The session was led by Sen. Chuck Hall, R-Perry, and Rep. Suzanne Schreiber, D-Tulsa.
Cynthia Osborne is the executive director of the Prenatal-to-3 Policy Impact Center at Vanderbilt University. She dubbed the national childcare landscape a “market failure” because of affordability and access concerns.
“It’s when the private market simply cannot produce enough of a good at a price that consumers can afford, and that good is actually essential for the economy,” Osborne said. “Our economy is suffering, and overall, our society suffers.”
As StateImpact reported, childcare costs are soaring. Infant care at daycare centers rose 36% from 2022 to 2025, according to the Oklahoma Partnership for School Readiness, a quasi-government research and advocacy organization.
Nationally, costs are also skyrocketing. According to the nonprofit advocacy group Child Care Aware of America, the national average price of childcare shot up more than 20% from 2022 to 2025.
Depending on the county, the average weekly cost of caring for an infant at a daycare center ranges from $95 to $253, according to OPSR data. Statewide, that averages to $208 per week.
Infant care is often the most expensive because it requires significant staffing and resources.
Oklahoma ranks in the middle nationwide for infant childcare at No. 33 out of 50 states and Washington D.C. But the state ranks higher in the share of annual family income spent on childcare, at No. 21. On average, Oklahomans spend 15.4% of their income on childcare, despite the federal recommendation sitting at 7%.
In the study, Oklahoma childcare providers also said decisions DHS made have left them in a lurch.
During the pandemic, the federal government provided states with extra dollars to support families with children in childcare. One part of that funding paid for a $5-per-day, per-child “add-on” to childcare providers’ subsidy rate schedule. The program was phased out, ending for children of all ages in April.
In February, the state will change income eligibility requirements, increasing the threshold from 85% of the state median income to 55%. This means fewer families will qualify for aid.
The state has also changed the rating system used to determine provider reimbursement rates. Now, providers must be nationally accredited to get the highest ratings and highest subsidies.
Childcare providers at the study recommended increasing subsidy program funding to align with market rates.
Oklahoma conducted a market-rate survey in 2017 and 2024 — however, it did not increase its subsidy payments after 2024. The current subsidy schedule dates back to the 2017 survey.
Mac McCrory, a member of the Oklahoma Child Care Association, told lawmakers that federal COVID funding allowed DHS to “leapfrog” what should have been a standard rate increase in 2024.
“Going back to that 2024 market-rate study, where we did not see an increase in the subsidy rates, even though the study itself showed that with the $5-a-day [policy], we could still use a market rate increase to hit that 75% mark,” McCrory said. “It was a byproduct of the COVID funding and the supplementals that providers were able to use.”
Speakers also recommended revamping the state’s payment policy for child absences at daycares.
In explaining the state’s subsidy absentee policy, Avedis Foundation program director Tracy Meeuwsen called the situation it created for providers’ budgets “volatile.” Avedis Foundation is a private organization based in Shawnee supporting community wellness through investments and partnerships. DHS payments in Oklahoma are based on attendance, rather than enrollment.
“If a child is absent, there’s no revenue for that day, but it doesn’t mean that they don’t have costs for those days still,” Meeuwsen said. “The center is holding the child’s spot. It can’t fill it with another child for that date.”
According to Oklahoma’s policy, a child on subsidies can miss seven days for the provider to still receive the state’s full payment. If the child misses eight days, the provider loses the income for all eight days, rather than just the additional day over seven.
Speakers called for either a system that pays for seven missed days regardless, or a system that pays by enrollment, rather than attendance. According to DHS, there is a 50-50 split throughout the country on whether an enrollment or attendance model is used.
In 2024, the Biden administration instituted a federal rule requiring states to pay subsidies based on enrollment. Oklahoma sought a waiver for the rule’s implementation. Later, the Trump administration appealed the rule.
Meeuwsen cited an example of one childcare center that unenrolled 20 of its children on subsidies this summer to free itself of DHS’ system.
“And we have many other centers that are starting to consider that,” Meeuwsen said. “With the rising costs of everything, it’s to the point where they’re going to have to consider that, and that is going to hurt our most vulnerable families.”
She said those slots were filled by families who paid privately or through a tribal partner.
DHS Chief of Staff Katie Demuth responded to the complaints by highlighting the potential fiscal impact. She said based on the number of children currently attending childcare with the subsidy program, it would cost an additional $81 million to transition to an enrollment-based model.
“While there are many different ways that this system could be set up, and we remain open to discussing all options, this model was originally designed to balance the need to provide more stability than a solely attendance-based model, while also ensuring taxpayers are paying for a service that is actually utilized by the families in need,” Demuth said.
If the state transitioned to a model that held the seven-day absences at no-harm, it would cost $58 million for young and school-aged children. She said, regionally, Texas and Kansas pay based on an enrollment model, while Arkansas, Missouri and Colorado use an attendance model. She noted that Texas has a wait list nearing 200,000 for families to receive a childcare subsidy.
No lawmakers asked questions of the presenters.
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