February 19, 2025

Underinvestment: The Larger Problem Underpinning Colorado’s Child Care Freeze and the Cost to Families and our Economy

PERSPECTIVES | Early Childhood

Colorado’s child care system is broken. Here’s what we can do to fix it.

Counties across Colorado have had to take the unwanted action of freezing working families’ applications to the Colorado Child Care Assistance Program (CCCAP). This critical program helps almost 26,000 children attend child care and thousands of adults participate in the workforce and fuel our economy.

These freezes – impacting families in Adams, Arapahoe, Boulder, Broomfield, Denver, El Paso, Jefferson, Larimer, and Weld counties – could last two to three years, and shine a light on a systemic problem: Colorado’s child care system is broken. It doesn’t work for families, providers, or educators, and it’s slowing economic growth.

How Did We Get Here?

At the root of these freezes in child care subsidies, the symptom of a larger problem, is a difficult tradeoff. The state has rightly increased payments to child care providers to help cover their rising costs—a necessary move to ensure providers can stay in business and offer quality care. But with a finite pool of funding, these increased program expenses have meant that fewer families can be served by the program. This tension between ensuring livable wages for child care educators and maintaining affordability for low-income working families reveals a fundamental flaw in the very design of our child care systems, a flaw thrown into stark relief by these freezes. The pie is simply too small.

“We want to be paying providers the appropriate rate,” program director Sarah Dawson at the Colorado Department of Early Childhood said. “But it comes at a cost.”

But is that cost one we should accept? This is the breaking point. Educator compensation and affordability for families is an increasingly impossible balancing act; working families striving toward self-sufficiency cannot pay more and teachers cannot work with less funding. Within the confines of existing resources, compounded by the child care market shortage, the system as it is built quite simply does not work. And the freeze in counties being able to serve families underscores the need for a fundamental reimagining of how we fund and value early childhood education.

The True Cost of Care in Colorado

For the past decade, discussions about affordability in Colorado have largely focused on housing, which is 20% more expensive here than the national average.¹ Recently, though, the rising cost of child care has begun to overshadow even this significant housing burden.

As of 2024, Colorado ranks as the 8th most expensive state for infant care and 11th for the overall cost of raising a child. For an average Colorado family, child care costs consume 38% of their annual income for just one infant and a 4-year-old.² These numbers are far beyond the recommended affordability threshold of 7% set by the U.S. Department of Health and Human Services.

The result is that families then carry the weight of impossible choices. And as the cost of child care continues to increase, the percentage of families navigating the impossible grows too. Child care affordability is not a problem confined to low-income working families; it affects middle-income households as well. Across Colorado, more and more parents and grandparents are finding themselves having to choose between sacrificing careers, cutting back on other essential expenses, or placing children in lower-quality care. Half of Colorado parents report that they’ve sacrificed work hours, taken unpaid time off, quit jobs or avoided job searches due to child care needs.⁵ In fact, the Common Sense Institute reported that 10,200 Colorado mothers have been forced to leave the workforce due to child care issues. ³

And while a growing number of middle-income families struggle, the burden is particularly heavy for low-income families, many of whom are left with virtually no options. 9 out of 10 low-income families in Colorado do not receive child care assistance for which they qualify.⁴ This is not just a statistic; it’s a reflection of thousands of families struggling to afford one of the most basic necessities for their children and their households.

Addressing the Current Crisis… And Beyond

But is the reimagining of a system so entrenched and flawed possible? Yes, it is! And the path to that future system is one of collaboration. The child care funding freeze in Colorado presents a critical opportunity for all of us—families, educators, providers, business leaders, policymakers, community stakeholders, and philanthropy—to engage in an open and honest dialogue.

This critical conversation must encompass several key areas. Above all, we must acknowledge the true cost of quality child care. This includes not only the direct costs of care but also the long-term economic benefits of investing in early childhood development, for families and for Colorado’s economy. For instance, if all the mothers above chose to return to employment, it would create $3.787B in Colorado’s GDP and 29,000 jobs. ³

Second, we need to be clear about funding: there simply isn’t enough money being invested in this public good. In a dynamic where the consumer cannot afford the product (provider), and the provider cannot afford rent or food, sustained and adequate public funding to address both of these issues is necessary. Not one or the other. Government plays an essential role in addressing this endemic issue, and a vital component of any answer is greater public investment in child care.

To that end, we also must consider the needs of both families and educators. Affordability for families is paramount, but we must also ensure that early childhood educators are fairly compensated and have access to the professional development and support they need. These two goals are not mutually exclusive; in fact, they are intrinsically linked. A well-supported workforce is essential for providing high-quality care.

Finally, this dialogue must extend beyond the immediate crisis. We need to develop a long-term vision for early childhood education in Colorado, one that recognizes its importance as a public good, economic driver and investment in its future.

The time for action is now. We can no longer afford to treat early childhood education as an afterthought. It is an essential foundation for our children’s success, our economy’s prosperity, and the well-being of our society. By engaging in a thoughtful and collaborative dialogue, we can create a brighter future for Colorado’s children and families.

This Perspective was co-authored by Gary Community Ventures, Buell Foundation, and David and Laura Merage Foundation, three Colorado-focused philanthropies committed to improving early childhood, child care, and maternal health. Colorado philanthropies have invested hundreds of millions in early childhood education over the past many decades, demonstrating our commitment to this critical area. However, we recognize that while philanthropy plays a vital role in the ecosystem, sustainable, long-term change requires robust public funding.

We invite you to join us in this important work. Learn more about our collective efforts and how you can get involved by signing up for our Child Care Champions mailing list.

Sources

“Cost of Living in Colorado,” RentCafe (Retrieved February 2025).
The Growing Strain on the Child Care Business Model, Common Sense Institute (July 2022).
Unlocking Work: Impacts of Improving Access to Affordable Child Care, Common Sens Institute (October 2024)
In the Know: The Colorado Child Care Assistance Program (CCCAP), The Bell Policy Center (September 2023).
Healthier Colorado 2023 Voter Opinion Survey, Healthier Colorado (January 2024)