From left: Shelli Henehan and Democratic Rep. Denise Garner, both members of the Arkansas Early Childhood Commission, listen to Republican Rep. Julie Mayberry during a work session to discuss child care funding on Oct. 15, 2025 in Little Rock. (Tess Vrbin/Arkansas Advocate)
Arkansas’ child care system needs additional funding to avoid widespread closures and layoffs due to changes to the state’s financial aid program for low-income families, providers told the state Early Childhood Commission during a Wednesday work session.
A survey of providers found that about a quarter of them, spread out among 50 of Arkansas’ 75 counties, expect 400 layoffs by November, said Shahid Sheikh, owner of four Northwest Arkansas child care centers. Sheikh was among several child care providers and experts invited to the commission’s work session for discussion.Eighty of the 250 facilities who responded to the survey are likely to close in the next 60 days, and many of them are located in low-income communities where child care is already scarce, Sheikh said.
Sheikh and other child care providers have expressed concern in recent weeks about the Arkansas Department of Education’s proposed changes to the School Readiness Assistance Program. In September, the agency announced a new reimbursement structure and a sliding-scale copayment structure, with the goal of reducing the four-digit child care waitlist and making the program more financially sustainable.
Child care advocates said the changes would create barriers to access for families in need. The education department responded to the pushback by delaying cuts to providers’ reimbursement rates until Nov. 1, but moved forward with participant co-payments on Oct. 1 as planned, according to the Arkansas Democrat–Gazette.The reimbursement rate cuts are expected to cost providers statewide $727,000 per week, according to the survey. That adds up to $37.8 million in lost revenue for local economies, Sheikh told the commission Wednesday.“We stand to lose more money by not investing in [child care] than we do by investing, so while this may be a budget problem right now, in a year’s time, it’s going to be a budget disaster for the state,” he said.
Education department officials are “going through our budget with a fine-toothed comb” in search of solutions, said Stacy Smith, deputy commissioner for the department’s Division of Elementary and Secondary Education.
Families who are working or enrolled in school with income at or below the state poverty level will not pay a copayment for children before kindergarten, and families above the poverty level will pay a copay scaled to income and the age of the child, according to ADE.
Providers said their concerns about the copays being too expensive have come true.“The amount that we’re asking families to pay is unreasonable for most of them, especially as such a quick ask,” said Jenny Castillo, who owns five Spanish language-immersion child care centers in Northwest Arkansas. “For it to be so fast, they have no time to prepare, to pivot.”Castillo said she hopes the state finds a way to ensure that families pay no more than 7% of their household income for child care, a national recommendation.
The increased copayments as of Oct. 1 have already forced some Arkansas child care centers to close because parents could not afford to pay anymore, Sheikh said.
“We’ve already heard from some who have essentially [said], ‘It’s easier for me to quit my job and get on SNAP and have food stamps cover me than for me to go and work’” to try to afford child care, Sheikh said.While this may be a budget problem right now, in a year’s time, it’s going to be a budget disaster for the state.
– Shahid Sheikh, owner of four Northwest Arkansas child care centers
The School Readiness Assistance Program is funded by the federal Child Care and Development Fund. Education department officials are currently unable to seek help from the federal government regarding the program because of the ongoing government shutdown, Smith and Education Secretary Jacob Oliva both said.
The shutdown might force the department’s Office of Early Childhood to lay off federally-funded staff, Smith said.The state Legislature will meet in April for its regularly scheduled fiscal session, but child care providers said Wednesday that they can’t wait that long for financial aid.
State Reps. Denise Garner, D-Fayetteville, and Julie Mayberry, R-Hensley, were the only lawmakers who participated in Wednesday’s discussion. Rep. Kendra Moore, R-Lincoln, and Sen. Jane English, R-North Little Rock, were also present at the work session.
Mayberry said she appreciated the input from the providers, particularly the data, and said a special legislative session might be necessary to address the problems presented. Gov. Sarah Huckabee Sanders is responsible for calling a special session, and Mayberry urged providers and the education department to involve Sanders’ office in discussions of next steps.
Garner, a member of the commission, said she hopes the discussion will soon create “action items.” “The things we need to know as legislators are what pots of money we actually have…how much money is that and where to pull money from the rest of the state budget and put it into early childhood [education],” Garner said.
The commission is scheduled to meet again at 10 a.m. Tuesday.