Alison Castle, a caregiver at Harmony Homes in Durham, faces a tough balancing act. As a single mother to a one-year-old, she counts herself lucky to have access to onsite child care and employee housing. Yet despite those advantages, the high costs of child care are still steadily dragging her finances into the red.
Her son’s daycare director encouraged Castle to apply for the state’s scholarship program, which expanded in early 2024 when the Department of Health and Human Services (DHHS) raised the threshold for eligibility. Whereas a family of three previously qualified with an income at or below $54,692 per year, they can now earn up to $89,000—85% of the state’s median income.
This shift could be a lifeline for families. Households with two kids may recoup the equivalent of a mortgage payment, says Jackie Cowell, who directs Early Learning NH, a nonprofit that supports and advances early learning programs such as child care, Head Start, preschool and afterschool initiatives.
While there has been an increase in children being served by the scholarship program since those changes, an estimated 55,000 children could be eligible for subsidies, according to Karen Hebert, director of the state’s Division of Economic Stability. She explains not all parents who are eligible seek the childcare subsidy. “One parent could be working and one staying home to take care of their children,” she says. “There are a lot of nuances.”
The eligibility change does seem to be having an effect. The number of children served monthly by the NH Child Care Scholarship program steadily declined from 3,439 in July 2021 to 2,803 in July 2023, according to the NH Fiscal Policy Institute. That number sharply increased since the eligibility expansion was implemented in January 2024. One key reason for low enrollment is the complex application process, says Cowell.
Six weeks after applying, Castle is still waiting for approval. Despite several rounds of submitting proof of need, she remains caught in bureaucratic red tape.
“We have many low-income families who simply find the process cumbersome,” says Jennifer Legere, founder and director of A Place to Grow. “They give up and withdraw their children from care.” Legere, who has franchised early childhood learning centers in Brentwood, Durham and Salem, as well as Wingate, North Carolina, says one of her clients applied and was told she needed more information, but then was declined because more than 30 days had passed since she opened the case. She had to reapply and again provide all the same data. She is still waiting for a response.
Recently, the DHHS created a landing page to screen families for eligibility that includes videos walking them through the steps to apply (see sidebar on page 51). Hebert says the department continues to work on improving the process. Some of the upgrades are working, she says, since the usage of the childcare scholarship program has increased 32.9% in the last year.
Getting subsidies in the hands of low-income families, however, is only one piece of the puzzle. It’s hardly a perfect solution, admits Rebecca Woitkowski, the child and family policy coordinator at New Futures, a nonprofit that seeks evidence-based solutions to NH’s health challenges, including strengthening the state’s child care workforce. She says with NH’s high cost of living, the middle class receives no help. In 2023, the average annual cost for an infant and a toddler in center-based child care in NH was $31,868, up 12.5% from 2022, when it was $28,340, according to the NH Fiscal Policy Institute.
Many families pay much more. At KinderCare in Nashua, for example, parents with an infant and a toddler are looking at a $48,464 annual bill—even after a 10% sibling discount.
State Investment
Since the onset of the pandemic in March of 2020, the state invested more than $151 million of federal relief into the child care system, with most funds sent directly to NH child care providers.
While much of those federal monies were spent, there is good news for the coming fiscal year. DHHS is requesting $15 million for its two-year budget to distribute to child care employers for professional development, sign-on incentives, tuition assistance, student loan repayment, and other approved purposes.
Woitkowski says she’d like to see the state allow companies to use business tax credits to create their own child care centers or to support the creation of child care centers at community centers. She says NH does not yet have any business tax initiatives directed to child care, but there are many states that do, noting Colorado has several models NH could look to for inspiration. Currently, NH is the only New England state not using child care tax credits for parents or employers for child care, according to the Conference Board, a global nonprofit think tank.
Some organizations like Dartmouth Health, Elliott Hospital and Harmony Homes offer onsite daycare to recruit and retain employees. Some also contribute toward expenses. For example, Dartmouth Health subsidizes up to $4,000.
