SANTA FE — A year after New Mexico launched free childcare for all families, Dakota Rivera still can’t find a place to send her kids.
The mom of two was ecstatic when the state’s Democratic governor, Michelle Lujan Grisham, announced last September that New Mexico would expand its daycare assistance program to any family who wanted it.
But Rivera lives in a city with an acute shortage of childcare centers. She still spends her days piecing together care with help from family members, canvassing social media, and searching for babysitters.
She’s on 10 different waiting lists.
“I think the systems that they put in are great, sure, but it’s just not there yet,” Rivera said, as she tried to answer work emails while holding her 8-month-old daughter, who was cooing and waving a plastic giraffe. “In five years, maybe. For parents trying to do it now, it’s impossible.”
When Lujan Grisham first announced the program in a state with a majority-female legislature, it was widely praised as a historic step to address an issue that consumes the lives of parents everywhere — and their incomes. Costs for caring for an infant can often exceed a year’s rent, according to the U.S. Department of Labor.
But the groundbreaking program, in part funded by the state’s sizable oil and gas revenue, has had a rocky debut.
The number of children who have enrolled has skyrocketed, far outpacing the capacity of daycare centers in the state. Lujan Grisham has had to grapple with legal challenges, including a whistleblower case from the program’s chief financial officer, who says she was fired after flagging an $83 million budget deficit.
Critics have raised concerns that annual costs could balloon to more than $800 million — nearly $400 million more than when the program debuted. State legislative analysts have also found that newly eligible, higher-income families may be squeezing out some of the lowest-income recipients. The state’s GOP leaders dubbed the program “Nannies for Millionaires.”
The stakes could not be higher as more Americans say raising children is too expensive and as political leaders look to New Mexico as they try to address overwhelming childcare needs. Vermont and Connecticut already have smaller-scale programs, and New York Mayor Zohran Mamdani (D) is rolling out free daycare for thousands of the city’s 2-year-olds – a move that has also had a bumpy start.
Sara Mickelson, an early-childhood policy expert and former deputy Cabinet secretary for New Mexico’s Early Childhood Education and Care Department (ECECD), said the state got two big things right when rolling out its plan: the money and the vision. But a subsidy doesn’t help parents if there is no program to take it, she said.
“Families there are still calling around and finding no openings,” she said.
Lujan Grisham has acknowledged the challenges, telling MSNBC, “We’re building a rocket ship as we fly it.” The governor said in an interview with the Washington Post that she sees the plan as a “game changer” for her state and a blueprint for the rest of America.
She said the program would need more than $1 billion from the state’s early-childhood fund over the next five years, $300 million more than the legislature initially allocated.
“No one said it was an inexpensive enterprise, and likely it shouldn’t be,” she said. “It should be something that invests in child well-being and development, and that’s what we’re doing.”
A report Tuesday from ECECD touted its successes, citing “dramatic gains” in childcare enrollment, growth in higher-quality care and wages for workers topping $19 an hour, $3 more than the national median.
“We’ve stabilized and really strengthened the childcare sector in New Mexico in ways that are critical. It’s critical that families have choices, and these choices reflect the kind of care they need,” said Elizabeth Groginsky, the ECECD cabinet secretary. But, she said, “there’s more work to be done.”
‘This felt too good to be true’
The move to universal childcare was the culmination of a decadelong journey for advocates in New Mexico, a poor, majority-minority state of 2 million whose fourth-graders rank last in both reading and math, according to the biennial National Assessment of Educational Progress, the “nation’s report card.”
In 2020, the state legislature created a trust fund with about $300 million in oil and gas revenue to support early-childhood education and care, a pot that has since ballooned to about $11 billion.
New Mexico expanded income limits for the childcare assistance program three times. In 2022, more middle-class families became eligible in a change that allowed 80% of families in the state to participate.
Last September, Lujan Grisham took the final step, announcing that New Mexico would be the first to open its subsidized daycare to any family, a move estimated to save families $13,000 a year per child.
“That was always the vision,” she said at the time. “It took us this long to realize it, but by golly, we did.”
The announcement was met with applause and cheers, but behind the scenes, state legislators — who said they had not been informed that the program would become universal — were confounded, along with some members of the department’s own staff.
“We were all shocked,” said state Sen. George Muñoz, a Democrat and chairperson of the Senate Finance Committee. “Nobody knew about it until the day it was in the paper. All of a sudden we were all calling each other, saying, ‘Where did this come from?’ ‘Did anybody from the governor’s office talk to you about it?’ Nope, we were all in the dark.”
Word of the expansion moved quickly through the young moms groups of Santa Fe, a picturesque city that is not always easy on parents with its high cost of living and long waiting lists for daycare that can stretch for years.
Meghan Montelibano Gorman, 33, a mother of two and a marketing consultant who runs an Instagram account called “Santa Fam,” moved with her husband back to Santa Fe in 2022 from Denver to be closer to family.
She initially tried to work full time doing marketing for the Santa Fe New Mexican newspaper. But managing a full-time job and the health of her older son Charlie, who has breathing and speech issues, quickly took a toll. She recalled acing a presentation one day, but the elation she felt was sliced with guilt because she had to move Charlie’s speech therapy to do it. Even if they had been able to get a spot for daycare, it would have gobbled up most of her $35,000 annual salary.
