legislation that included a modest new payroll tax to fund the transformation of our childcare system.

Sarah: The policy was designed alongside people working in and directing childcare programs. We knew that we couldn’t just make childcare affordable for families—we also needed to ensure the early childhood education workforce would be professionally respected and compensated, so that there would be capacity and all those families newly eligible for childcare assistance would be able to find spaces for their children. And you need adequate IT infrastructure to underpin all of this.

All of these pieces all have to move together—it’s a recipe, not an à la carte menu. And we needed to phase it in over a number of years so that we weren’t overwhelming the system by doing everything all at once. We had a few initial bills—in 2019, 2020, and 2022—that laid the groundwork for the new law that passed in 2023. That gave us a chance to make sure the proposals were sound and implementable, and to prepare the system for big investment.

Act 76 represents a lot of lessons Vermont learned during the pandemic, when federal funds were flowing to the state for childcare stabilization. The state learned how to quickly get money out to programs and communities, without onerous grant applications or unnecessary restrictions that render the funding inaccessible to those who need it most; how to be responsive to local needs and flexible with funds for things like growing childcare capacity and investing in program quality. We also learned the importance of administrative transparency—and now the state administrative agency has a data dashboard where they track implementation outcomes and keep the field apprised of progress, new rules, and the like.

Another pandemic-era lesson learned was the importance of considering all aspects of the system—families, early childhood educators, program owners and directors, employers, childcare referral agencies that are processing financial assistance applications, IT infrastructure, and administrative capacity at the state agency.

We also knew that just passing transformative legislation isn’t enough—much of the real work comes in the implementation. So we built in time and systems to make sure the field and the public were informed and engaged in decision-making as the new law rolled out. We created a series of implementation work groups where we met monthly with a range of impacted partners to gather information about what was going well and what wasn’t, and shared that information directly with the state agency implementing the new law.

Act 76 also built in accountability mechanisms. The law tasks our state’s early childhood advisory council, Building Bright Futures, with tracking implementation and outcomes and providing regular reports to the legislature and Vermonters. I would be remiss if I didn’t also note that a key part of the success of Act 76 implementation has been having a great state administrator in the deputy commissioner of the Department for Children and Families.

Sarah: When we started in 2015, there were no statewide models to look at. In the early days, some of our team took a field trip to Quebec, our neighbors to the north, to hear more about that province’s experience with large-scale childcare transformation. We learned from them about the importance of growing capacity and investing in quality—specifically the ECE workforce—at the same time that you expand affordability for families.

Our initial policy proposals were based on the Birth to Three for All law in Washington, DC, which was the only large-scale US model at the time. DC passed some very promising practices, but didn’t fund much of the law for several years. Then during the pandemic, we were part of national discussions that were happening around Build Back Better, and a really inspiring conversation about what federal policy would look like if it truly supported states to transform their childcare systems. It was such a blow when that legislation failed in the Senate—it would have made our work in Vermont so much easier. But we now had a blueprint of what a good childcare policy looked like that we refined with our many partners in Vermont. As we got closer to 2023, we worked alongside partners in national organizations and colleagues in states like New Mexico, Colorado, Oregon, Massachusetts, and New York to share notes and lessons we were all learning. The power of that kind of interstate networking shouldn’t be underestimated.

Sarah: From the very early days, even before the campaign launched, LGK founders saw the importance of hiring people closest to the work—skilled early childhood educators—to work directly with childcare programs. First, they organized school districts to partner with local childcare programs to offer pre-K. They then provided grants and mentoring to childcare programs to increase quality. Then we launched the Make Way for Kids grant program, which provided capital for programs seeking to start up, expand, or increase quality. That work was first funded with philanthropic funds, and then the state started providing funding once we demonstrated that it worked. We saw immediately that capacity-building only works when you couple it with intensive technical assistance.

In 2025, LGK prepared to sunset, but we knew that the programmatic part of our work needed to continue. We connected with First Children’s Finance and helped them to open a Vermont office, and they’re now providing the technical and grantmaking support for the childcare program. They’re also tracking supply and demand; they recently found that between 2024 and 2026, the childcare supply gap in Vermont decreased by 19 percent.

