Maryland’s budget was prepared to give scholarships to 40,000 kids to help their families afford child care. But less than a month into the fiscal year, the state has already blown past that number.

Maryland’s Child Care Scholarship Program, which subsidizes the rising cost of day care to help parents rejoin the workforce, has added 18,000 kids — a 75% increase in just over a year and a half.

The Maryland General Assembly allocated a record $328.5 million for the need-based scholarships in this fiscal year’s budget, but it wasn’t enough. Last week, the Board of Public Works slashed nearly $150 million from the other parts of the budget, in part to help cover the cost of the program, which is now at 42,000 kids and counting.

“The program definitely will always need more money,” said Imani-Angela Rose, executive director of Joshua’s Place Early Learning & Enrichment Center, where most families pay through scholarships. “Parents are struggling. So anything that helps them to be able to have a place for their children to go to be safe, number one, and then to help their development and help them to grow, is always good.”

The number of families who need help paying for child care is expected to grow, thanks to a national drop in the number of providers and the rising cost of running a program. Maryland has lost 15% of its child care providers and nearly 7% of its child care slots since 2020, according to an analysis by the Local News Network. Part of the problem is that child care is expensive to provide: Children need constant, individual attention.

Maryland’s scholarship program in recent years raised the income limits for families to qualify and covers more of the cost. A family of four applying for the first time and earning up to $90,000 would be eligible for a scholarship, for example; in 2018, that number was $35,000, according to the nonprofit Maryland Family Network, which advocates for high-quality child care and early education.

Parents can now get temporary 60-day scholarships while they wait for the state to review their full application for yearlong enrollment, cutting down on wait times. And the state increased enrollment reimbursement rates for child care providers to the 70th percentile of market rate — previously the 9th — by region.

Families must pay any portion of child care tuition not covered by the scholarship directly to their provider. Rates vary widely, from an average of about $400 a week for babies and toddlers at day care centers, to about $245 a week for preschool-age kids at home-based providers, according to the Maryland Family Network.

At Joshua’s Place in Northwest Baltimore, about 98% of parents use scholarships to cover all or part of the $215-per-week tuition. Before income eligibility caps rose, that number was closer to 75-80% of parents, said Rose.

Rose said she’s looking at increasing her rates because what she currently charges “definitely doesn’t touch the true cost of care.”

“[But] I have to be cautious not to increase my price to the point where a parent that does have to pay would not be able to afford to pay,” she said.

State officials say the scholarship program is a critical investment, even though it poses a budget challenge.

“When families have access to affordable child care, they are more likely to participate in our labor force and participate in our economy,” Gov. Wes Moore said. “We cannot be a state where we’re asking people to make a choice between taking care of your children or joining the workforce.”

Maryland Comptroller Brooke Lierman said the state experienced a 4% decline in labor force participation at the onset of COVID-19. The state has not yet fully recovered, with the decline most prominent among residents who are between 25 and 44 years old, prime ages both for working and having kids.

“There is a direct correlation between the affordability and the availability of child care and parents in the workforce,” Lierman said. “If we don’t have enough affordable, available and high-quality child care options in the state of Maryland, then workers will leave the state of Maryland looking for that option.”

In addition to freeing up their parents to reenter the job market, child care is “truly the beginning of early learning and early literacy” when children can access high-quality care, said Joshua Michael, president of the State Board of Education and executive director of the Sherman Family Foundation, a financial supporter of the Banner. Investing in child care is part of the state’s strategy to improve long-term student learning outcomes, he added.

Laura Weeldreyer, the executive director of the Maryland Family Network, said she’s appreciative of Moore’s commitment to funding the scholarship program and thinks Maryland “is in the top tier of states in the country doing this work.” But she also wants to acknowledge “the federal government needs to do more. States cannot do this alone.”

“The only answer is national advocacy at this point. We need Congress to think about investing in child care more robustly than they have in the past,” Weeldreyer said. “I think there are states that want to do this right, including Maryland, and there is a limit at this moment to what states can afford.”

Kathryn Anne Edwards, a labor economist and policy researcher, agrees that investing in a scholarship program is one of the few things states can do absent federal intervention. While vouchers bring down prices for families in need, which Edwards applauds, they still only work for those who qualify and receive them. And they don’t address the fact that child care requires a lot of staff, a problem that can’t be solved by shoving more children in a room or implementing the use of AI.

Some are working on other solutions. A few Texas cities have passed property tax exemptions for land use by child care centers that could save some providers thousands. In Massachusetts, monthly stipends for child care providers are paying dividends, resulting in changes like pay increases for staff. New Mexico made early childhood education a constitutional right, like K-12 school, and funds it, in part, with oil and gas revenue.

“A parent subsidy really can’t do anything for cost. It can help families meet a price, but it doesn’t make child care more efficient or affordable to provide,” Edwards said. “It’s not going to fix a broken child care market, but it will help with the inequity that the broken market creates.”

The U.S. should stop letting the market guide the cost of care, Edwards said. States could determine the true cost of care per child by age and reimburse providers for the kids they enroll. Massachusetts is already trying something similar.

Edwards said scholarships can address “symptoms” of the market, such as kids being priced out of the system or parents having to drop out of the workforce because losing an income is more sustainable than paying for child care. “But the disease is the private provision of child care is not sustainable,” she said.