Indiana cuts child care provider reimbursements to close funding gap

The Indiana Family and Social Services Administration is cutting voucher reimbursement rates for the Child Care and Development Fund. The agency said the cuts are meant to address a $225 million funding gap.

The cuts range from 10 percent to 35 percent depending on the child's age. Infant and toddler voucher rates will drop 10 percent, and voucher rates for children 3 to 5 years old will decrease by 15 percent. Vouchers for school-age children from kindergarten to 12 years old will see a 35 percent cut.

Adam Alson is the director of FSSA's Office of Early Childhood and Out-of-School Learning. He said the previous governor's administration overenrolled children in the state's CCDF program.

This state-administered federal program provides financial support to low-income families for child care so parents can work, go to school or attend training.

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Alson said the prior administration used temporary COVID-19 relief funding to pay for vouchers without a "sustainable" plan to keep people on the program once the money was gone. He said that left FSSA to choose between slashing reimbursement rates for providers or removing children from the program.

"We've regrettably had to make a tough, but necessary decision to prioritize children over child care providers," Alson said.

Some lawmakers oppose these cuts, including Rep. Carey Hamilton (D-Indianapolis). In a statement Hamilton said, while Governor Braun and the Republican majority provided private school vouchers to billionaires, they put working families in a situation of choosing between their job or staying at home with their children.

There are currently 55,000 Hoosier children on the state's CCDF program — a decrease from December 2024 of 68,000.

Timoria is our labor and employment reporter. Contact her at tcunningham@wfyi.org.