“It was untenable,” she said. “Something had to give and it was me. I broke through that process.”
With the support of her husband, an engineer, she left her job to start her own marketing company. Creating her own flexible hours, she cared for her son and second child, Max, now 2, with help from family members.
She said her life changed for the better when they were able to enroll both kids in universal daycare this summer before Charlie moved into prekindergarten. She was able to pay off Charlie’s medical bills and triple her income.
“I was in shock this was happening,” she said of the new state program. “Happy, of course, ecstatic. I had been so in the trenches — with the scheduling, the negotiations, wiggling into shapes I didn’t fit into to make our life fit — this felt too good to be true.”
Now, she said, “I’ve reclaimed some of my joy because I’m not stressing out all the time.” She later invited program organizers to her Santa Fam parent meetup to help spread the word.
Capacity challenges
Enrollment has soared to 47,000 from 32,000 since the launch, but so have the costs.
In February, the legislature passed a bill formalizing the program. Only afterward did lawmakers learn from the Lujan Grisham administration that it already faced a $60 million budget shortfall, Muñoz said.
The legislature’s finance committee said in a report last year that the program could soon cost the state almost $849 million annually, a roughly $400 million increase from the fiscal year 2026 payouts. The governor disputed that finding, saying that the legislature’s analysts did not factor in those who would remain in private care.
Ismael Torres, the committee’s chief economist, warned in a committee hearing last month that such a spike could put the trust fund that helps pay for the program in jeopardy.
Jacob Candelaria, a former Democratic state senator, is representing two former New Mexico Early Childhood Education and Care Department staffers who said they were penalized after raising red flags about the finances. He also represented a trio of Republicans who challenged the program in court and lost.
He said Lujan Grisham, who is term-limited and will leave office this year, has embraced universal childcare as her legacy issue and a “stepping stone” to the national stage in 2028. She was eyed as a potential running mate for both former president Joe Biden and Kamala Harris, and this year successfully pushed to have New Mexico become the fourth state to vote in the 2028 presidential primary — a prime slot.
“Whatever the governor has planned for the next steps of her career, this universal childcare narrative is a central piece of it,” Candelaria said. “My clients have had the unfortunate luck of getting in the way.”
The governor said she expects the whistleblower lawsuits to fail like the GOP suit did. She also expects the issue of childcare to be a topic during the presidential debates in 2028, she said.
“You’re going to have this as a signature issue about where the country goes,” the governor said. “We need a universal approach supporting families who need care.”
Asked whether she expected to be on the presidential stage herself, she said, “I hope I’m in the ears of people on the stages, because I know we need this.”
The state has worked to address the capacity issues by offering low-interest loans to providers and attempting to speed up approvals. New Mexico was short an estimated 15,000 daycare slots when the program was launched and added 6,700 since then, an ECECD spokesperson said.
Anne Liley, the director of the First Presbyterian Child Development Center in Santa Fe, said the majority of families at the center now use the universal system instead of paying privately. Most are families with two working parents whose incomes are just above the previous limit of $106,600.
“It’s been huge for them,” she said. “When both people are working, trying to get by, and you have two children, half your income is going to childcare.”
More than 400 children are on her center’s waiting list, so she’s looking for a new space that would allow her to add about 85 infants and toddlers, a critical need. She’s still trying to find the right building, which is difficult in Santa Fe with its many historical structures, she said.
Critics have said allowing families who made more than $106,600 (for a family of three) last year to use the universal system has squeezed out low-income families who desperately need care. Sometimes, they are seasonal workers who leave and then return, only to find a wealthier family has taken their slot, analysts said.
The program serves 3,700 families who make above that amount, according to the ECECD report this month.
“If you’re making that kind of money, you really don’t need this,” said state Rep. Mark Duncan, a Republican. “Are we keeping kids who really need it out because they didn’t get there first? That’s my concern.”
Lujan Grisham said they did away with income requirements because the state is “building for an equitable system.”
“You don’t make it for poor people, you don’t make it for middle class and you don’t make it for billionaires, you make it for everybody,” she said. “We’re really leaning into the developmental well-being aspect and family stability.”
When James Krantz, a tech executive, and his wife Caitlin, who owns a marketing company, had their son a little over a year ago, they too found lengthy daycare waiting lists in Santa Fe. He said the state is now paying for their babysitter after the couple made the argument that “universal childcare” should include private in-home care.
“Doesn’t universal apply to everybody?” he asked. Having the full-time sitter has been “magical” for the couple, who can work with somebody “to closely align with how we want to raise our child.”
Muñoz said that going forward the department needs to focus its efforts on “at-risk kids, low-income kids, and special-needs children … to really deliver on the transformational investment the state is making.”
When Rivera, 29, a legal assistant, gave birth to her son three years ago, she looked at the cost of daycare and was “stunned” by the price tag — more than $20,000 a year. She and her husband, a technician, cobbled together a complicated schedule: She does her work from home, and other family members are enlisted to help. She makes an online calendar to keep everyone on task.
“I’m constantly overwhelmed by the process,” she said. “My kids are seventh-generation New Mexicans. To feel like we’re not welcome anywhere when the family has been here so long is so frustrating.”
She and her husband have completely “lost hope” on finding help for this school year and are looking to 2027 for relief. Maybe she can find a preschool for her son and a daycare for her daughter then.
