Why Vermont’s child care investment is paying off

February 3, 2026  |  By Reps. Rey Garofano and Theresa Wood

For decades, Vermont families struggled with a child care system that was expensive, fragile, and out of reach for far too many working parents. At the same time, child care providers operated on razor-thin margins, with unpredictable revenue and chronic workforce shortages.

Act 76, Vermont’s historic child care law, was a deliberate decision to change that reality and to recognize child care as essential public infrastructure rather than a private burden borne by families alone. New statewide data show that this investment is already delivering meaningful results for families, providers, and Vermont’s economy.

According to the January 2026 Act 76 Monitoring Report from Building Bright Futures, 2025 was the first full year that Act 76 operated at scale. During that year, Vermont’s Child Care Financial Assistance Program expanded to serve nearly 50% more families than before Act 76, with close to 12,000 children in almost 10,000 families receiving support statewide.

Awareness of and participation in the Child Care Financial Assistance Program are higher than at any point in the program’s history. Families consistently describe lower copays as a game-changer that reduces financial stress and allows parents to stay in the workforce, increase hours, or accept new employment opportunities.

This is exactly what Act 76 was designed to do. It shifted Vermont from a child care system built for limited reach to one that functions as a broad-based public benefit. That shift matters not only for families, but for the state as a whole, and to Vermont’s business community.

Act 76 has also strengthened the financial stability of child care programs themselves. In 2025, Vermont distributed $2.7 million in Quality and Capacity Incentive Payments to 802 child care, preschool, and afterschool programs across the state. The Building Bright Futures report documents that more predictable revenue has allowed many providers to raise wages, improve benefits, reduce turnover, and invest in staffing and quality improvements. 

For family child care homes, this stability has been particularly meaningful, with some providers reporting they can save for retirement for the first time. These programs are small businesses that operate in every corner of Vermont, including rural communities where other employers may be limited. 

Act 76 is also being financed responsibly. The Child Care Contribution payroll tax is now fully implemented and operating predictably. According to the report, revenue collection has stabilized, and CCFAP spending is tracking closely to budgeted levels, with approximately 99 percent utilization midway through the current fiscal year. This reflects strong demand paired with careful fiscal stewardship. It also underscores that Act 76 is not an open-ended promise, but a thoughtfully designed system grounded in data and ongoing monitoring.

Importantly, the report makes clear that Act 76 is functioning as intended, even as challenges remain. Workforce shortages remain the single largest barrier to expanding child care supply, particularly for infant and toddler care. Administrative complexity continues to create friction for families and providers. Access remains uneven across regions, especially in rural areas where transportation and long travel distances compound the problem. These challenges are real, but they are not evidence of failure. They are the predictable growing pains of scaling a public system in a field that was underbuilt and underfunded for decades.

The economic impacts of Act 76 extend beyond the child care sector itself. Building Bright Futures has begun engaging employers across Vermont to better understand how child care access affects recruitment, retention, and workforce stability. While this employer-focused work is still in its early stages, the report notes a consistent theme. When child care is more affordable and reliable, employers benefit from a more stable workforce. Parents are better able to show up for work, maintain consistent schedules, and remain attached to the labor market. In a state facing persistent workforce shortages, this matters.

In this way, Act 76 should be understood as economic policy as much as family policy. Child care access supports labor force participation, reduces employee turnover, and strengthens Vermont’s overall economic competitiveness. At the same time, stabilizing child care businesses supports local economies and keeps dollars circulating in communities across the state. This is what it means to invest in economic infrastructure.

The Building Bright Futures report also highlights the importance of continuous improvement. Vermont is using data, lived experience, and cross-agency collaboration to refine implementation in real time. Adjustments to enrollment-based reimbursement, clearer guidance for families navigating multiple systems, and ongoing work to address fingerprinting and background check delays all reflect a commitment to improving the system over time. Act 76 was never intended to be a one-time fix. It is a long-term system shift that requires sustained attention.

We are proud that Vermont chose to lead. Act 76 reflects our values of fairness, opportunity, and shared responsibility. It acknowledges that child care providers deserve stability and respect. And it demonstrates that public investments, when carefully designed and closely monitored, can deliver real results.

The data tell a clear story. Act 76 is improving affordability for families, stabilizing child care programs, and supporting Vermont’s workforce and economy. There is more work ahead, but the foundation is strong. When we invest together in systems that matter, Vermont works better for everyone.

Rep. Rey Garofano, D-Essex, is vice chair of the Vermont House Human Services Committee. Rep. Theresa Wood, D-Waterbury, chairs the House Human Services Committee.