However, Woitkowski notes that businesses may not be able to sustain their own child care centers and during a tough economic time, the childcare center may be the first thing a business would cut to save money.
One city in NH is tackling its child care shortage head on. The Upper Valley faces a shortage of 2,000 child care slots, according to data from the U.S. Census Bureau, state, and a Carsey School of Public Policy survey. To meet that demand, Lebanon is eyeing a bold $22 million project to create a learning center near its airport that would serve up to 200 infants, toddlers, and preschoolers. The Concord-based Boys and Girls Club of Central and Northern NH would oversee operations, following the nonprofit’s successful model at 10 other sites across the state. In addition to providing early childcare education and infant care services, the center will also offer afterschool
programming, educator training, and public amenities.
Funding will rely heavily on donations and grants. The city received a $1.6 million federal grant from U.S. Department of Housing and Urban Development (HUD). “We still have a significant shortfall to make up the rest,” says City Manager Shaun Mulholland. “Our efforts continue.”
Child Care Waiting Lists
When Tara Ryan, an executive coach, was 10 weeks pregnant, she and her husband scrambled to secure child care, paying nonrefundable fees to join waitlists at four daycares around Durham. By the time she was six months along, no center had a slot.
“Everyone’s advice was to be the squeaky wheel,” Ryan recalls. She set up monthly calendar reminders to check in with the centers, only to hear the same response each time: “We don’t know.”
After her daughter was born, Ryan prepared to go without child care for up to four months. But as the weeks wore on and a spot remained elusive, four months stretched to six. Finally, a center in nearby Madbury offered her a part-time opening. She grabbed it immediately to at least keep her place at the top of the waiting list. She hired a nanny to cover the remaining hours.
It took another seven months before she secured a full-time spot, nearly two years from the start of her search. “Everybody that I talk to is piecing things together,” she says. “Maybe two days in child care, one day with a nanny, another with grandparents, and one day of flexible work.”
Ryan is also a co-founder of the local Chamber of Mothers, a nonprofit that advocates for policies that support paid leave, affordable child care, and maternal health.
For her family, the $24,000 they spend annually on child care isn’t what she considers “affordable”—and she acknowledges for many families, it’s simply impossible. She’s fortunate, she says, to have a partner who shares in paying for the cost of child care. Too often for many women, that’s not the case.
“If you pause that career outside of your will because of factors around cost,” she says, “the long-term costs are so drastic, you know, you pay such a penalty for stepping out of the workplace.”
Across NH, much of the state is in a child care desert, according to a map compiled from Child Care Aware of NH. The COVID-19 pandemic widened that lack of access, disproportionately affecting rural communities and working mothers.
In the year leading up to March 2024, nearly 15,500 Granite Staters each month have been out of the workforce because they are caring for children, underscoring a child care crisis with ripple effects on the local economy, according to the NH Fiscal Policy Institute (NHFPI).
This trend is especially visible at the Merrimack Valley Day Care in Concord, where more than 200 children remain on the waiting list. Executive Director Marianne Barter says even if current enrollees were replaced with waitlisted children, “we would still have a waitlist afterward.”
The demand for child care eclipses availability. Between 2018 and 2022, there were approximately 45,800 licensed child care slots. In that same period, a yearly average of 54,242 children under age six lived with one or two parents in the workforce who may have needed child care. According to NHFPI data, those five years saw an annual shortage of about 8,400 slots.
Options are also dwindling. Between 2017 and 2024, NH’s licensed child care capacity increased by 5.6%, while its count of licensed providers shrank by 13%, according to the Carsey School of Public Policy at the University of NH. Home-based child care providers, which play a crucial role in caring for children under age 5, have seen their numbers decline across the country and in NH. In NH, the numbers have declined more than 20% in the last decade, according to childtrends.org.
