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The Texas Workforce Commission Tuesday voted to cut 9.5% of the state’s child care scholarships, which represents approximately 14,000 seats for children.
For some regions that need to meet lower scholarship numbers in 2027, those cuts will begin by the fourth quarter of 2026, which begins in September.
Child care scholarships are a federal funding program administered by each state, similar to SNAP or Medicaid, meant to provide child care for low-income working families.
In 2025, Texas lawmakers allocated an unprecedented one-time investment of $100 million to the scholarship program that was supposed to stretch through 2026 and 2027, but the funds were quickly depleted due to inflation. The rising cost of child care without additional financial assistance from the federal government has exacerbated a growing crisis in Texas’ child care landscape, where more than 100,000 children are waiting for scholarships. Now, workforce development boards that were tasked with allocating scholarships are being asked to cut the number of children they serve in 2027.
“At a time when families are dealing with high prices on everything from groceries to child care, we’re very concerned that Texas is cutting back on the number of families who will have access to child care,” said Max Rombado, director of early learning policy at Texans Care for Children.
What this means depends on the region. Only the North Central Texas region – including Dallas and Fort Worth — will see any additional funding or growth in its scholarship program, meeting documents show. Other regions were asked to cut 80 to 1,900 seats.
“It’s unacceptable,” said state Rep. Armando Walle, a Houston-based representative who advocated for the $100 million one-time expenditure.
The TWC did not respond in time for publication.
What is subsidized child care? Why do we have it?
While it is typically more expensive in larger cities where incomes are typically higher, families across the country struggle to cover the costs regardless of where they live. Furthermore, child care is notoriously underfunded. Even some of the highest-quality centers operate on shoestring budgets, experience high turnover rates and eventually shutter when they can no longer cover their costs.
Subsidized child care, often called scholarships, are a federal program that have been around for a century and have fallen in and out of favor over the decades. States pay a percentage of the cost to run the program in order to receive federal funding. States can opt to pay more than that percentage, and some build those costs into their budgets.
These scholarships cover all or a portion of child care tuition for families who meet certain criteria.
The cost of child care and widespread child care deserts, which make child care providers largely unavailable to parents, has led parents — especially moms — to leave the workforce. In leaving the workforce they instead rely on one income and/or state-supported services to meet their needs. These subsidies allow those parents to reenter the workforce.
“They’d rather be working than having to depend on the government. This is a safety net for these families,” Walle said. “It is a lifeline to offset the high cost of goods, the high cost of gas, the high cost of rent, and groceries. It’s just cost prohibitive for a lot of families to pay for childcare on the private market.”
What do we mean by “seats?”
The number of children those scholarships cover are referred to as “seats,” which is, essentially, the number of chairs those children occupy in a child care facility on any given day.
Funding for scholarships in 2026 was meant to cover 146,736 “targeted seats” per day – the state’s goal for butts in seats. The $100 million was supposed to add 10,000 seats in Texas in 2026 and 2027. Now, the commission has had to cut the statewide target to 132,689 in 2027.
This reduction won’t be spread equally across the board. Some regions, such as those near El Paso and the Alamo, will have to reduce their targets by nearly 2,000, whereas the North Central region is actually seeing its numbers increase by more than 500.
To meet those “target seats” some districts are being asked to cull their numbers now.
“If [Texas Workforce Commission] does not modify the BCY ’26 target, the Boards will have an incentive to continue to enroll more children, in order for TWC to consider them to be Meeting Performance,” commission staff wrote in a supplemental document for today’s meeting. “This will exacerbate the impact of next year’s lower target, as the Board will enter BCY ’27 with significantly more children enrolled versus their new target.”
How will the cuts work?
Children typically phase out of the scholarship program when they turn 13, move out of the region or return to in-home care. Their scholarships then go to the next kid on the list.
Over the next few months, in most regions across the state, that won’t happen. Instead, the children on the wait list will stay on that wait list until the regions no longer exceed their 2027 target and a seat opens up.
Why is Texas cutting this program?
Some states, like Florida and New Mexico, invested significant amounts of money over the last few years and created sustainable funding mechanisms meant to stabilize these programs. Other states, like Texas, did not.
“The federal government has passed spending bills that have cut the social safety net programs across the board,” Walle said. “At the federal level, it needs to be fixed, but states can also add more money too. They can put more skin in the game. They can pull additional dollars from their own coffers. That is going to be my goal: to convince my colleagues that this is an important investment in families.”
In the 2025 legislative session, lawmakers tapped into $100 million in the unused Temporary Assistance for Needy Families funds, which is still federal cash, to supplement the state’s child care subsidy program. The goal was to provide seats for another 10,000 children who were waiting for a scholarship. That didn’t happen. Instead, it allowed regions to increase how much each scholarship paid to meet the impact of inflation on child care centers. Experts hoped it would be enough to retain child care seats.
It was not enough.
What can be done?
These cuts will go into effect over the next 18 months. Lawmakers can begin looking at ways to provide a sustainable funding mechanism for child care in the state, as other states like Florida and New Mexico have.
Walle sees some opportunity in the state’s rainy day fund, which has had a surplus the last few years. Decades ago, Texans voted to divert cash from the rainy day fund to the state highway fund and to cover the cost of infrastructure development. The state could consider something similar for child care.
“Our roads are highly used, but we also have to invest in our families, and this is a way to do it,” Walle said.
The $100 million was supported by both sides of the aisle, so this proposal could gain steam in the state house and senate in 2027. However, it has steep competition for the spotlight as Texans rage against the data center boom and demand clarification to the state’s groundwater laws.
Rombado believes it’s in Texas’ best interest to find a solution for families who are dependent on state services and could truly benefit from the scholarship.
“It’s a service that, without it, would cost the state tens of billions of dollars in economic productivity,” Rombado said.
Disclosure: Texans Care for Children has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in The Texas Tribune’s journalism. Find a complete list of them here.