DC Council Passes Budget to Restore Critical Early Childhood Funding

On Tuesday, June 23, 2026 the DC Council passed the District’s fiscal year 2027 (FY27) budget, adding critical investments to the Early Childhood Educator Pay Equity Fund and the Child Care Subsidy program.

Key Takeaways from the DC Council’s FY27 Budget Package:

• Adds $100.5 million to early childhood programs. The Council restored $61.5 million to the Pay Equity Fund and added $39 million to the Child Care Subsidy Program on top of Mayor Bowser’s proposed budget.  

• Moderately increases funding level for the Early Childhood Educator Pay Equity Fund. The budget restores funding ($61.5 million) for educator wage supplements and maintains funding ($12 million) for HealthCare4ChildCare for a total FY27 funding level of $73.5 million. This means the Council prevented what would’ve been certain and devastating pay cuts for early educators! 

• • • In between the first and second vote, the Council added an additional $1.5 million to the Pay Equity Fund to ensure that there are enough funds to compensate early educators as they earn higher degrees and as new educators join the field over the coming year. 

• Preserves access to child care subsidies. The Council added enough funding to enable the Office of the State Superintendent of Education (OSSE) to lift the current enrollment freeze and consider opening additional priority groups on the subsidy waitlist, allowing more families to access affordable child care. The Council’s funding enhancement brings the total subsidy program budget up to $153.2 million for FY27. 

• We estimate this will allow the District to support at least 8,100 children each month.  

• Long-term funding remains uncertain. Funding added to the Pay Equity Fund and the Child Care Subsidy program is for one year only. It is not slated to continue in fiscal years 2028-2030 of the District’s financial plan. The District must add revenue to its budget and get serious about identifying spending efficiencies in order to preserve critical investments in a strong early education system.  

 

Additionally, in the revised Fiscal Year 2026 budget which runs through September 30th of this year, the Council approved a $10 million enhancement to the child care subsidy program to ensure all currently enrolled families can retain services and new families can begin to receive approvals for subsidies, lifting the enrollment freeze that OSSE implemented in May.   

The child care funding wins in this budget reflect  months of advocacy from families, educators, providers, and partners across the District. The early learning community is deeply grateful to Chairman Mendelson and the overwhelming majority of Councilmembers who championed early education investments and to every member of Under 3 DC who testified, met with policymakers, sent emails, made phone calls, shared their stories, rallied, and helped elevate the importance of early childhood programs during this budget season. While it is not everything we asked for, the Council’s FY27 budget is a significant victory for early childhood education and the children, families, and workers supported by the system!  

 

What was at stake 

The DC Council intervened to avert the inevitable harm that would have come from Mayor Bowser’s catastrophic proposed FY 2027 budget. Her budget would have devastated early childhood education and care, forcing pay cuts of tens of thousands of dollars for early educators, freezing access to child care assistance for new families, reducing affordable child care coverage for families currently in the subsidy program, shuttering hundreds of early learning classrooms Districtwide, and forcing potentially thousands of parents out of the workforce. 

Specifically, Mayor Bowser’s proposed budget would have 1) eliminated educator wage supplements through the Pay Equity Fund, leaving only funding for HealthCare4ChildCare; 2) locked new, eligible families out of child care assistance that would enable them to work, attend a job training program, or pursue education; and 3) cut the reimbursement rates that providers receive for accepting child care subsidies, which are already too low and do not meet the true cost of providing care. 

 

A win for early educators

The Council reversed Mayor Bowser’s cuts and returned $61.5 million to the Early Childhood Educator Pay Equity Fund, bringing total FY27 funding up to $73.5 million – $1.5 million above the funding level provided in FY26. Use of this funding should mean*: 

• No pay cuts for early educators
• Early educators can continue to receive pay increases as they earn higher degrees
• New early educators can join the workforce and earn Pay Equity Fund wages 
• The HealthCare4ChildCare program can continue as it is operated today 

*Dependent on OSSE’s implementation of program funds

The Pay Equity Fund has transformed the early childhood workforce in DC. Since its creation, the program has increased educator compensation by an average of approximately $15,000 annually, helping ensure that early educators earn compensation that more closely reflects their skills, credentials, and the critical role they play in children’s development. The Fund has also strengthened recruitment and retention across the sector, helping child care programs attract and keep qualified educators, while improving the stability and quality of care available to children and families. Thanks to workforce growth, the Pay Equity Fund has also helped make it possible for early learning programs to expand their capacity and open new sites to serve more families across the District.¹

 

Protecting access to child care subsidies 

The Council also added significant funding to the Child Care Subsidy program, which Mayor Bowser deeply underfunded for two consecutive years (proposed budgets FY26 and FY27). Underfunding in this current year’s FY26 budget forced OSSE to freeze new enrollment into the subsidy program in May, disproportionately locking expectant parents – and other families – out of access to affordable child care they were counting on to return to school or work this year. 