Business leaders are taking notice. In a recent Business & Industry Association survey, close to two-thirds of survey respondents said the scarcity of affordable, quality child care hinders recruitment and retention efforts. As a result, the BIA made advocating for policies to strengthen the early childhood system one of its top workforce-related priorities in 2024.
New Laws and Programs
In 2023, the NH Senate greenlit a bill allowing family daycares with up to 12 kids, which are usually in homes, to operate in commercial spaces. In 2024 the Legislature passed the bill but took things further, ensuring communities can no longer ban home-based child care in any home type, whether single- or multifamily. The law also eliminates the need for lengthy approvals like site plan reviews or special exceptions.
Without these barriers, family child care is the easiest type to launch in the state, says Jen Legere, who helped design the bill with its primary sponsor, state Rep. Chuck Grassie, D-Rochester.
The new law is timely, as the NH Zoning Atlas, working with the state’s Community Development Finance Authority, found that 30% of NH children up to age 14 live in areas with little or no child care options.
“We’ve got to help these towns get out from underneath their not-in-my-backyard principles they’ve put in place,” Legere says. “You’ve got to stop out-zoning the ability to have child care in our communities; they’re an economic lifeblood.”
Legere was also instrumental in developing the Early Childhood Registered Apprenticeship Program, which launched last August. Together with the Community College System of NH (CCSNH), the state equips early childhood workers with entrepreneurial skills.
This is a critical boost, as most daycare directors learn on the job, often facing trial-and-error growing pains. Without managerial expertise, many struggle and are forced to close.
“We’re looking at how to support this child care desert and increase capacity across the United States and New Hampshire,” says Legere. “One of [the solutions] was to create more directors with business training.”
CCSNH also delivers tuition assistance, called ECE GAP funds, for students working on an Early Childhood (ECE) associate degree, certificate or both. Since the fall of 2023, CCSNH has doled out tuition support to nearly 1,300 students across all seven community colleges.
Strengthening the Workforce
One solution to NH’s childcare crisis? Pay the workers better. As of 2023, the median hourly wage for a childcare worker in NH was around $15.62. Barter says one of her employees could leave for a job pushing carts at Costco or stocking shelves at Target and receive better pay. “And they don’t have to keep anyone alive all day.”
It’s a troubling irony: Despite the essential nature of their work, wages for early child care professionals are inadequate.
“If you cannot get people in these jobs, staying in these jobs, making a wage they can afford their rent and to buy their kids sneakers, you’re never going to solve the child care issue,” Barter says.
Daycares are labor intensive. Employees are hands on with kids, keeping them active, engaged, and safe. Cutting corners on staff isn’t an option as licensed daycares must adhere to strict teacher-to-child ratios. It’s a costly equation: Barter, who also chairs the NH Child Care Advisory Council, estimates that 70% of her budget goes straight to salaries.
To tackle workforce challenges, neighboring Maine introduced a tiered stipend system for childcare workers, linking compensation to education and experience levels. The strategy worked: Within six months, 36% of providers advanced their qualifications, moving up the stipend ladder. Maine not only restored childcare availability to pre-pandemic levels but expanded it by nearly 5,000 spots.
Maine faces similar economic disparities, notes Barter, with lower incomes predominantly in the northern region and higher earnings concentrated in the south near urban centers. She describes Maine as the “unsung hero in early childhood education” for taking a comprehensive approach to a diverse and frustrating problem.
Vermont, meanwhile, created a new payroll tax to increase staffing and capacity at daycares. The new revenue stream funneled an additional $80 million—on top of $50 million from the general fund—into the childcare sector, enabling providers to raise wages. The state also expanded subsidy eligibility, so now a family of four earning up to $180,000 qualifies for financial help.
The good news about the child care landscape is that “everyone is talking about it,” says Barter. It’s no longer just a family dilemma—it’s a business problem, too, and that means finding solutions is on the agenda for policymakers who want to reshape both the state and national economy.
