The child care system in North Carolina is under mounting pressure. In a briefing to legislators on March 10, 2026, Candace Witherspoon, director of the Division of Child Development and Early Education, reported a 13% net loss of programs since July 2019 and warned of further declines. This briefing framed the problem as both a public service and an economic issue: families struggle to afford care while providers cannot cover costs, creating a cycle that threatens access for working parents.
At the heart of the challenge is a mismatch between revenue and expenses. Most program revenue comes from parent tuition, while labor represents the largest line item for providers. Witherspoon noted the average wage for child care teachers was $14.20 in 2026, a figure that falls short of a living wage and contributes to staff turnover. The state’s economy also feels the strain: a 2026 U.S. Chamber Foundation report estimated roughly $5.65 billion in annual losses tied to insufficient child care access, underscoring how early care affects workforce participation and broader economic health.
Table of Contents:
Scope of the decline and regional impacts
Numbers illustrate the trajectory: North Carolina counted 5,160 licensed programs in January 2026, down from 5,921 in July 2019. The Division projects the total may fall below 5,000 in 2027, which would mark a historic low for the state. Rural counties have suffered the steepest net losses since July 2026, amplifying disparities in access between urban and less-populated areas. As programs close or consolidate, families in affected communities face longer commutes and reduced options, which in turn constrains labor market participation and local tax revenues.
Subsidies, waitlists, and policy levers
The state’s child care subsidy program is a primary policy tool for affordability, but participation and reach have eroded. While roughly 60% of licensed programs accept subsidies, the number of children served through the subsidy program has dropped about 15% since 2019. Meanwhile, the subsidy waitlist ballooned from 2,164 children in July 2026 to 15,512 in December 2026, leaving thousands without timely access to licensed care. Witherspoon emphasized that current reimbursement rates cover less than half the true cost of care, forcing programs to make untenable financial choices.
Budget proposals and the case for a floor
Policy responses are centered on rate reforms and targeted investments. Governor Josh Stein’s budget proposal includes $20 million in recurring subsidy funding for the last quarter of fiscal year 2026-26, aligning reimbursements with a recent mandated market rate study. Advocates, however, have urged a much larger recurring investment — approximately $145 million annually — to establish a statewide subsidy floor that would set a minimum per-child payment and reduce geographic rate disparities. Proponents argue a floor would help stabilize providers and improve access for low-income working families.
Recommendations from the task force and the role of colleges
The bipartisan Task Force on Child Care and Early Education has offered a set of recommendations to rebuild the system. Key proposals include exploring a child care endowment, offering non-salary benefits to early childhood professionals, piloting subsidized or free care for teachers, and creating cohesive workforce supports that connect credentialing, compensation, and career pathways. The task force also suggested partnering with public higher education and K–12 systems to expand access for students and public employees.
Campus centers as training grounds and care providers
Community and technical colleges play a dual role: they both prepare the workforce and sometimes operate on-campus care. Davidson-Davie Community College President Jenny Varner highlighted that her institution is one of 13 out of 58 colleges hosting five-star licensed child care centers and trains about 100 students in early childhood programs. Even campus-based centers face the same fiscal pressures as community providers — including difficulty funding staff wages and benefits — which raises concerns about long-term viability despite strong local demand.
What comes next
Addressing the crisis requires sustained investment and policy alignment. Strengthening the subsidy system, adopting a statewide rate floor, and deploying targeted supports for the workforce are central to most proposals. Lawmakers, college leaders, and advocates agree that without a sustainable funding model, closures will continue, waitlists will grow, and families and employers will feel the ripple effects. The coming legislative decisions will determine whether North Carolina preserves and rebuilds accessible, high-quality early care for its communities.
