NC Lawmakers Propose Child Care Shake-Up Amid Funding Crisis

The child care sector in North Carolina is at a crossroads. With federal pandemic-era stabilization funding now exhausted and no further state grants on the horizon, the North Carolina legislature is rolling out proposed reforms that could change the landscape of early childhood education — for better or worse, depending on who you ask.

Funding Dries Up, Pressures Rise

After COVID-era federal funds ran out in July 2024, the state stepped in — twice — to keep child care centers afloat. But that lifeline ended in March 2025. Now, without stabilization grants, providers are bracing for impact.

Kristi Snuggs, president of Early Years, a nonprofit focused on quality early care, says the true financial hit hasn't fully landed. "It’ll take a few payroll cycles," she warned. "Then we’ll see the backlash."

Some providers are hiking tuition, closing infant rooms (the most expensive), or offering Friday-night care to stay open. Others are shutting down entirely.

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Cassandra Brooks, owner of Little Believer’s Academy in Garner and Clayton, said bluntly: “It’s almost not worth it to run a child care business anymore. Everybody’s trying to figure a way out.”

Legislators Aim to “Reform” the System

In mid-April, the North Carolina House and Senate passed separate bills (House Bill 412 and Senate Bill 528) aimed at overhauling regulations to help providers stay open and expand. While there’s overlap, the bills differ on key points.

House Bill 412 proposes:

• Allowing experienced staff to substitute formal credentials.

• Letting highly qualified teachers oversee two classrooms (instead of one).

• Commissioning a study on decoupling subsidy rates from quality ratings.

The Senate bill, meanwhile, takes a simpler route — omitting the dual-classroom rule and the quality-rating subsidy study — but includes a budget increase for child care subsidies (passed April 16) to support low-income families.

But these legislative tweaks raise some tough questions.

Quality vs. Accessibility: A Balancing Act

Currently, North Carolina rates child care centers from 1 to 5 stars. The higher the star rating, the more funding the center receives.

The House bill considers separating those ratings from payment levels — a controversial move.

Iheoma Iruka, a maternal child health professor at UNC-Chapel Hill, says that could dismantle a system that’s helped NC lead the way in early education.

“If you remove the incentive for quality,” she said, “you remove the reason for centers to meet those standards.”

Brooks, whose center holds a 5-star rating, agrees. “The rating system works when you can pay good teachers,” she said. “Right now, that money just isn’t there.”

Snuggs added: “The point of higher rates is to support higher wages — take that away, and quality suffers.”

Can Experience Replace a Credential?

Another flashpoint: workforce qualifications. Both bills propose that five years of child care experience in a licensed facility be considered equivalent to the North Carolina Early Childhood Credential.

Supporters say this practical approach could ease the hiring crisis.

Andrew Weathersbee, who owns Providence Preparatory School in Charlotte, supports the idea. “I back my teachers going for formal education, but we need real-world solutions too.”

However, both Iruka and Snuggs caution that not all experience is equal. Experience in low-quality centers, they argue, may not ensure competency.

More Children, Same Ratio — Good or Bad Idea?

Here’s another big shift: both bills propose increasing maximum group sizes for infants and toddlers.

• For 0–12 months: from 10 to 15 children

• For 12–24 months: from 12 to 18 children

The staff-to-child ratio would remain the same, which lawmakers say protects quality. But early childhood experts say otherwise.

“You can’t supervise what you don’t see,” Snuggs said, emphasizing that simply adding more children could overwhelm teachers and lower care standards.

Iruka echoed this concern, warning that larger groups could increase the risk of illness and overstimulation, especially for infants.

What’s Next?

While lawmakers aim to stabilize the industry by offering flexibility, providers warn that without sustained investment and a commitment to quality, these changes may do more harm than good.

The proposed reforms could ease financial stress for some, but critics argue they might shift the burden onto teachers and families — the very people the child care system is supposed to support.

As both bills advance and the funding picture remains cloudy, the future of child care in North Carolina hangs in the balance.

For many, this isn’t just about survival — it’s about what kind of care system we want to build for our youngest generation.

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