Child care payment changes could stabilize a sector in crisis

Currently, the state of Ohio reimburses child care providers for some of the cost of caring for children whose families qualify for PFCC. These payments are based on attendance and generally made two weeks after the care was provided.

In the most recent state budget, Ohio legislators failed to address the ongoing child care crisis in our state. However, federal rule changes forced them to make some improvements to the way PFCC payments are made.

In 2024,[1] the federal government required that all states make PFCC payments prospective and enrollment-based, which the Administration for Children and Families (ACF) says “aligns with generally accepted payment practices in the private market.”[2] Because the majority of Ohio’s child care funding comes from the federal government, our legislators were compelled to follow these rules. They allocated $89 million in the state budget to support these reforms,[3] but they dragged their feet, promising to implement changes just before the federal deadline in July 2026.

In August, the Trump administration extended that deadline an additional two years.[4] By December, Ohio legislators had passed a law to delay the state’s implementation until July 9, 2028.[5]

On January 5th, the Administration for Children and Families introduced a new rule rescinding several prior child care funding rules, including the requirement to adopt an enrollment-based payment system.[6] Enrollment-based payment is not paying for empty child care spots, even according to this new federal rule proposal,[7] which says “Delinking payments [from attendance] is important to support providers’ fixed costs of delivering child care services and to encourage providers’ participation in CCDF.”

Allowing this change will continue the crisis in the childcare sector. You can submit a comment on this proposed rule by February 4, 2026.

Recently, unsubstantiated and easily debunked videos went viral on social media, falsely alleging widespread fraud in Minnesota’s child care subsidy system and targeting Somali business owners and kids. Copycats have attempted to do the same in Ohio.

Ohio leaders have been unequivocal: Ohio’s child care system is transparent, highly regulated and inspected, and accountable.[8] In fact, during FY 2025, DCY and JFS conducted 19,983 inspections across Ohio,[9] covering every licensed provider. These inspections are thorough and documented,[10] and reports are publicly available. Families can look up their provider’s most recent inspection using the state’s online lookup tool.[11]

Social media “investigations” are political theater, attempting to pit neighbors against each other, scapegoat immigrant communities, and distract from what’s really at stake: kids’ access to safe, quality care, and parents’ ability to work.

The Trump administration responded to — and advanced — unfounded allegations of fraud by freezing $10 billion in federal child care and other funding to California, Colorado, Illinois, Minnesota, and New York.[12] Any delays in funding would be catastrophic to a sector already in crisis.[13]