Child Care

CHILD CARE

Between 2002 and 2022, Minnesota lost 47% of its family child care capacity and Greater Minnesota lost more than 20,000 child care slots. More than 40,000 additional child care slots are needed in Greater Minnesota.

The Greater Minnesota Partnership supports investments that will stabilize the child care marketplace, expand access to child care for workers and families, keep providers in the industry, and support new providers.

PROGRAMS AND FUNDING OPPORTUNITIES

DEED Child Care Economic Development Grants

DEED initially received $13 million in the 2023 legislative session to establish grants to local communities to increase the supply of quality child care providers and support economic development. 50% of the funds must go to communities outside the metro area. More information about ongoing program funding, eligibility, and program requirements is available on the DEED website.

Rural Child Care Innovation Program

The Rural Child Care Innovation Program, managed by First Children's finance, is designed to support rural communities in a community engagement process to identify solutions to child care challenges in their area. Click here for a program activity overview.

Greater Minnesota Child Care Capacity Partnerships

DEED has ongoing partnerships with the six Minnesota Initiative Foundations to support efforts to sustain and increase access to child care in their regions. In the 23-24 biennium, each Foundation was appropriated $1.1 million.

Greater Minnesota Child Care Facility Grants

The Greater Minnesota Child Care Facility Grants program was established in 2020 and received initial one-time funding of $900,000 in the 2023 legislative session. The program will offer grants to political subdivisions and child care providers contingent on the availability and type of funding appropriated.

Child Care Assistance Program (CCAP)
Child care providers can register to participate.

Minnesota's Child Care Assistance Program supports families with low incomes by paying for child care expenses. In 2023, the maximum provider reimbursement rates were raised from 35% to 75%.

OTHER RESOURCES

REPORTS AND DATA

2025 Child Care Need Summary (First Children's Finance, 2025)

Report: Child care capacity is growing for some Ninth District states but not others (Federal Reserve Bank of Minneapolis, 2025)

Presentation: Interconnected: An update on Minnesota's child care challenges (Center for Rural Policy & Development, 2024)

Data: Minnesota Child Care Need Summary (Rural Child Care Innovation Program, 2023)

Report: Rural Child Care Solutions: From the Ground Up (Center for Rural Policy & Development, 2022)

Report: Child Care in Rural Minnesota After 2020 (Center for Rural Policy & Development, 2021)

CHILD CARE FACTS & FIGURES

Between 2002 and 2022:

Minnesota lost 50% of its family child care licenses and 47% of its family child care capacity
Greater Minnesota had a net loss of more than 20,000 child care slots, including a loss of more than 35,000 family child care slots
The Twin Cities metro area lost 2,600 child care slots

To meet child care needs, Greater Minnesota needs:

40,000 additional child care slots
54% growth in licensed child care capacity

Sources: First Children's Finance; Center for Rural Policy & Development

2025 LEGISLATIVE PRIORITIES & OUTCOMES

After significant progress in the child care space during the 2023 legislative session, GMNP priorities for 2025 centered on continued funding for key programs and ongoing efforts to support child care providers and capacity expansion. With the state facing significant budget headwinds, GMNP was focused primarily on preserving key funding and protecting programs from cuts.

Outcomes

Child Care Economic Development Grants Program - preserved $3 million base funding for both FY26-27 and FY28-29.
Office of Child Care Community Partnerships - preserved $1 million base funding for both FY26-27 and FY28-29.

RECENT CHILD CARE ACCOMPLISHMENTS

$13 million for Economic Development Child Care Grants.

These grants, awarded by the Department of Employment and Economic Development, support a wide variety of projects that work to reduce the child care shortage in our communities. At least half of these funds support projects in Greater Minnesota.

$7 million for the six Initiative Foundations to support their child care efforts.

The six Foundations serve all 80 counties in Greater Minnesota, and support their individual regions in building economic prosperity by providing grants, business loans, and programming.

An increase to the Child Care Assistance Program (CCAP) reimbursement rate from 35% to 75%.

Providers will now be reimbursed more than double the previous rate for CCAP-eligible families. This increase has a significant impact on the ability of child care providers to build sustainable and financially stable businesses.

The creation of the state Office of Child Care Community Partnerships.

An initiative of Governor Walz, this new office serves as a conduit between community leaders - local governments, businesses, and nonprofits - who are looking to support the expansion of their local childcare capacity.

LATEST UPDATES

Minneapolis Federal Reserve Bank announces Child Care Capacity report

December 11, 2025

Late last month, the Federal Reserve Bank of Minneapolis released its Child Care Capacity Report detailing the results of its child care tracking initiative. The report compares Minnesota child care capacity trends with those of other states in the Ninth District, including Northwestern Wisconsin, North Dakota, South Dakota, Montana, and the Upper Peninsula of Michigan.…

First Children’s Finance – Annual child care supply/demand gap analysis released

December 11, 2025

First Children’s Finance (FCF) recently released its annual Child Care Need Summary. A key takeaway from this year’s report is that the Greater Minnesota child care shortage remains dire, with the region being short of 42,581 child care slots as of June 2025. It is not the worst year for Greater Minnesota’s child care shortage, but these persistent gaps continue to underscore the need for lawmakers to redouble…

Funding available through Rural Child Care Innovation Program

December 4, 2025

First Children’s Finance (FCF), in partnership with the MN Department of Children, Youth, and Families (DCYF), is now accepting applications for funding from the Rural Child Care Innovation Program (RCCIP). The RCCIP program is an innovative community engagement process designed to address the challenges of child care in rural America. Child care is an economic driver for…

Child Care Economic Development Grants Announced

February 7, 2025

Congratulations to members and your partners who were awarded this second round of Child Care Economic Development Grants funding to support the startup or expansion of child care slots! I hope you saw that 84% of the funds will go to Greater Minnesota, estimated to create 1,337 child care slots. What an important reflection of…

GMNP announces 2025 policy priorities

January 12, 2025

The GMNP 2025 legislative platform renews the Partnership’s focus on ensuring Greater Minnesota communities and businesses have the resources they need to thrive. In 2025, the GMNP will work to secure funding for critical housing, workforce development, child care, and broadband programs, and push for a bonding bill that meets infrastructure needs throughout the state.…

Application open for Rural Child Care Innovation Program

October 4, 2024

Through generous funding from the MN Department of Children, Youth, and Families, First Children’s Finance is pleased to offer the Rural Child Care Innovation Program (RCCIP), an innovative community engagement process designed to address the challenges of child care in rural America. We know that child care is an economic driver for rural communities across…