OAK’s Response to “Free” Childcare in New Mexico

Date: October 9, 2025

To: Early Childhood Education and Care Department (ECECD)

Re: Public Comment on Proposed Amendments to 8.9.3 NMAC (Child Care Assistance)

 

Dear Secretary and ECECD Rulemaking Staff:

 

I write to urge ECECD to pause the current 8.9.3 NMAC rulemaking and return to the drawing board with

a transparent, data-driven process that directly involves legislative appropriators, employers, providers

across the mixed-delivery system, parents, tribes and pueblos, and national accreditation bodies.

 

Summary of requests

 

Withdraw and reissue a revised proposal after:

A full fiscal impact analysis that accounts for wage compaction, capital and capacity costs, waitlist

dynamics, and churn on TANF and related programs.

A legal review that confirms the rule does not obligate future budget commitments, expand beyond

statutory authority, or conflict with CCDF parental-choice requirements.

Formal consultation with legislative appropriators and the Legislative Finance Committee (LFC), plus a

provider/parent advisory workgroup to co-design feasible implementation.

A coordination plan to leverage federal and state tax incentives (for parents, employers, and donors)

and use state assistance as last-dollar support to fill remaining gaps.

A clear implementation roadmap with phased timelines, safe harbors, and non-punitive transition

supports.

Legal and constitutional concerns: appropriations are a legislative power, and rules must fit within

statute

Separation of powers. The New Mexico Constitution vests appropriations authority in the Legislature;

the executive cannot bind future appropriations through rule. See N.M. Const. art. III, §1 (separation of

powers) and art. IV (appropriations framework). The State Budget framework administered through DFA

 

8.9.3 NMAC, 8.9.4 NMAC, and 8.9.5 NMAC Public Comment

Opportunity for All Kids NM, pg. 1 of 5

 

likewise requires agencies to stay within appropriations enacted by law and not obligate future-year

funding without legislative authorization.

Enabling authority. ECECD’s rulemaking authority flows from the Early Childhood Education and Care

Department Act (NMSA 1978, Chapter 9, Article 29) and related program statutes, not from a general

power to commit future funding or reallocate fiscal risk to later budgets. Substantive policy shifts with

large, recurring fiscal effects should be set in statute and appropriations, not locked in by regulation.

State Rules Act and small business impacts. The State Rules Act (NMSA 1978, §§14-4-1 to -11) and the

Small Business Regulatory Relief Act (§§14-4A-1 et seq.) call for transparent justification and regulatory

flexibility. For a rule with sizable impacts on small providers, ECECD should publish a clear statement of

reasons, alternatives considered, cost estimates, and mitigation options for small entities.

 

Requested actions

 

Publish a legal memorandum mapping each major rule change to its specific statutory authority,

identifying where legislative action—not rulemaking—is required.

Confer with the Legislature’s appropriations leadership and LFC before finalizing any provisions that

have multiyear budget impacts or create entitlements.

 

2. Fiscal and operational realism: account for total cost of implementation

Wage compaction. Raising pay floors without modeling the compression effects on lead teachers,

directors, and support roles underestimates the true payroll and benefit costs providers must bear to

comply.

 

Capital and capacity. Expanding access while raising standards requires space, safety upgrades,

materials, transportation, and workforce pipelines. Those are capital- and time-intensive. Regulations

should be paired with capital grants, facility financing, and phased timelines, not immediate mandates

providers cannot meet.

 

Supply and waitlists. Expanding eligibility and removing copays without commensurate supply growth

risks longer waitlists, churn, and longer durations on TANF and SNAP E&T. A credible forecast must

include supply elasticity, time-to-open for new classrooms, and the effect on family economic mobility

metrics.

 

Sustainability beyond one-time funds. If assumptions rely on expiring federal relief or other

nonrecurring funds, the rule should not normalize ongoing obligations that outlive the funding. The LFC

has repeatedly cautioned agencies statewide about this risk in the post-ARPA environment.

 

Requested actions

 

Publish a full fiscal impact report: multiyear state cost, provider cost model (including payroll

taxes/benefits/compaction), and demand-supply projections by county and age band.

 

8.9.3 NMAC, 8.9.4 NMAC, and 8.9.5 NMAC Public Comment

Opportunity for All Kids NM, pg. 2 of 5

 

Phase implementation with measurable triggers tied to available appropriations and demonstrated

capacity growth, not hard dates divorced from resource realities.

 

3. Mixed-delivery and parental choice: align with CCDF and avoid prescriptive micromanagement

Federal CCDF emphasizes parental choice and a robust mixed-delivery system (45 C.F.R. Part 98,

including §§98.1, 98.12, 98.30). Overly prescriptive operational or curricular mandates—especially those

that go beyond health and safety or duplicate/conflict with national accreditation—discourage

participation, reduce supply, and contradict the federal framework.

 

Respect for national accreditation. Programs accredited by NAEYC, Montessori, Head Start/EHS, and

others already meet rigorous, research-based standards. State rules should align to and recognize these

frameworks, not supplant program missions or impose duplicative micromanagement.

 

Requested actions

 

Remove or revise provisions that dictate program philosophy, staffing structures, or practices beyond

health, safety, and accountability for outcomes.

Offer streamlined compliance pathways or presumptive eligibility for nationally accredited programs.