Sarah: Once again, because we had early childhood educators cocreating our policy agendas, we had deep insight into the workforce crisis. For many years, Vermont has been building workforce career pathways and retention strategies, but they were embedded in a resource-starved system. We’ve had a TEACH scholarship program for many years, and in 2021 the legislature created a student loan repayment support program. We also have an apprenticeship program and a youth apprenticeship program so students can graduate high school with classroom experience and stackable credits.

We also understood early on that we couldn’t increase affordability without improving access for families, and we couldn’t expand access without a robust, skilled, professionally compensated workforce. Act 76 made important strides and set the stage for future work here, but it hasn’t solved the problem yet. We are seeing wages go up, and we’re hearing from many programs that are finally able to start offering benefits. Increased reimbursement rates for childcare programs have led to increased wages for early childhood educators. Recent BLS data (May 2025) shows that the median hourly wage for childcare workers in Vermont is $18.29. In 2022, the median hourly wage was $14.07.

The next steps are continued increases in reimbursement rates, and once they get closer to the true cost of care, implementation of minimum pay standards. Vermont was also on the vanguard of the work to create a profession of early childhood education aligned with the Unifying Framework [a national movement to create a “unifying framework” of credentials that would articulate a national standard of the career pathways, competencies, qualifications, compensation, and infrastructure for early childhood educators across the country]. And the legislature has been considering a bill to create a formal profession of ECE through the state’s Office of Professional Regulation. That’s a key part of retaining and growing the ECE workforce in Vermont.

Sarah: It’s important to remember the context of the childcare crisis prior to Act 76. Vermont’s childcare system—much like every other state—was severely underfunded, so Act 76 helped stabilize the system. Now, we’ve clearly turned a corner and we’re closing the gaps, but we’re not there yet.

The LGK childcare campaign had three major goals, which the legislature actually embedded in a bill that passed in 2021, the precursor to Act 76. They are:

1. No family spends more than 10 percent of their income on childcare.
2. All children have access to a skilled, diverse, robust, professionally compensated early childhood education workforce.
3. All families have access to childcare when they need it.

Act 76 has made huge progress toward these goals, but we still have families over 575 percent FPL, or ineligible for subsidies, who are paying significantly more than 10 percent of their income on childcare. We still have childcare shortages in parts of the state, so we need to stay laser-focused on growing capacity, especially for infants and toddlers. And that capacity shortage is directly tied to the fact that we still have a shortage of ECE providers in Vermont, so we desperately need to continue growing the workforce and increasing compensation and benefits. 

Sarah: We’ve always known—and have all acknowledged—that we really do need more federal support. The barrier to creating a truly universal system is primarily funding. Vermont and other states are making progress, but imagine if we had a federal government that prioritized major childcare funding. Significant federal investment would unlock so many possibilities at the state and local level.

Without additional support from the federal government, it’s really hard for states to raise enough revenue to achieve true universality. Even in New Mexico, where they have land grant oil funds to work with, there are still work and education requirements to qualify for free childcare.

Sarah: First, this is a problem that requires large-scale, sustainable public investment. Sustainable funding is the absolute key here. The childcare crisis will not be solved by employers giving their employees flexible work schedules or childcare scholarships (although those are good employment practices), or by other band-aid solutions. The current childcare system in the US is a market failure, and the “marketplace” will not magically right itself without sustained public investment.

Second, listen deeply to the people who are most directly impacted by the childcare system—early childhood educators, families, and employers. They know what needs to happen and can warn you of the potential pitfalls. Listen especially to families who traditionally haven’t had access to formal care.

Lastly, do not try to address one aspect of the problem in isolation. You can’t help more families afford childcare if there are no programs for their children to attend. You can’t create more childcare programs if there are no early childhood educators to work in the classrooms. All of this requires long-term, sustained public investment.

Related Resources