Illinois Action for Children Responds to Fiscal Year 2027 State Budget and Spring Legislative Recap

Today, the 104th Illinois General Assembly adjourned after passing the Fiscal Year 2027 (FY27) state budget (HB111), which includes modest increases for select early childhood programs while maintaining level funding for others. These investments are largely intended to sustain current operations and keep pace with rising costs. Beginning July 1, administration and oversight of these programs and funding will transition to the Illinois Department of Early Childhood (IDEC), which will assume responsibility for the state’s early childhood services and supports.

Illinois Action for Children (IAFC) is encouraged by the Pritzker administration and the General Assembly’s continued commitment to supporting young children and families in the FY27 state budget.

The budget includes $70 million in additional investment across two key early childhood programs: the Child Care Assistance Program (CCAP) and Early Intervention (EI). It also includes $85.8 million for operational costs for IDEC. IAFC commends these efforts to strengthen and sustain critical support for families across Illinois.

Funding for early childhood programs and services in the FY27 budget includes:

• An additional $55 million (7% increase) for the Child Care Assistance Program (CCAP) to support child care services for at least 155,000 Illinois children and provide reimbursement rate increases for home-based child care providers.
• An additional $15 million (9% increase) for Early Intervention (EI) services to help ensure more efficient and timely supports for infants and toddlers with developmental delays and disabilities.
• Continued level funding for several critical early childhood programs and initiatives, including:
  • • Smart Start Workforce Grants (SSWG), which support increased compensation and promote stability across the child care sector.
    • Home Visiting (HV) programs for families seeking support on child development, health, and well-being.
    • The Early Childhood Block Grant (ECBG), which supports preschool and infant-toddler programs across the state.
    • The Early Childhood Access Consortium for Equity (ECACE) Scholarship program, which provides scholarships for early childhood professionals currently in the field seeking to further their education and credentials.

While these investments are an important step forward, additional funding is needed to keep providing high-quality care for Illinois’ youngest learners and to ensure programs remain financially sustainable.

Although the FY27 budget includes increased funding for CCAP to support increased reimbursement rates for home-based child care providers, the state has not provided a comparable reimbursement rate increase for center-based child care programs in more than five years. During that time, center-based providers across Illinois have faced significant increases in nearly every major operating expense, including insurance premiums, food and classroom materials, utilities, and rent. Over the past four years, many of these costs have risen between 55% and 175%, placing tremendous financial strain on providers already operating on thin margins.

Without increased CCAP reimbursement rates for center-based programs, many child care providers will continue to face difficult decisions that could lead to classroom closures, reduced capacity, and increased workforce turnover. Sustained investment is critical to preserving access to affordable, high-quality child care for Illinois families.

In addition to increasing reimbursement rates for center-based programs, Illinois must continue investing in the early childhood workforce through the SSWG grants.

While the FY27 budget maintains level funding for the program, flat funding risks slowing the progress the state has made over the past three years since the creation of SSWG grants. These grants have played a critical role in helping child care providers raise wages, stabilize operations, and recruit and retain qualified early childhood educators.

Without additional investment, many providers will struggle to sustain competitive wages and benefits for their staff, making it increasingly difficult to recruit and retain high-quality educators. Some programs may even be forced to reduce salaries or scale back staffing supports due to ongoing financial pressures. At a time when child care providers are already navigating significant administrative and operational challenges, they should not also have to shoulder the burden of determining how to maintain a stable workforce without adequate state support.

Despite a challenging fiscal year and growing uncertainty surrounding federal funding for early childhood programs, the FY27 budget demonstrates the Pritzker administration and the General Assembly’s continued commitment to Illinois’ children and families. As federal funding cuts place additional pressure on states to sustain critical services, it is more important than ever for Illinois to continue strengthening its early childhood system through stable and long-term state investments.

Together, we can ensure all children in Illinois have access to affordable, high-quality early childhood education and care, while also supporting the workforce and providers who make these services possible. Continued investment in early childhood is an investment in Illinois’ families, communities, and future economic success.