How Vermont’s Act 76 Revolutionizes Child Care Funding

Vermont, a small state with big ambitions, has taken a revolutionary step in addressing its childcare crisis. Through critical legislation and community-wide collaboration, Vermont has created a sustainable funding model for childcare that could serve as a blueprint for the nation. Aly Richards, CEO of Let's Grow Kids, speaks with Aaron Merchen, Senior Director of Early Childhood Education Policy and Programs at the U.S. Chamber of Commerce Foundation to explore the key components of Vermont's child care reform, its implementation, and the lessons it offers for other states facing similar challenges in this episode of “Continuing the Conversation.” 

Act 76: A Landmark Legislation 

In 2023, Vermont passed Act 76, creating sustainable public funding for childcare through a 0.44% payroll tax. The purpose of the law is to increase employees' salaries without taking a toll on families seeking childcare.  

"We actually saw more childcare programs open than close in the first quarter of this year, for the first time since we started measuring that data six years ago,” Richards explains. 

This approach aims to make childcare more affordable, improve quality, and increase access for thousands of Vermont families. 

A Decade-Long Campaign: People, Policy, and Programs 

The success of Act 76 didn't happen overnight. Let's Grow Kids led a decade-long campaign focused on three key areas: people, policy, and programs. Richards touches on the importance of grassroots mobilization, "grassroots mobilization is critical. When you're having this level of systems transformation, you can't look back and see that you've left everyone behind." 

The campaign set ambitious yet achievable goals, aiming to end Vermont's childcare crisis by 2025. 

Business Leadership: A Critical Component 

One of the most striking aspects of Vermont's childcare reform is the pivotal role played by the business community. "We would not be where we are today in Vermont, without the business leadership. They weren't just engaged, they were actually leading,” Richards says. 

Leaders of businesses in Vermont recognized child care as a key solution to the state's workforce crisis and demographic challenges. They became powerful advocates for the cause, investing in childcare initiatives and programs. Businesses realized that investing in childcare would result in a strong return on investment, providing a big reason for their involvement and emphasis on the issue. 

Lessons for Other States 

While Vermont's small size contributed to its success, Richards believes there are transferable lessons for other states: 

• Set clear goals with deadlines to maintain focus and accountability. 

• Engage in grassroots mobilization to build broad community support. 

• Don't shy away from politics—use election cycles to elevate childcare as a critical issue. 

• Ensure business leaders are at the forefront of advocacy efforts. 

As Vermont continues to implement its child care reform, other states will be watching closely. The success of this campaign could provide a roadmap for addressing the childcare crisis nationwide, potentially significantly altering childcare and workforce development across America.