New funding could be coming to Indiana’s child care voucher program, but it likely will not be enough to cover the current waitlist. Advocates and providers are urging the state to act sooner rather than later, before more child care capacity is lost.
The funding may not be enough to address the over 34,000 children on the waitlist, but advocates say any kind of increase in funding is a welcome change, as families have been waiting for months and as child care providers close classrooms.
“I really think that this funding can be sort of transformational,” said Sam Snideman, the vice president of government relations for United Way of Central Indiana.
“Transformational in the short term in terms of providing a greater level of stability for the provider community, but it should also open new doors for folks who have had to be out of the workforce, or who have been sort of tenuously hanging on in the workforce because they haven't been able to afford child care.”
The child care vouchers are part of the federal Child Care and Development Fund, or CCDF, which helps families at or below 135% of the federal poverty level pay for child care.
During the pandemic, Indiana utilized more than $1 billion in federal aid to expand the CCDF vouchers.
As federal funds expired in late 2024, the state reinstated a waitlist for vouchers.
Snideman says that since the beginning of 2025, more than 200 providers across the state have had to close as a result of the changes.
Some relief could be coming soon. Lawmakers recently passed a bill that could free up $300 million from the "Financial Responsibility and Opportunity Growth Fund,” or FROG fund.
Previously, this fund was restricted to augmenting appropriations for state prisons, Medicaid, and the Department of Child Services. It now adds the CCDF vouchers as an allowable use for these dollars.
The changes made in Senate Bill 4 do not hand the $300 million directly to the office overseeing the vouchers. Instead, it allows the office to "compete" for a share of that money.
Any request to use these funds must be approved by the Indiana State Budget Agency and is subject to review by a budget committee.
Child care vouchers will be weighed against the financial needs of the state’s correctional facilities and Medicaid program, which often face their own fiscal pressures.
Sniedman ultimately sees the changes made to the FROG fund as a hopeful sign that the state will continue to act to address the waitlist and further examine how it should provide more child care help.
“This is a down payment on continued investment and policy change to support families, providers and ultimately, communities,” Snideman said.
May be too late for some providers
It's unclear how soon the funds could be sent to the vouchers, but for some providers, the funding is already too little too late.
Shannon Schumacher, president and CEO of The Villages of Indiana, one of the state’s largest foster care and child welfare organizations, says the funds may not help them.
"I really hope we start chipping away at the wait list into childcare as soon as possible," she said. "But we have another issue -- the capacity has shrunk."
Since so many families with infants have been unable to receive a voucher, some providers report closing rooms or laying off staff as low-income families lose the ability to pay for high-quality care.
The Villages runs a 170-bed childcare facility where 80% of the enrolled families rely on vouchers. After fundraising nearly $1 million to build two new infant classrooms, those rooms currently sit empty because families simply cannot afford the tuition without state assistance
"We don’t have the pipeline of kids moving out of an infant," Schumacher said. "That is going to be a problem for everyone in the state."
State leaders signal a willingness to provide more funding
Gov. Mike Braun has said he views child care as an important aspect of the state’s work around issues of affordability and economic development.
Braun said recently that following the news of the most recent state budget forecast predicting a surplus of nearly $5 billion by the middle of 2027, he is optimistic about further work to address child care needs.
“If I've got latitude, I'll probably do something, and I think the legislature provided it, but they're not willing to open up the budget until January,” Braun said after a recent meeting of the Indiana Economic Development Corporation.
“That's probably wise, because I think we need to see a consistent exceeding projected cash flows, and then we'll have a lot to work with for either reducing taxes or investing it in good ROI, for things that the state should have a little more involvement with,” Braun said.
Co-chair of the State Budget Committee, Sen. Ryan Mishler (R-Mishawaka), said that while the FROG fund may be a “band-aid” for child care funding, he anticipates more work to be done next legislative session, when lawmakers will propose a new budget.
“It’s a much larger problem and, next year, I will be presenting you with some very large numbers and we will have some very difficult decisions to make,” Mishler said when the bill passed out of the Senate last month.
Contact Government Reporter Caroline Beck at cbeck@wfyi.org
Eric Weddle is WFYI's education editor. Contact Eric at eweddle@wfyi.org or follow him on X at @ericweddle