 

4. Copays and tax-credit coordination: use state funds to fill gaps, stretch dollars, and support equity

Zero-copay policies for broad income bands can crowd out other resources and reduce the total funding

available for the system. Parents may be eligible for the federal Child and Dependent Care Tax Credit

(IRC §21), employer-supported dependent care benefits (IRC §129), and the federal business credit for

employer-provided child care (IRC §45F). New Mexico also provides state-level tax relief tied to child and

dependent care. Employers and donors can and should be part of the financing solution.

 

A last-dollar design—where available tax benefits and employer contributions are applied first, and state

assistance fills the remaining gap—can preserve affordability for families while stretching limited

appropriations to serve more children, especially infants and toddlers where costs are highest. Targeted

copays for higher income bands can be designed to be modest, predictable, and equity-sensitive without

creating barriers.

 

Requested actions

 

Publish a coordination plan that explains how state assistance will interface with federal/state tax

credits and employer contributions so families and providers maximize total available funding.

Consider a sliding-scale or tiered copay for higher-income bands, with exemptions for very low-income

families, families experiencing homelessness, foster/kinship placements, infants/toddlers, and special

circumstances.

 

8.9.3 NMAC, 8.9.4 NMAC, and 8.9.5 NMAC Public Comment

Opportunity for All Kids NM, pg. 3 of 55.

 

Protecting what works in New Mexico: New Mexico has become a nationally recognized leader for bold early childhood policies, including

expanded eligibility and improved provider rates. That progress rests on a vibrant mixed-delivery system

and strong partnerships with providers and communities. Sweeping rule changes that centralize control

and prescribe minutiae risk undermining that success and deterring provider participation—especially in

rural and tribal communities.

 

Families value clear, honest communication. Messaging “free access” without explaining interactions

with tax benefits, employer supports, or program trade-offs erodes trust. Transparency sustains public

support.

 

Requested actions

 

Publish a side-by-side matrix of each proposed change (all 34), the statutory basis, the theory of change,

the estimated cost, expected benefits, metrics for success, and provider/parent feedback.

Commit to annual public reporting on access, affordability, quality, workforce compensation (and

compaction), provider participation rates, waitlists, and child/family outcomes.

 

6. Process and consultation

The State-Tribal Collaboration Act (NMSA 1978, §§11-18-1 to -7) calls for meaningful engagement with

tribes and pueblos. Likewise, small businesses and nonprofits in the mixed-delivery system must have a

seat at the table early enough to shape feasible rules.

For a rule of this breadth, a formal working group co-chaired with legislative appropriators and inclusive

of providers, parents, employers, and national experts would improve the end product and reduce

costly course corrections.

 

Requested actions

 

Establish a time-limited stakeholder working group to redesign the proposal and report back with

consensus recommendations and dissenting views.

Provide at least one additional hearing cycle with draft redlines available well in advance.

 

Conclusion

 

New Mexico’s families and providers deserve rules that are legally sound, fiscally sustainable,

operationally feasible, and faithful to CCDF’s core commitments to parental choice and mixed delivery.

The current proposal risks committing future budgets by regulation, underestimates true

 

8.9.3 NMAC, 8.9.4 NMAC, and 8.9.5 NMAC Public Comment

Opportunity for All Kids NM, pg. 4 of 5

 

implementation costs (wage compaction, capital, capacity), and may unintentionally narrow parental

choice and erode provider participation, including among nationally accredited programs.

Please withdraw and reissue a revised proposal after completing the legal, fiscal, and stakeholder steps

outlined above. In the interim, continue what is working well, protect the mixed-delivery model, and

design copay and funding coordination policies that leverage tax credits and employer/donor

participation so the state can fill gaps and serve more children sustainably.

Thank you for your consideration and for your commitment to New Mexico’s youngest learners and

their families.

 

Sincerely,

Marina Herrera

Opportunity for All Kids NM, a project of the Rio Grande Foundation

oaknm@riograndefoundation.org

400 Gold Ave SW, Suite 909, Albuquerque NM 87102

 

Select references for the record (non-exhaustive):

Early Childhood Education and Care Department Act, NMSA 1978, Chapter 9, Article 29 (agency

purposes and rulemaking authority).

State Rules Act, NMSA 1978, §§14-4-1 to -11 (rulemaking procedures and statements of reasons).

Small Business Regulatory Relief Act, NMSA 1978, §§14-4A-1 et seq. (regulatory flexibility analysis).

New Mexico Constitution, art. III, §1 (separation of powers); art. IV (appropriations framework).

State-Tribal Collaboration Act, NMSA 1978, §§11-18-1 to -7 (consultation).

Federal CCDF regulations, 45 C.F.R. Part 98 (parental choice, equal access, mixed delivery).

Internal Revenue Code: §21 (Child and Dependent Care Tax Credit), §129 (Dependent Care Assistance

Programs), §45F (Employer-Provided Child Care Credit).

Legislative Finance Committee briefings and evaluations regarding sustainability of post-ARPA

expansions (general reference to LFC advisories on recurring vs. nonrecurring funds).

8.9.3 NMAC, 8.9.4 NMAC, and 8.9.5 NMAC Public Comment

Opportunity for All Kids NM, pg. 5 of 5