Virginia Can’t Subsidize Its Way to Affordable Childcare

Virginia Gov. Abigail Spanberger vowed to make affordability her focus. But her latest childcare initiative risks moving costs in the opposite direction — and as a mother in a dual-working household who recently welcomed a new child, I have a personal stake in getting this right.

Governor Spanberger signed into law the Employee Childcare Assistance Program to provide state matching funds for employer contributions toward employees’ childcare costs. She then signed a separate bill creating a childcare access calculation to estimate the annual state funding needed to support the new system.

The problem with childcare is not a lack of state intervention. It is, if anything, too much. Childcare is one of the most regulated services in modern American life. I’ve seen it up close.

At one point, the small in-home daycare that looked after one of my children was cited for failing to include a child’s last name on a milk bottle, writing only the first name. The child in question had a rare first name (imagine something along the lines of Xanthippe) that no other child in the daycare — or perhaps in all of Virginia — shared. In context, following the rule was less of a safeguard than an exercise in box-checking.

That’s the sort of hair-splitting regulation daycares are saddled with. But no lawmaker wants to be on record for “making daycares less safe.” Instead, they opt to merely throw taxpayer dollars at the problem of high childcare costs. Pumping in money without cutting regulations or barriers to entry risks higher childcare prices for working Virginia parents.

This, sadly, seems to be a popular approach these days. From Zohran Mamdani advancing taxpayer-funded “free” childcare in New York City to Alexandria Ocasio-Cortez advocating a Universal Childcare Bill, there is no shortage of enthusiasm for dispensing tax dollars as the ultimate solution to high childcare costs. Hillary Clinton’s recent New York Times essay on “how to fix affordability” exemplifies this mindset.

And it’s not just Democrats: several states, including red and purple ones, have rolled out “Tri-Share” childcare cost-sharing programs that, while certainly cheaper than universal childcare, still rely on public funds.

The playbook goes like this: promise affordability, enact flashy but ultimately ineffective subsidies, and then hope the voters don’t notice that nothing has been achieved.

But voters aren’t blind. If Spanberger wants to improve her lackluster approval numbers and actually deliver on affordability, she would be well advised to look at other states’ track record in subsidizing childcare without attendant reform.

Consider Michigan. Five years into the state’s failing $3.4 million “Tri-Share” childcare program, the state’s legislators are considering yet more subsidies to “tackle Michigan’s childcare crisis.” Michigan’s program has sparked criticism for both failing to increase the supply of care and tying childcare benefits to one’s employer (just as Virginia’s new program would do). If you want to know how government meddling tying a particular service to employment works out, just look at how tying healthcare benefits to employment has contributed to soaring healthcare costs.

Subsidies don’t work. And even minor regulations can combine to create real consequences for affordability.

Such requirements, like the overly specific bottle-labeling rule, might individually sound reasonable. Collectively, they become a dense web of compliance obligations that providers must manage: death by a thousand cuts.

Some regulations are especially damaging. Zoning rules can restrict home-based daycares, staff-to-child ratios cap how many children each worker can supervise, and licensing and education requirements limit the number of available caregivers. Together, these policies constrain childcare supply, raising costs and making affordable care harder for parents to access. Research suggests that requiring lead teachers to have a high school diploma may increase infant childcare costs by as much as 46%.

Virginia ranks 24th among the states in terms of the burden of its childcare regulations. Its ranking is lowered by unusually onerous child-to-staff ratio rules and education requirements, areas in which the state ranks 38th and 36th, respectively. Idaho, which ranks first in childcare freedom, has much lower infant and under-five child mortality rates than Virginia, showing that a less restrictive regulatory approach can coexist with strong child safety outcomes. Childcare in Idaho is also significantly more affordable than childcare in Virginia: there, childcare consumes a much smaller share of the median income for a single parent.

It’s further proof that real change isn’t going to come from piling on subsidies, but unleashing supply, and that it can be done without compromising children’s safety. If Governor Spanberger and Virginia lawmakers are truly serious about making childcare affordable, they need to stop skirting what drives the problem and go straight at it: cut the red tape.