Fortunately, for FY26, the Council added an additional $10 million, which the Council Chairman indicates should be sufficient to*:

•  End the current enrollment freeze
•  Allow OSSE to open additional priority categories under their waitlist policy so that more eligible working families can participate.

For FY27, the Council added $39 million, bringing total funding for the subsidy program to approximately $153.2 million. According to the Chairman’s office, this funding level should allow the District to:* 

• Operate a true waitlist – as one family leaves the program, one or more families could join the program and receive coverage
• This means more families should be able to move off the waitlist and access affordable child care in a timely manner 
  • By contrast, the Mayor’s proposed budget would have forced the subsidy program to shrink, contract to serving less than 6,000 families in FY27, denying foundational early education opportunities to an estimated 2,100 children. 

*OSSE is responsible for implementation of and use of funds for the Child Care Subsidy program, including waitlist, eligibility, and reimbursement rate policies. 

Families need child care to work, attend school, and support their families. The additional funding will help more eligible families access the financial assistance they need to afford care and enable providers to continue serving lower-income children with subsidies in their communities, ensuring they have access to safe, nurturing, high-quality early learning experiences that help them thrive.

 

The work continues

We are grateful for the Council’s significant additional investments in a year when the District saw so many devastating proposed budget cuts to programs that support vulnerable children and families.  The table below, which compares the Mayor’s proposal, Chairman Mendelson’s proposal, and Under 3 DC’s FY27 budget asks, makes it clear that we have more work to adequately fund early childhood education programs in future budget years.

Program	Under 3 Ask	Mayor’s Proposal	Chairman’s Proposal, First Reading	Gap between Chairman’s Proposal & Under 3 Ask
Child Care Subsidy program	$177.1 million	$113.9 million	$153.2 million	– $23.9 million
Pay Equity Fund	$94.2 million	$12 million (HealthCare4ChildCare)	$73.5 million	– $20.7 million
Total additional need		–	–	$44.6 million

 

Under 3 DC’s FY27 funding request for the Pay Equity Fund sought to return educators to the originally established salary scale (up from the pay cuts that went into effect in January 2026), which was determined to achieve parity with DCPS wages, and further sought to accommodate a long-overdue 2% cost-of-living adjustment. We remain concerned that the status quo, one-time funding continues to undervalue and signal instability to the District’s dedicated early educators.    

For the Child Care Subsidy program, questions remain about how quickly additional families and providers can enroll and what protections will be in place for families and providers if funding pressures emerge during the year. While the Council has provided additional funding to sustain current enrollment levels (roughly 8,200 children), decisions about when and how to open additional waitlist priority groups remain largely at OSSE’s discretion. 

Looking ahead to future budget cycles, we will continue advocating for: 

• Full funding for the Pay Equity Fund. Under 3 remains committed to re-establishing pay parity between DCPS teachers and early educators.

• A Child Care Subsidy program without a waitlist. Our goal remains for a subsidy system that allows all eligible families to access assistance when they need it. 

• Protection for provider reimbursement rates. Future funding shortfalls should not be addressed by reducing payments to providers and providers should be reimbursed at the true cost of care. 

• Recurring funding commitments. Long-term investments are needed to provide stability for families, educators, and providers.

We will continue working with District leaders to secure sustainable, long-term funding solutions that ensure every family can access affordable child care and every early educator receives fair compensation for the essential work they do. Beyond the budget, we will work with DC agencies to ensure that early childhood education programs are transparent, effective, low-burden for eligible families and providers, and implemented to meet the needs of young children and their families.

A final thank you to every member of the Under 3 DC coalition. Your testimony, advocacy, emails, calls, meetings, and storytelling made this victory possible. While our work is not finished, this outcome is a testament to what we can achieve when we come together on behalf of DC’s children, families, and early educators.