For child care center owners and operators in Pennsylvania, staffing remains the single greatest barrier to operational stability. Recognizing that “child care workers are the workforce behind the workforce,” the Shapiro Administration recently announced a major proposal to bolster the industry in the 2026-27 budget.
The Proposed Investment
Governor Josh Shapiro has proposed an additional $10 million investment into the Child Care Recruitment and Retention Program. This brings the total proposed funding for the program to $35 million.
If passed, this initiative would directly impact operational bottom lines by providing significant financial incentives to staff. Specifically, the proposal aims to increase retention bonuses for workers at licensed centers participating in the federal Child Care Works (CCW) program from the current minimum of $450 to at least $630—a 40 percent increase.
Why This Matters for Operations
Staff turnover is costly, disruptive to child development, and limits the number of children a center can serve. By stabilizing the workforce, the state aims to help providers maintain consistent operations.
Key details of the broader budget proposal include:
- Targeted Bonus Increases: A 40% increase in retention bonuses for eligible CCW staff.
- Pre-K Counts Support: An additional $7.5 million designated for the Pre-K Counts program to help providers raise wages.
- Head Start Supplemental: $2 million allocated to the Head Start State Supplemental program to further stabilize the early educator workforce.
Building on Recent Success
This proposal follows a successful 2025-26 cycle where the state secured $25 million in funding. That program saw massive engagement from the industry, with over 4,300 child care providers applying for grants to support approximately 55,000 child care workers.
In addition to direct wage support, the administration has implemented several structural changes to help providers:
- Reimbursement Rate Hikes: Base reimbursement rates for CCW providers have been increased to the 75th percentile of private pay rates.
- Tax Credit Expansion: The Child and Dependent Care Enhancement Tax Credit was expanded, delivering $136.5 million to nearly 219,000 working families in 2024, which helps drive demand for your services.
- Employer Incentives: The creation of the Employer Child Care Contribution Tax Credit allows businesses to claim a 30% credit (capped at $500 per employee) for contributing to their employees’ child care costs.
What Operators Should Do Now
If you operate a licensed child care center in Pennsylvania, staying informed on these funding streams is critical for your 2026 fiscal planning.
- Review Eligibility: Ensure your center is participating in the Child Care Works (CCW) program, as most state-level retention bonuses are tied to this participation.
- Monitor the Budget: The 2026-27 budget is currently a proposal. Follow the progress of these specific line items through the Department of Human Services (DHS) newsroom.
- Utilize Official Resources: For updates on grant applications and program requirements, regularly visit www.findchildcare.pa.gov.
By leveraging these state-funded initiatives, center owners can better compete for talent in a tight labor market while ensuring their facility remains an attractive option for working families.