Raising Up Carolina: Making Childcare Work Again for North Carolina Families

North Carolina’s early child care system is in a perilous situation. Since 2019, the state has lost more than 760 licensed child care programs — a decline of roughly 13% — and officials project that number will continue to fall through 2027. At the same time, the child care subsidy waitlist has grown from 2,164 children in July 2024 to more than 15,500 children in December 2025. This report outlines a capacity-first strategy built on three integrated pillars to address the crisis.

Key Findings

The system is shrinking while demand grows. North Carolina has lost over 760 licensed child care programs since 2019. The subsidy waitlist has grown sevenfold in 18 months — from 2,164 children to more than 15,500. State officials project continued decline through 2027.

Childcare is unaffordable at any income level. The average annual cost of center-based infant care in North Carolina exceeds $12,000 per year — rivaling in-state college tuition. It consumes 11% of median income for a married-couple family and 37.5% for a single-parent family, far above the 7% federal affordability benchmark. Yet even at these prices, providers cannot cover their costs or pay competitive wages.

The workforce crisis is the capacity crisis. Compensation for early childhood educators remains significantly below market standards while turnover has reached unsustainable levels. Classrooms cannot be staffed unless educators are paid and supported in ways that make the work sustainable.

Rural and urban communities face distinct but equally severe gaps. Families in rural counties face long distances between providers and limited home-based options. Urban child care deserts persist even in densely populated areas, where high rents and workforce shortages close classrooms despite strong demand.

The April 2026 Leandro decision raises the stakes. The NC Supreme Court’s ruling shifts responsibility for the state’s constitutional obligation to provide every child a sound basic education more squarely into the legislative arena. The legislature’s willingness to treat child care as foundational to school readiness and long-term educational opportunity will determine whether North Carolina strengthens or continues to erode the infrastructure it has spent decades building.

The Path Forward: Three Pillars

Pillar I — Reimagine public and community spaces for child care. North Carolina needs a broader mixed-delivery system that includes center-based programs, licensed home-based providers, family, friend, and neighbor (FFN) care, small community sites, micro-facilities, and shared services networks. This means growing the supply of licensed family child care homes, modernizing zoning and regulatory frameworks, creating pathways for micro-facilities and neighborhood-scale sites, and building stronger shared-services infrastructure for small providers.

Pillar II — Build and sustain the early childhood workforce. The child care system cannot expand unless classrooms can be staffed. This pillar calls for reforming compensation structures, expanding Child Care WAGE$, and investing in workforce-entry pathways such as apprenticeships and Child Care Academies — the capacity-building strategies essential to expanding access for children and families.

Pillar III — Establish sustainable financing. At the center of the child care crisis is a structural mismatch between the cost of providing quality care, the wages required to sustain a professional workforce, and the amount families can realistically afford to pay. This report recommends moving toward cost-informed subsidy reimbursement, establishing a statewide subsidy reimbursement floor, activating philanthropy as catalytic capital, and treating child care financing as economic infrastructure.